"The War of the Triple Alliance and banking activity in Rio de Janeiro, 1865-1870: the cases of Banco do Brasil, Banco Rural e Hipotecario do Rio de Janeiro, Banco Comercial do Rio de Janeiro, London and Brazilian Bank and English Bank of Rio de Janeiro"

In September 1864, a commercial and banking crisis broke out in Rio de Janeiro, culminating in the bankruptcy of the Antonio José Alves do Souto & Cia banking house, one of the most important of the period. In December of the same year, the War of the Triple Alliance broke out, and the increasing expenditures on the war accentuated the period of crisis in Rio de Janeiro's Trade Square (“Praça do Comércio do Rio de Janeiro”). Due to the increase in war spending, the Brazilian government abandoned its orthodox economic policy, mainly monetary. Through the increase in emissions via the National Treasury, which replaced Banco do Brasil as an issuing agent of banknotes in 1866, the depreciation of the currency with the abandonment of the gold standard and the increase in foreign and domestic loans, the latter with the increase in government bond issues, the government responded to the crisis by expanding the currency and generating inflation.
Given this macroeconomic and political situation, what was the behavior of the banking system in the city of Rio de Janeiro? What were the strategies developed by national and foreign banks in the main Brazilian trade square? In order to answer these questions, we analyzed the actions and strategies developed by the national banks, such as Banco do Brasil, Banco Rural e Mortgage do Rio de Janeiro, the second Commercial Bank of Rio de Janeiro, and the foreign banks London and Brazilian Bank and English Bank of Rio de Janeiro.