Suplemento Burlesco 1468 V
Part V – The crisis

At the Banco de Lisboa’s General Meeting sessions held in 1826 and 1827, the main shareholders made clear their concerns about the government’s pressure to issue a new loan and to make advance payments through the Bank to various branches of public administration. The liquidity problems caused by the demand for metal currency to be exchanged for an increasing amount of discounted paper money were also evident, while it was found that the latter’s process of extinction and progressive substitution by banknotes was far from achieving the desired outcome.

Burlesque Supplement in the newspaper "O Patriota" nº1468
The Historical Archive of Banco de Portugal
The crisis of 1827

The excess of requests from the public for the conversion of paper money and banknotes led, at the end of 1827, to the Board of the Banco de Lisboa suspending this conversion. This put the Banco de Lisboa at odds with the Government, which orders the conversion to be reinstated.

Letter from the Bank to the Minister of Finance participating in the suspension of payment of banknotes and paper money

On 6 December 1827, the Board of the Banco de Lisboa communicated to the Minister of Finance that, given the lack of silver coin to respond to requests for exchange for banknotes and paper money, it would suspend this conversion the following day, calling the Government's attention to the fact that this could "produce a great sensation in the public, and perhaps riots, which must be prevented".


Book 2 of "Official Paper Register", 1824-1828
Historical Archive of Banco de Portugal
Bank notes issuance and amortization terms
Book 1 of "Bank notes issuance and amortization terms", 1824-1828
Historical Archive of Banco de Portugal

Following the crisis of 1827, the Banco de Lisboa’s activity went through a phase of contraction that lasted until the years of the 1832-34 Civil War. In the aftermath of this turbulent period of Portuguese political life, the Banco de Lisboa regained its role as lender to the State, shared the role of bank of issue with the Banco Comercial do Porto (established in 1835), set up a new programme for the extinction of paper money, benefited from the climate of political stability of the Costa Cabral governments of the early 1840s, and sponsored the setting up of financial companies also intended to provide funds for the operation of state services and public finance consolidation.

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Part VI

The renewal

A new crisis in 1846 on the eve of and amid new political turmoil (the Patuleia Civil War) eventually determined the expected institutional outcome of reconfiguring banking and financial institutions that would lead to the merger of the Banco de Lisboa with Companhia Confiança Nacional and the genesis of the Banco de Portugal.