Abstract: Property Rights, Kinship Groups, and Business Partnership in Nineteenth- and Twentieth-Century Brazil: The Case of the St. John d'el Rey Mining Company, 1834-1960
The case of the British St. John d'el Rey Mining Company in Brazil during the nineteenth and twentieth centuries illustrates the dynamics of kinship groups, firm structure, and property rights. Mining's capital-intensity, high-risk, and long-term time horizon make it ideal for exploring the conjunction of property rights and business structure. Nineteenth and twentieth century challenges to St. John d'el Rey's land transactions demonstrate the legal and economic factors impeding the evolution of business structure. Contrary to previous research, property rights were over-specified rather than under-specified and provisions for rights were mutually inconsistent. Very precise colonial era laws protected fixed capital investment, making dissolving partnerships legally problematic. Inheritance laws mandated partition of personal estates among heirs. Heirs of sellers from whom the company bought land posthumously claimed both land and a share of the company's revenues (essentially partnership rights). Although the St. John d'el Rey Mining Company survived until the second half of the twentieth century, its experience demonstrates the disadvantages for businesses trying to rely on partnerships extending beyond small networks united by kinship bonds.