The Public Good and the Brazilian State: Municipal Finance and Public Services in São Paulo, 1822–1930 9780226535104

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The Public Good and the Brazilian State

Markets and Governments in Economic History a series edited by price fishback

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The Public Good and the Brazilian State Municipal Finance and Public Services in São Paulo, 1822– 1930

a n n e g. h a n l e y

the university of chicago press

chicago and london

The University of Chicago Press, Chicago 60637 The University of Chicago Press, Ltd., London © 2018 by The University of Chicago All rights reserved. No part of this book may be used or reproduced in any manner whatsoever without written permission, except in the case of brief quotations in critical articles and reviews. For more information, contact the University of Chicago Press, 1427 E. 60th St., Chicago, IL 60637. Published 2018 Printed in the United States of America 27 26 25 24 23 22 21 20 19 18

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isbn-13: 978-0-226-53507-4 (cloth) isbn-13: 978-0-226-53510-4 (e-book) doi: https://doi.org /10.7208 /chicago /9780226535104.001.0001 Library of Congress Cataloging-in-Publication Data Names: Hanley, Anne G., author. Title: The public good and the Brazilian state : municipal finance and public services in São Paulo, 1822–1930 / Anne G. Hanley. Other titles: Markets and governments in economic history. Description: Chicago ; London : The University of Chicago Press, 2018. | Series: Markets and governments in economic history Identifiers: LCCN 2017033941 | ISBN 9780226535074 (cloth : alk. paper) | ISBN 9780226535104 (e-book) Subjects: LCSH: Infrastructure (Economics)—Brazil. | Finance, Public—Brazil. | Public administration—Brazil. | Municipal government—Brazil. Classification: LCC HC190.C3 H355 2018 | DDC 336.81/6109034—dc23 LC record available at https:// lccn.loc.gov/2017033941 ♾ This paper meets the requirements of ansi/niso z39.48-1992 (Permanence of Paper).

for joe

Contents List of Illustrations

ix

Preface and Acknowledgments Explanatory Notes

xi

xvii

chapter 1.

Introduction: Public Finance and the Origins of Inequality 1

chapter 2.

The Municipal Ideal

chapter 3.

The Fiscal State

chapter 4.

Nickels and Dimes: Funding Municipal Projects

chapter 5.

Bricks and Mortar: Building Essential Infrastructure

chapter 6.

Pests and Pestilence: Paying for Public Health 165

chapter 7.

Order and Progress: Investing in Education, Beautification, and Leisure 192

chapter 8.

Conclusion: The Local Economy and the Vibrant Municipality 210

Data Appendix Abbreviations Notes

64 98 133

225 231

233

Bibliography Index

26

267

283

Appendix with further source material: press.uchicago.edu /sites /hanley

Illustrations Map 1.1

The municipalities in São Paulo, Brazil

20

Figures 2.1 5.1 8.1 8.2

Urban population as percentage of municipal population, 1934 Inflation rates, 1870– 1930 158 Total spending per capita 215 Average per capita spending by category, 1899– 1901 217

41

Tables 2.1 2.2 2.3 2.4 3.1 3.2

Comparative structure of municipal codes in the empire 35 Changes in the structure of municipal codes 36 Municipal population, 1836– 1934 40 Comparative structure of municipal codes in the republic 57 Ordinary revenues of the Brazilian government 70 Selected ordinary revenues of São Paulo provincial government 72 3.3 Sources of municipal revenue in the empire 75 3.4 Common tax categories across most municipalities 78 3.5 Major sources of municipal taxes, fees, and licenses, ca. 1865, 1875, and 1885 79 3.6 Selected municipal licenses and fees, 1894– 1928 86

x

3.7 3.8 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 5.1 5.2 5.3 6.1 6.2 7.1 7.2 8.1 8.2 8.3 8.4

illustrations

All sources of municipal revenue, 1894– 1928 89 Revenues per capita from taxes, fees, and licenses, 1835– 1928 94 Major categories of expenditures in the empire, 1835– 89 105 Incidence of surplus and deficit in municipal finances, 1835– 89 107 Sample of subvention requests to the provincial legislative assembly 109 São Paulo provincial subventions to municipalities 119 Municipal loans authorized by the São Paulo provincial legislative assembly 121 Loan authorizations, 1881– 89 123 Municipal population and growth rates, 1886– 1928 125 Loans as percentage of municipal revenues, 1894– 1928 127 Debt service as percentage of three-year average revenues 129 Public works spending per capita, 1835– 1928 135 Municipal spending by category, 1894– 1928 144 Municipal public works spending as percentage of total municipal spending, 1894– 1928 147 Municipal public health spending as percentage of total municipal spending, 1894– 1928 174 Public health spending per capita, 1835– 1928 184 Public education spending as percentage of total municipal spending, 1894– 1928 202 Public education spending per capita, 1894– 1928 203 Municipal revenues per capita 214 Human development investment per capita 216 Changes in property values, total spending, and human development spending, 1900– 1920 219 Changes in property values, total spending, and human development spending, 1900– 1928 221

Preface and Acknowledgments

T

his book began with a conversation during a coffee break at a conference of economic historians in Araraquara, São Paulo. My colleague Gail Triner asked what I was working on, and I described my new project about the history of entrepreneurship. In passing, however, I added that I recently came across “this great document that tells what a bond issue paid for in Campinas, so I’m also thinking about something to do with municipal finance.” She replied, “Study that!” Her reaction got me reading and thinking, and then exploring archives and creating a pilot project. The pilot project led to a year of archival research in seven Brazilian municipalities that unlocked a rich history of public finance, local governance, and the unfolding of the domestic economy in a part of the world better known for its export boom. The Public Good and the Brazilian State is the result. It draws on my long-standing interests in development economics, finance, and Brazilian history, and my abiding love for the nineteenth century. This book is a history of municipal finance that explores how the legal institutions and fiscal structure of the Brazilian state shaped the provision of public goods at the municipal level. The municipality was charged with the responsibility for providing goods like infrastructure, order, health, and education to enhance citizens’ quality of life and standards of living, yet was given insufficient revenue streams to fulfill that responsibility. The pages that follow examine why that was so, how it affected public investment in these goods, and what choices municipal administrators made as a result. Because Brazil’s municipalities derived their revenue from the circulation of local goods, services, and people, this exploration of municipal finance offers an up-close look at the domestic economy in a region more often studied for its export economy. It asks whether the extraordinary

preface and acknowledgments

xii

wealth of the coffee boom translated into high levels of investment in the public good. The answer for most of the municipalities turns out to be no. The state’s reliance on the local economy for the municipal revenues to pay for goods promoting human development meant that the experiences of these arrangements differed from municipality to municipality and across time. The seven municipalities studied in this book were sites of the greatest wealth creation in late nineteenth-century Brazil, and were certainly better off than municipalities outside this region, but their revenues varied greatly and affected their individual capacity to invest. The fiscal structure of the Brazilian state that established this allocation of revenue in the early years of the Brazilian empire (1822– 89) brought hardwired longterm inequality into Brazilian socioeconomic development. This book is not a typical economic history with testable hypotheses and counterfactual analysis. My intent was to write about how municipal economies, finances, public services, and administration fit into in Brazil’s history of inequality. This was a labor of love, as it necessitated teasing data out of illegible manuscripts housed in modest archives in municipalities scattered through the Paulista West. The data series vary in completeness and in the treatments they required to bring them to useful life. Hence the data appendix offers an explanation of their characteristics, their gaps, and the ways I elected to compensate for missing data. I hope economic and institutional historians will regard this book as a starting point for creating those hypotheses and developing those counterfactuals that will extend and deepen our understanding of the connection of municipal finance to the history of inequality and underdevelopment. *** I owe debts of gratitude for financial, institutional, intellectual, and emotional support and hospitality over the years of research and writing this book entailed. The research was made possible through a generous grant from the Fulbright-Hays Faculty Research Abroad Program of the Department of Education, Award Number P019A060018, which supported my fieldwork. Internal grants from Northern Illinois University’s summer Research and Artistry program supported my exploratory research in the Library of Congress, and the initial pilot project at the Universidade Estadual de Campinas before my year abroad. My sabbatical from NIU’s College of Liberal Arts and Sciences helped me write the book that resulted.

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xiii

I appreciate the dedicated work of the staffs of municipal archives throughout São Paulo who achieve a level of professionalism and expertise in preserving the historical record despite working in sometimes precarious, if really cool, physical spaces. My warm thanks go to Tânia Cristina Registro and the staff of the Arquivo Público e Histórico de Ribeirão Preto, my archival base during my year in Brazil. Housed in a former private home while awaiting a new state-of-the-art facility, this archive stored newspapers in the dining room, held manuscript collections in the study, kept koi in what had been a swimming pool, and usually had a litter of kittens in the kitchen. It was the historian’s dream home. In Franca, I spent many weeks in the welcoming and supportive environment of its two archives, the Arquivo Histórico Municipal “Capitão Hipólito Antônio Pinheiro,” housed in a former school built around two beautiful interior patios, and the Museu Histórico de Franca “José Chiachiri,” which in a former life had served as the municipality’s headquarters and jail. In Campinas, I benefited from the knowledgeable guidance of historian and archivist Maria Joana Tonon at the Arquivo Municipal de Campinas, and the staffs of the Arquivo Edgard Leuenroth and the Centro de Memória at the Universidade Estadual de Campinas. My appreciation goes to the archival personnel at the Arquivo Municipal de Amparo and the Arquivo Público Histórico “Prof. Rodolpho Telarolli” in Araraquara. The library of the Câmara Municipal de Ribeirão Preto gave me access to manuscript collections, which I consulted under the watchful eye of two public functionaries. The Arquivo Público e Histórico do Município de Rio Claro yielded documentation of its region’s governance. The Arquivo Histórico de São Carlos/ Fundação Pró-Memória de São Carlos, located in a nineteenth-century railway station, might possess the coolest reading room of all. In the city of São Paulo, this research would not have been possible without the excellent manuscript and print collections of the Arquivo da Assembléia Legislativa do Estado de São Paulo and the Arquivo Público do Estado de São Paulo. Both institutions have invested in stateof-the art preservation and presentation of the unique documentation of São Paulo’s history. I benefited from a generous community of scholars in Brazil who welcomed me, gave me an institutional home, introduced me to archivists and research assistants, helped me navigate the cities of the São Paulo hinterland, and made me part of their turma. My thanks to Rudinei Toneto Jr. and the Economics Department of the Universidade de São Paulo– Ribeirão Preto for sponsoring my stay, especially Renato Leite Marcondes, Maria

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preface and acknowledgments

Lúcia Lamounier, and Sérgio Naruhiko Sakurai. I hired three excellent research assistants from among their economics undergraduates: Eduardo Rodrigues do Nascimento, Carlos Eduardo de Oliveira Silva, and Aretha Zarlenga. Thank you to Maria Alice Rosa Ribeiro and the faculty of the Economics and Social Sciences Departments of the Universidade Estadual de São Paulo– Araraquara for introducing me to their enthusiastic undergraduates, many of whom conducted archival research on my behalf. They are Leonardo Nunes da Silva Cano, Sandro Gonçalves, Larissa Manoeli, Veronica Martovane, Paulo Cesar Morceiro, Diogo Robledo, Anderson Souza, and Milene Tessarin. Additional research assistance came from graduate and undergraduate students in economics at the Universidade Estadual de Campinas: Bruno Aidar Costa, Marília Bassetti Marcato, and Andréa Bertelli Peres. Monica Cristina Brunini Frandi Ferreira, a graduate student in architecture at the Escola de Engenharia da Universidade de São Paulo– São Carlos, rounded out the cohort of RAs. I thank them all for their careful, conscientious work and the geographical coverage they provided for this widely cast research net. My time in Ribeirão Preto was made infinitely richer by the friendship of the Pacini Costa and Silva family, especially Márcia and Luiz Henrique, Henrique and Felipe, and my dear Cidinhha. My gratitude always for the warm friendship of Marcos and Paula, Renato and Tatiane, Luciana and Lincon, Tereza and Marcelo, and the extended Lima Gonçalves clan. My research was honed through an abundance of presentations; over the years, valuable feedback and commentary from many groups and individuals helped me refine, deepen, and extend my understanding of the concepts I was grappling with. I appreciate the opportunities provided to me by the economic history workshop at Northwestern University, the Newberry Seminar on Latin American History, the “Economics and Biodemography of Aging and Health Workshop” at the Center for Population Economics of the University of Chicago, the economic history seminar at Ruters University, the Hermes & Clio economic history workshop at the Universidade de São Paulo, and the Economics Department at the Universidade de São Paulo– Ribeirão Preto. Presentations at annual meetings of the Brazilian Studies Association, the Latin American Studies Association, the American Historical Association, the Social Science History Conference, and the Illinois Economics Association generated critiques and suggestions that shaped this book. I especially benefited from the thoughts and observations of Diego Armus, Edward Beatty, Louis Cain, Oliver Dinius, Marshall Eakin, Joseph Ferrie, Richard Graham, Juliette

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xv

Levy, Luciana Suarez Lopes, Moramay López Alonso, Joseph Love, Renato Leite Marcondes, Graciela Márquez, Joel Mokyr, Chiaki Moriguchi, José Flávio Motta, Nelson Hideiki Nozoe, Ian Read, Maria Alice Rosa Ribeiro, Alexandre Macchione Saes, Gail Triner, Mary Yeager, and the anonymous reviewers for the University of Chicago Press. A preliminary version of chapter 4 appeared as “A Failure to Deliver: Municipal Poverty and the Provision of Public Services in Imperial São Paulo, Brazil 1822– 1889” in the Journal of Urban History 39, no. 3 (May 2013): 513– 35. I have been fortunate to enjoy a supportive academic environment created by the chairs of the Department of History at NIU. Thanks go to Kenton Clymer, Beatrix Hoffman, and James Schmidt. My friend and colleague Christine Worobec generously took over my administrative duties as director of graduate studies so that I could move to Brazil to pursue the field research. Christine and her husband, the late David Kyvig, joined the NIU faculty the same year I did, and have been dear, steadfast, and supportive friends ever since. Thanks to my colleagues in the History Department for reading and commenting on preliminary versions of these chapters delivered at our brown-bag gatherings, and for our many heartening discussions about research, teaching, and the importance of the humanities and social sciences to an educated, informed, and engaged citizenry. Thanks to the graduate students in the City in History reading seminar, especially Matthew Maletz and Michael Ribant, for their comments and critiques on early drafts of chapter 4. Thank you to Clint Cargile for his excellent editorial work. I also extend my appreciation to Price Fishback and the editors at the University of Chicago Press for shepherding this book from draft, through revisions, to final publication. I am profoundly grateful for the support of my family. My children, Philip and Ellen, the joys of my life, considered our life in Ribeirão Preto as a big adventure. As adolescents, they were thrown into the deep end of a foreign language and culture and absorbed and embraced it all. As adults, they contributed to this book by reading and commenting on sections and by providing research support. Their Portuguese language skills came in very handy. My deepest debt and greatest appreciation go to my husband of thirty years and best friend, Joe, who has supported me and my research in every possible way, including helping me through this very labor-intensive project and reading the final manuscript from start to finish. It is to him that I dedicate this book.

Explanatory Notes

T

he rules regarding written Portuguese have undergone several changes across the nineteenth and twentieth centuries. Standards for spelling were flexible then as well, resulting in variations on the spelling of names or of commonly used terms. I have adopted modern spellings for most words except where they appear in formal titles of printed works or in quotations. *** The Brazilian currency was the milréis, or one thousand réis, written as 1$000. It ranged in value between US$.50 and US$.20 for much of the period, but inflation of the 1920s and the global economic shock of the Great Depression reduced its value to about US$.08 by 1934. All references to Brazilian currency in this book are in milréis. Some of the investments made in public goods, such as health, were smaller than one milréis, so I adopted the format 1.000 rather than 1$000 to remedy the problem of a reader unfamiliar with the currency getting the wrong idea. He or she might read the very tiny value of $300, mere pennies in US currency, as US$300. Therefore, the use of three decimal places is adopted throughout the tables in order to mimic the historical format of the milréis. *** All translations are mine unless otherwise noted.

chapter one

Introduction Public Finance and the Origins of Inequality The Municipality, whether the unyielding ideologues of centralizing regimes like it or not, is the cellular material of nationality; it is the true propelling force of moral and material greatness of the politically organized nations in the democratic regime.1

T

his is where Brazilian life unfolded: in the municipality. Municipal life was where governing was the most personal, where institutions shaped the daily life of every citizen. What time was a shopkeeper allowed to open up business for the day? Who was responsible for keeping streets clean? Could citizens raise livestock in their own backyard? How was dirty water and trash disposed of in the days before piped sewage and regular garbage collection? Most important, who paid? Did they pay enough to keep cities orderly, clean, safe, and free from illness? Were their taxes, licenses, fees, and fines sufficient to keep the roads open and the bridges repaired for commerce? Was this revenue enough to provide children with a proper education? To paraphrase George Bailey in his famous confrontation with Mr. Potter in Frank Capra’s It’s a Wonderful Life, the municipality was where ordinary Brazilians did most of their working and paying and living and dying. This book is an economic history of the municipality in Brazil during the first century of that nation’s independence from Portugal. The Brazilian municipality is akin to an American county in that it contains urban settlements and their rural surroundings.2 In the pages that follow, I examine the financial life of the municipality and explain how the local state organized and prioritized the provision of public services, who its stewards determined should pay for these services, and what happened when revenue failed to satisfy local needs. I also look at the debates, de-

chapter one

2

cisions, and outcomes to provide an understanding of the evolution of public finance and the provision of public services, as well as their effects on the early economic development of Brazilian society. The questions of who pays and who benefits are central to our understanding of the origins of inequality. The answers to these questions are found in the contract established between state and citizen via the state’s fiscal policies, which set the rules for contribution and establish the patterns of disbursement. As Joseph Schumpeter wrote in 1918, “public finances are one of the best starting points for an investigation of society,” because the structure of a state’s finances reveals the history of its economic development, its social values, and its cultural biases. The notion of who should shoulder the fiscal burden and who should benefit from state spending, he asserted, was a powerful lens for viewing political, social, and cultural priorities in the relationship between state and citizen.3 On one level, this history can be read as an analysis of how a new nation structured its public finances. At a deeper level, however, it contributes to our understanding of Brazilian social and economic development, a flawed process that by the end of the twentieth century had produced one of the highest income inequalities in the modern world.4 In this book, I argue that Brazil’s inequality has structural roots in public finance. The financial structure adopted at independence relied on regressive indirect taxes that fell most heavily on those with the least. More important, it gave the municipality the greatest responsibility for public well-being, yet endowed it with the fewest monetary resources for fulfilling that responsibility. This set up a century of tension between the public’s need for and the state’s ability to invest in the public good, ensuring that at the first point of contact between state and citizen, the citizen would find the state wanting. *** Public finance is crucial to social and economic development, because public revenue pays for the services that support and enhance the quality of life and standard of living of a community’s citizens. Next to direct sources of family income, the greatest determinants of welfare in modern societies include physical infrastructure, public safety, clean water and functioning sewer systems, public health care, hygiene, and education. Inadequate or unevenly distributed public services in twentieth-century Brazil promoted what sociologist Sam Adamo termed the “cycle of cu-

introduction

3

mulative disadvantage,” whereby poverty, malnutrition, disease, and illiteracy broadened the gap between rich and poor across generations.5 Recent research by economic historians on the relationship between investment in one public good— education— and inequality appears to confirm Adamo’s findings: municipalities that invested in schooling in the early 1900s were better off in the early 2000s. The long-run benefits, however, required economic and political elites to agree to invest broadly in the good— that is, invest beyond what elites would themselves consume, which research by others shows they were loath to do.6 The study of municipal public finance and the services it paid for deepens our understanding of the investment decisions made in Brazil’s first century of independence that had lasting effects on its economic development and inequality. Public finance is key to social and economic development, economists and economic historians argue, because its structure and implementation have important consequences for creating public and private incentives to provide public goods and services. Public goods and services are those provided for the benefit or well-being of all members of society, often by a government but sometimes by private parties on behalf of governments.7 Principal among the concerns of this literature are two essential questions: how much investment in public services is enough, and who should pay? For example, it is essential to determine the correct allocation of responsibilities among levels of government (national, state, local), type of provider (public, private), types of financier (government, private sector, taxpayer), and types of consumer (firm, agency, citizen). For one thing, public investment in public goods and services may promote economic development and quality outcomes for standards of living, but it may also discourage private investment and needlessly overburden a public financial system’s capacity to generate needed revenue. Another challenge lies in determining the optimal level of investment in certain types of public goods, in terms of both which level of government should pay and which volume of investment is sufficient, potentially creating conditions of overor underinvestment. Investment in public goods and services by a centralized government, for example, will likely be less sensitive to preferences of different communities than when investments are made in a decentralized system. And while economic theory suggests that local provision of public goods and services can better reflect the balance between a community’s desired level of services and its willingness to pay for them, reliance on local taxes to pay for locally consumed public services can perpetuate structural inequalities between communities. Subsidies and credits de-

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chapter one

signed to remedy such imbalances may create unintended incentives and lucrative but not developmental investment. Finally, recourse to borrowing on the capital markets can alleviate shortfalls in municipal revenue, but such borrowing can create crippling debt burdens on local governments and require bailouts by the federal government. Federal bailouts, in turn, can give incentive to opportunistic borrowing at the municipal level. These are but a few of the complexities raised by scholars.8 The messiness of getting public finance right has been the subject of much heated debate in modern-day Brazil. Some of the debate concerns the proper incentives to promote needed investment. The nation’s development bank, Banco Nacional de Desenvolvimento Econômico e Social or BNDES, is more known today for its massive transfers of public funds to subsidize private businesses than it is for the development projects that informed its creation in 1952 and the policies we typically associate with such institutions, such as remedying a regional imbalance in development of infrastructure or resolving a case of market failure. In its recent policy of “picking winners,” the bank has instead financed businesses that, according to analysts, were likely candidates for attractive financial terms from private-sector lenders.9 Another area of contention in Brazil today is over the need to reform its pension system, which weighs heavily on the federal budget, crowds out spending on public goods, and, some argue, exacerbates inequality. The crisis first arose over the scandalous retirement pensions of government workers, the so-called marajás of the late 1980s and 1990s. These were parasitical public servants who earned high salaries, contributed little to the welfare of their constituencies, and received the constitutionally guaranteed right to retire at 100% of their exit salary after minimal time in their position. Strictly speaking, marajás were the high-profile parasites, but the policies that lined their own pockets also bloated public pensions through egregious loopholes: After retiring from one public-sector position, many individuals sought another that ensured them a second full pension. This loophole was closed by the late 1990s, but the burden of public-sector pensions weighs heavily against public finance at every level of the government. In the private-sector pension system, evading the contribution tax is widespread, leading to a small number of contributors funding the pensions enjoyed by the retirees and their beneficiaries. Moreover, compared with their counterparts in other Latin American countries, Brazilians retire early and enjoy generous survivor and dependent benefits, increasing the burden on contributors that in turn fuels tax evasion. Most

introduction

5

Brazilians draw a single pension that is not enough to support them, but many accumulate multiple lucrative pensions that extend income inequality from the working years into retirement. Some reform of these problems can be accomplished via administrative changes, but overhaul of the pension system requires a constitutional amendment, a major impediment to change. A testament to the severity and duration of the problem is its repeated appearance, year after year, in mainstream journals with such alarmist titles as “Tick, Tock.”10 A third point has to do with the fiscal relationship between the three levels of government, national, state, and local. Brazil’s 1988 constitution was dedicated to the idea of fiscal decentralization to enhance the autonomy of subnational governments after decades of highly centralized governance dating back to the era of president Getúlio Vargas in the 1930s. To this end, it created block grants from the federal government to municipalities as part of a package of resources meant to address regional distributional inequalities and allow local governments to determine the best use of the funding. Not surprisingly, the number of municipalities multiplied. But the 1988 constitution also introduced a problem that defined the 1990s and created crisis conditions for Brazilian public finance. In the return to democracy and the attempt to rectify the antidemocratic legacy of the recent past, the national government was politically unable or unwilling to impose fiscal discipline on the newly empowered subnational governments. The 1988 constitutional commitment to the autonomy of the local and state governments quickly became coupled with excessive borrowing and spending, with the national government repeatedly bailing them out. The central government’s lack of a credible commitment to allow those subnational governments to fail when their spending and borrowing exceeded their revenue created an implicit promise to bail them out, which in turn spurred more fiscal indiscipline and more bailouts. The cost of this failure to hold states and municipalities accountable for their fiscal health contributed to a series of reforms intended to rein in the indiscipline, but unstable conditions in public finance dominate the news cycles to this day.11 The deficits that plague Brazilian public finance have resulted in serious clashes in the streets and in the halls of government. For decades, the pattern of state and municipal bailouts by the central government in times of debt crisis created an incentive structure that encouraged subnational units to rack up debt, ultimately burdening the federal government. In recent years, citizens took to the streets in massive demonstrations against

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chapter one

the use of public funds to build stadiums and infrastructure for the 2014 World Cup. And just weeks before Rio de Janeiro was to host the 2016 Olympic Games, police officers greeted arriving tourists with huge banners saying Welcome to Hell, informing them that public-sector employees had gone unpaid for months.12 Both of these athletic events, which were meant to showcase Brazil’s ascension to First World status, siphoned staggering sums of money away from addressing its citizens’ critical needs for public health and physical infrastructure and transportation during a deep and enduring recession. An alleged accounting sleight of hand to cover up the magnitude of deficits incurred by the government of president Dilma Rousseff led to the charge of a “crime of responsibility” that resulted in a vote to impeach her. This vote was conducted by a congress replete with legislators under investigation for their liberal interpretations of the proper use of fiscal resources. Brazil’s inability to resolve the serious structural problems in its public finances has very nearly brought down its fragile democracy.13 The crises of modern public finance are so great, in fact, that it is surprising to recall that the notion of the government’s role in providing services to its citizens is a relatively recent phenomenon. For most of human history, services that were communally shared and consumed, such as they existed, were paid for by local notables or private charitable organizations. Taxation by the state was almost entirely related to maintaining internal order and protecting external boundaries. Before the nineteenth century, the role of government in the everyday lives of citizens in most parts of the world was fairly limited, especially at the local level. Public revenue was generated primarily through indirect taxes to pay for war abroad and to maintain peace at home. The types of public services we receive from government in the modern day were largely absent from daily life.14 Beginning in the nineteenth century, the responsibility for providing public goods was increasingly viewed as the responsibility of the state. As governments consolidated central authority and secured the ability to assess and collect taxes, they developed the resources to expand public services beyond national security and domestic law and order. The rise of the fiscal state allowed governments to conceive of a more involved role in the lives of their citizenry by investing in social overhead capital to promote well-being and enhance economic growth. Public health and education became essential to the agenda of the liberal state, but so did infrastructural development. Over time and across nations, roads, bridges,

introduction

7

schools, public health clinics, low-income housing, food assistance programs, scholarly research, and the arts all became supported to some degree by taxes.15 The rise of the fiscal state and expanded public services in individual national experiences was neither uniform nor inevitable, but it was an identifiable trend in Western nations across the nineteenth century, particularly in their quest to ameliorate the socioeconomic and environmental problems associated with industrialization and urbanization. By the twentieth century, there was little question that the state had a role to play in protecting and promoting the well-being of its citizenry.16 The debate turned from whether the government had a role to play to which level of government was responsible for public well-being. Did centralized regimes better serve their populace, or did decentralized regimes? The answer, according to economists, was decentralized regimes. Beginning with Charles Tiebout, the economist who argued that consumers (citizens) express their preferences for public goods by “voting with their feet,” scholars have argued that local provision of certain public goods and services was the most efficient use of public funds because local governments were most adept at discerning consumers’ preferences. Overinvestment in publicly provided public goods and services meant unnecessarily high levels of spending on goods and services, ones the consumers in that community did not value. To finance this high level of investment, taxes and/or debt burdens must be high as well, in essence asking residents to pay for something they are not likely to consume. Underinvestment in publicly provided public goods meant a lighter tax burden, but the lower investment in goods like roads, parks, schools, and so forth caused property values in the community to suffer. Because no two individuals have the same preference for the appropriate level or distribution of provision of public goods, the tax or debt burdens associated with them, or the impact the level of investment has on property values, they will move to the community matching their preference or tolerance. Universal provision of public goods and services by a centralized government is therefore less efficient than decentralized provision. Scholars argue for the greater efficiency of fiscal federalism, a decentralized structure of public finance that retains responsibility for some goods like military security at the national level while deploying the responsibility for most public goods to state or local levels, where they can be tailored to local preferences.17 This decentralized system of fiscal federalism that placed provision of public services at the local level is the one the Brazilian nation adopted

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at independence and maintained until 1930. In this book, I argue that this decentralization may be efficient in theory, but the promise of fiscal federalism is contingent on the resource base of the community. In the experience of the Brazilian municipality during the first century of independence, insufficient resources severely constrained the ability of the local state to invest in the public services that improved the quality of life and standards of living of ordinary Brazilians. If we follow Schumpeter’s argument about the structure of state finances revealing the preferences, values, and biases of the state, then the history of Brazilian municipal finance can only be read as a history of neglect that had lasting consequences for economic development and inequality. *** Brazil’s municipal history, like the rise of the fiscal state, was largely a product of the global expansion of the nineteenth century. During colonial times, from the voyages of discovery by Portugal in 1500 to its independence in 1822, Brazil was an agricultural and extractive colony built up through the extensive use of African slave labor to produce sugar, gold, diamonds, tobacco, and cane alcohol for the Portuguese Empire.18 For centuries, Brazil’s mandate was to produce wealth for the crown and European settlers, and to refrain from any economic endeavors competing with the entrepreneurial activities of Portugal or its allies like Great Britain. Settlers were concentrated, then, in the areas that produced the greatest wealth. Sugar production located in the Northeast dominated the colonial economy and, consequently, colonial settlement patterns for two hundred years. Most of Brazil’s better-developed urban settlements were located in this region, the location of the modern-day states of Pernambuco and Bahia. But the discovery in 1697 of gold and diamonds in the modern-day state of Minas Gerais pulled population from underperforming areas to this new frontier. Slumping sugar prices due to competition from Caribbean colonies caused Northeastern planters to sell slaves to the miners; Southeastern colonials who settled on the temperate plateau of São Paulo and south to Rio Grande do Sul found new economic vigor in supplying cattle, food, and other supplies to the mines to their north. The gold and diamond rush of the eighteenth century shifted the focus of the crown southward and moved the colonial capital from Salvador da Bahia to Rio de Janeiro in 1763, while small interior towns became way stations for Portuguese authorities to attempt to capture the royal fifth,

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the 20% tax owed to the royal treasury, which had a tendency to leak out of the mining camps without being collected. Religious settlements that had sought to protect native populations from slave traders found themselves likewise drawn into the expanded geographic economy of the eighteenth century, particularly in areas that produced lumber, food, and other supporting goods for the new mining regions.19 Some of the mandated responsibilities studied in this book drew on colonial precedents, but these responsibilities had been de jure rather than de facto before the nineteenth century. Portugal’s legal codes, the Manueline (1512) and Philippine (1603) Ordinances, established expectations for municipal life for all Portugal’s colonial possessions, particularly the towns’ location, layout, and appearance and the town councilors’ responsibility for maintaining law and order. These were largely ignored outside the major colonial capitals, however. Brazil, discovered in 1500 by a Portuguese spice-trading expedition to India via Africa’s Cape of Good Hope, was but one possession in a global Portuguese overseas empire that relied more on compliance with the ordinances than their direct enforcement. Brazil was a huge colony that extended north above the equator down to the southern reaches of modern-day Rio de la Plata. The crown used the offer of vast tracts of land to encourage colonization in the hopes of extracting value from the New World, but much of the colony failed to generate economic returns for the crown, at least in the first two hundred years of its history.20 Only the Brazilian Nordeste, or Northeast, produced wealth for Portugal through its extensive sugar plantations worked by the largest African slave labor force of the Americas. This wealth gilded the colonial capital city of Salvador in gold leaf, financed elaborate local religious and military festivities, and supported the royal representatives in Portugal’s most important colony. For most of Brazil’s settlements, however, distance, poverty, and isolation from the Atlantic trade meant that they lived in a modest regime of self-sufficiency with limited local governance. Municipal councils operated as a simple administrative apparatus tasked primarily with maintaining the peace and occasionally raising revenue to subsidize the crown or to pay for feast days.21 Extreme poverty often stripped municipalities of the means to provide public services that improve the quality of life. Councils had very little revenue beyond fines for ordinance infractions, a revenue source that had the characteristics of unpredictability and variability. According to Edmundo Zenha’s study of the colonial municipality, this revenue base was wanting: “Our colonial municipal councils . . . were always extremely poor,

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having been so across the entire history of the nation. The chroniclers are unanimous in testifying to the Franciscan poverty of the old councils. They did not have the forces to face anything that required spending their money.”22 So-called administrative projects such as repairs to existing roads and the construction of new roads or bridges— major public works projects that we today recognize as public goods— were realized through the system of the “common hand,” by which locals interested in the improvement contributed to its finance. Taxation was used only in the event of urgent needs or extraordinary expenses, and only with the approval of the local notables. The ebbs and flows of the colonial economy and the larger Atlantic World in which it operated meant that by the nineteenth century, Brazil’s settlement had extended beyond the Northeast. Bandeirante raids from the center-south region of São Paulo to capture Native American laborers, perversely termed “wards” since Indian slavery was illegal, produced a regional economy based on domestic foodstuffs, modest cash crops, livestock, and merchant activity. The discovery of gold and diamonds in neighboring Minas Gerais drew hundreds of thousands of settlers and slaves to its towns and stimulated a strong economic response from the regions to its south, which sent up food and tools to supply the mines.23 And by 1763 the gold boom caused Portuguese authorities to move Brazil’s ruling center to Rio de Janeiro. Rio was a beautiful if muddy backwater compared to Salvador, whether in terms of infrastructure or services. It was to Rio de Janeiro that the Portuguese royal court fled from Napoleon’s advancing forces in 1808. It was en route to Rio that prince regent Dom João threw open Brazil’s ports to international trade (1808), and it was from Rio that he elevated the colony to the status of co-kingdom (1815) so that he and his family could remain in Brazil after peace had been restored in Europe.24 And it was the presence of the royal court in Rio de Janeiro that inspired a flurry of municipal investment in public services to bring the capital up to the standards of a quasi-national capital, including investments in public infrastructure, public safety, health, and education. When the Portuguese parliament grew increasingly insistent that its monarch return in 1821 and moved to return the co-kingdom to its colonial status, the former prince regent, now King João VI, advised his son Pedro to consider declaring Brazil’s independence, an eventuality that came to pass in 1822. The framers of a newly independent Brazil enthusiastically embraced the concept of the state as provider of public services, if the founding

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documents are any guide. Brazil’s declaration of independence from Portugal provided the former colony with the opportunity to devise the appropriate role of the state in the life of the citizen and to define the fiscal structure to pay for that role. The new nation was the highly centralized Empire of Brazil, whose aspirations were laid out in four foundational documents— the 1824 constitution, the 1828 law that created municipal councils, the 1834 Additional Act, and the 1835 budget law. Through these documents, the state inserted itself into everyday life in diverse and detailed ways. It guaranteed the rights of the citizen (defined as gainfully employed white males over twenty-five years of age) and the promotion of his economic interests and personal safety.25 The general (national) and provincial (state) governments continued to perform the services of the ancien régime, safeguarding the nation’s security and maintaining internal peace, while exercising the newly acquired powers to regulate economic activity and promote regional and national integration through infrastructural investments. To the municipality went the primary responsibility for investments in social overhead capital and public services that most immediately affected individual well-being and standards of living. Therefore, researching public finance via case study at the level of the municipality reveals the political and economic decisions that shaped long-term social and economic development. Revenue policies established in municipal ordinances and through negotiation with provincial and state authorities determined who and what got taxed, carried a fee, or was subject to a fine. Spending priorities set by local administrators determined how those resources were distributed. The space between possibility and execution provides a window on the central but unstudied issue in Brazilian social and economic history: the degree to which the wealthy were willing to tax themselves to pay for broad-based development by investing in public services. The founding documents mandated extensive responsibilities to the municipality. They required the elected governing body, the câmara mu­ nicipal, or municipal council, to draft ordinances to govern street construction, alignment, cleaning, illumination, and repair; construct and maintain public prisons, sidewalks, bridges, fountains, aqueducts, water springs and reservoirs, and “any other constructions . . . for the decorum and ornament of the settlements”; establish cemeteries, drain wetlands, and otherwise attend to the hygiene and health of the settlement; protect the settlement from wandering crazy folk, drunks, and ferocious animals; maintain

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peace and quiet and protect against offenses to the public morale; establish public abattoirs and marketplaces to protect the food supply; calibrate weights and measures; protect travelers; and authorize public entertainment.26 The municipal council also had to promote economic development by acquiring models of the latest agricultural machinery, “new useful animals or the best of the existing races,” and seeds and cuttings of plants and fruit trees as if it were a sort of agricultural extension station. It had to establish charity houses for foundlings, provide health care to the poor, and vaccinate the children. The peace, security, and comfort of the town was its responsibility, and councilmen were encouraged to deliberate on the cleanliness, security, elegance, and style of the settlement as it expanded. Finally, the council was required to hire a cadre of employees to administer the town, including a secretary, a guard, and an inspector. Yet the provincial government could place anyone it saw fit in these positions, or fire them at will, ensuring its ability to meddle in local affairs.27 The responsibilities established in the 1824 constitution remained in place until 1930, even though Brazil experienced a major change in its political institutions. The highly centralized Empire of Brazil, ruled first by Emperor Pedro I and then by his son Pedro II, lasted until 1889. These sixty-plus years were a time of consolidating territorial control and central political authority, both tested by regional revolts and international wars; establishing the important legal codes (criminal, property, commercial); a tripling of population and a rise in the proportion of free Brazilians to enslaved; incipient urbanization; and changing philosophies about the racial, cultural, political, and economic aspects of modernization.28 Such changes introduced tensions in society and polity that were compounded by shifting economic fortunes brought on by the dramatic rise in the international demand for coffee. The empire’s end came as a coup in November 1889 when adherents of a new political party, called Republicans for their support of a decentralized political structure, secured the support of the army and forced Emperor Dom Pedro II to abdicate the throne and leave for Portugal. The Republican Party represented the economically ascendant but politically marginal coffee-growing states of the Southeast region. Whereas under the empire the politically powerful controlled national politics down to the level of ward boss, the new federative republic (1889– 1930) gave states autonomy over political and economic matters. The outcome of the coup was to realign political power with economic power. The reinstatement of political autonomy extended to the municipality. It no longer had to submit its finances to state review or request permis-

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sion to attend to local needs, but in all other ways retained its original responsibilities toward its citizens and, critically, relied on the same menu of revenue sources that had left it underfunded during the first regime. This municipal autonomy endured until 1930, when yet another political correction took place. This time, the backlash was against the reign of coffee interests. The republic had privileged support of the coffee economy at all costs, fashioning a pact known as café com leite, or coffee with cream, whereby the presidency rotated between political leaders from the coffee and the dairy states (São Paulo, Rio de Janeiro, and Minas Gerais). Major initiatives of the republic revolved around supporting the export economy (predominantly coffee) and the value of the Brazilian currency, the milréis. The State of São Paulo, which produced many of Brazil’s presidents during the nation’s time as a republic, borrowed extensively to support international coffee prices by buying coffee stocks and holding them off the market. This program introduced incentives for other countries to enter the market that compounded the crisis of overproduction. By the 1920s, the Brazilian government was borrowing heavily to sustain these policies, while new urban and industrial interest groups were rising up in opposition. The collapse of the international economy in 1929 hit international commodities hard, eroding any remaining support for the São Paulo coffee oligarchs. The Revolution of 1930, led by one of the nation’s most famous presidents of the twentieth century, Getúlio Vargas, overthrew the republic and recentralized political power, bringing a close to the experiment with municipal autonomy. The mandate for meaningful investment in municipal infrastructure and services for Brazil’s citizens that originated with the nation’s independence endured for more than a century. This is not to argue that the state took over these responsibilities immediately upon independence; the nineteenth century was a time of transition from the colonial tradition of common-hand contributions of financial and physical resources by local notables to the interjection of the state into the provision of public services. But the expectation that the state provided these services in exchange for newly standardized and codified collections of public revenue, whether at the local, provincial, or national level, had come to predominate by the end of the empire and was fully in evidence during the First Republic. This century of public finance was one of learning to pay taxes. Brazil transitioned from a country where public goods were provided through private beneficence to one where public goods were paid for through taxes, fees, and fines.

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Despite the far-reaching and specific responsibilities established for the municipal council, and the growing acceptance that the state should honor these responsibilities, no study of Brazilian public administration argues that the Brazilian population was well served by its municipal leadership. Municipalities seem to have done a terrible job of delivering statemandated public goods and services to the people residing in their administrative boundaries. Historians have attributed the poor record of local governance in rendering services to its population to three major causes: patronage, prejudice, and ineptitude. Patronage resulted in poor governance, it is argued, because the municipality occupied a subordinate position within the system of favors and loyalties that dominated nineteenth-century politics. Richard Graham’s work on political patronage in the Brazilian Empire shows that the hand of Brazil’s emperor reached down to the level of the ward boss through a series of cascading political appointments.29 It was the ward boss who oversaw the voice votes that put provincial deputies in the national chamber. The provincial deputies gave support to the central government for its agenda, which in return granted the provinces autonomy in taxation, legislation, and political coercion.30 This left local administration in the hands of political bosses who maintained peace and delivered votes in exchange for political and material favors from their superiors. José Murilo de Carvalho characterizes nineteenth-century politics as “Shadow Theater” that stood in for a true liberal state. He writes, “In times of normalcy, the fiction of the constitutional regime, of representation, of parties, of political liberalism, of civilization predominated,” but this was a state with a “big head but very short arms. It was a giant in the Court but did not reach the municipalities and barely reached the provinces.”31 Scholars like Linda Lewin, Marvin Harris, and others have argued that this arrangement shortchanged the Brazilian population and stunted political, social, and economic development because locally powerful agents skewed the distribution of gains toward adherence to their clientele.32 Research by Judy Bieber on nineteenth-century Minas Gerais and James Woodard on twentieth-century São Paulo demonstrates the political value of delivering some services through local administration: complaints about the dearth of services could serve as fodder for an opposition campaign.33 Likewise, provision of services could be seen as political patronage if these services were delivered in such a way as to enhance cohesion to one client group or another.34 Prejudice was also apparent in public administration. Urban public

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health initiatives, housing policies, property rights, public safety, and urban reforms in Rio de Janeiro, where most research on urban services and public administration has been done, tended to favor the well-to-do while harming the poor through a combination of neglect and open harassment.35 Sidney Chalhoub’s work on the socioeconomic biases in delivery of public health measures in the era of yellow fever and Jeffrey Needell’s and Teresa Meade’s research on urban renewal programs that eliminated entire working-class neighborhoods in the name of disease eradication clearly demonstrate the prejudices against the poor and nonwhite. Thomas Holloway and June Hahner have shown the brutal treatment of Rio’s urban poor at the hands of the police, who used repression to maintain order as the Brazilian elites sought to improve the city’s image to potential foreign investors. Brodwyn Fischer’s research on property rights reveals structural discrimination that offered stable housing to the marginalized, yet did not provide it. Moving outside Rio de Janeiro, the scant research on local governance paints a picture of a fairly traditional society where inexperienced or inept civic leaders ventured little and gained less. On the Minas Gerais frontier, for example, local notables controlled the municipal apparatus and failed to deliver much value to their public in the way of infrastructure or services, because ineffective administrators could not get the attention of the provincial government in times of financial need. Judy Bieber finds the root of this ineptitude, in part, in the combination of a sleepy economy and a distant, unresponsive legislative assembly that failed to respond to local requests for resources.36 According to David McCreery, the dreary and desolate frontier province of Goiás received poor governance due to reticent political appointees from other provinces who refused to take up their posts. This reticence made it difficult to advance municipal agendas that might have improved the quality of life.37 In situations where appointees could not be persuaded to step up, local politicians unsuited to good governance stepped in. James Woodard argues that the quality of the local political bosses in the Republican stronghold of São Paulo was directly related to the economic fortunes of each municipality. In the poorer regions with fewer opportunities for great wealth, bosses tended to be “less impressive types,” though they were not all uneducated rustics.38 The subordinate position of the municipality in the power hierarchy is believed to have negatively affected the quality of the individuals attracted to local administration. This argument was advanced for the colonial era, the empire period, and the republican

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period to 1930, representing an unfortunate thread of continuity across Brazilian history.39 We can find support in the historical record for all three causes of poor local governance— patronage, prejudice, and ineptitude— but while they may have perpetuated the problem and exacerbated its distributional inequalities, they do not address its origin. I argue that the origin of inadequate municipal public services rested in a very different cause: the structure of the tax system. Two major problems impeded the ability of the tax system to satisfy the ambitions of the fiscal state. First, Brazil relied extensively and almost exclusively on indirect taxes until well into the twentieth century. Revenue at all levels of government was generated through indirect taxes on the circulation of goods and services and on wealth transfers, such that the burden of public finance fell disproportionately heavily on the poorest members of the organized economy.40 A government report published in 1883, tasked with better defining revenue collection rights and practices at all levels of government, acknowledged that existing revenue sources were inadequate, but that direct taxation of property was not under consideration.41 The income tax was proposed in Brazil in 1889, but was not enacted until 1922 and not enforced until 1926. At no time under the empire was Brazil’s stock of wealth directly taxed to contribute revenue to support the mandated investments in social overhead capital and public services.42 The second problem arose when the structure of public revenue in Brazil disproportionately benefited the general government and deprived municipalities of the funding sources they needed to fulfill their extensive mandate. This structure dates to the earliest years of the Empire of Brazil. Taxes on the international sector, the most important sector of the Brazilian economy, went directly to the general government. Taxes on property transfers, including taxes on slaves and inheritance, went to the provinces. To the municipalities went the responsibility to provide the bulk of public services, but there were no specific revenue sources to pay for these services. They relied on local taxes, fees, and fines that did not conflict with provincial or general government revenue, meaning that they were limited to revenue sources not substantial enough to attract the avaricious attention of either provincial or national authorities. This tax structure granted almost 77% of total public revenue to the imperial government, while the provinces collected 18% of all public revenue. At the end of the empire, a mere 5% of all public finance supported the municipal governments.43 This allocation of revenue improved under the republic (1890–

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1930), when municipal revenues rose to between 12 and 18% of all public finance, but the regressive nature of indirect taxation remained constant. While scholars have made passing mention of this imbalance in macroeconomic terms, there is very little research on what municipal poverty meant for the urban populations and the councils that served them, or how this poverty affected the practice of patronage that was so pervasive in nineteenth-century Brazilian life. My research on municipal finance in the province of São Paulo finds that local revenue was inadequate to pay for needed public services, a persistent shortfall that left major public works, including projects related to public health and safety, unfunded or incomplete, forcing administrators to scramble to fulfill an impossible mandate. This simple fact set up a century of tension between sources and uses of municipal finance. Local notables, despite a welldocumented system of political patronage that was supposed to deliver rewards down the chain, received very little support from their provincial patrons in the form of revenue to improve the lives of their citizens, clients, and others alike. In this book, I use municipal ordinances, mayoral reports, citizen complaints and requests, municipal council correspondence with provincial and state legislatures, and financial statements such as budgets and income and expenditure reports to recreate the story of how municipalities provided public services and how they paid for them. The setting for this investigation is the São Paulo hinterland. São Paulo may seem like an extraordinary case to study the first century of the relationship between the Brazilian state and its citizens, because it was in many ways atypical of Brazil’s trajectory from colony to empire. Emilia Viotti da Costa suggests that municipal administration in colonial São Paulo may have been “more democratic in structure” than councils in other areas of the colony due to the lack of “extraordinary concentration of wealth that was typical of the sugar areas,” although she concedes that Indian labor and gold in Minas Gerais “led to the development of a seigneurial mentality, with its preoccupation with genealogy and family struggles.”44 Alida Metcalf’s excellent study of colonial Santana de Parnaíba verifies this assessment. Even without the material wealth of sugar or the pageantry of the high colonial institutions, the settlers in this relatively poor region of Brazil created a hierarchical social structure similar to the centers of colonial wealth and power in the sugar-producing Northeast.45 Moreover, by the nineteenth century power had dislocated to the Southeast. The discovery of gold had shifted the colony’s capital to Rio de Janeiro forty-five years earlier. Now

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the arrival of the royal court in 1808 gave additional impetus to development of that region. We know in hindsight that São Paulo became one of the richest provinces of the nation by the end of the nineteenth century, but it began the century in relative poverty before amassing its fortune through mixed economic enterprise and experiencing a significant commodity boom in the late 1870s driven by growing world demand for coffee.46 There was nothing to guarantee it would succeed, but succeed it did. By the end of the nineteenth century, if any region of the new nation was in a financial position to provide public services to improve the standard of living of its citizens, it was São Paulo. São Paulo’s economic and political interests forged the Republican Party that advocated for fiscal federalism to keep state-generated wealth at home, and that took political leadership after the fall of the empire in 1889. Because of its dominance in the coffee trade, São Paulo produced more wealth, invested in more infrastructure, imported more workers, and captured more national-level power than any other state in Brazil by the turn of the twentieth century. Its coffee fortune and resulting political dominance made it different from the other Brazilian states, there is no question, which gives the reader legitimate reason to wonder whether it can stand in for the nation as a whole. I argue that it can, for two principal reasons. First, export wealth had only a tangential relationship to municipal finance, as I develop below. Second, São Paulo’s municipalities were similar in their legal, administrative, and fiscal structures and operations to all municipalities in Brazil, which were governed by the same laws and responsible for the same functions. Therefore, we can use the examples from São Paulo as a benchmark to understand the municipal history of Brazil. Moreover, its wealth came relatively late in the century studied here, and only in some regions of the state. In the Empire of Brazil, São Paulo was as poor or poorer than most of the country, so it was very probably representative of many Brazilian municipalities. When it experienced the coffee boom and grew much wealthier than the rest of Brazil and therefore less representative, it became the upper bound or best-case scenario for investment in municipal services available to any Brazilian settlement. The logical extension of this argument is that municipalities in other regions of Brazil were less able to finance the public services their communities required. Given that São Paulo municipalities were often unable to supply their own communities with sufficient public services, this is a sobering statement. This inquiry into public finance for public services shows that despite

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the gains in wealth across the nineteenth century, fiscal resources fell short of public needs because of the structure of the tax system, which drained off the most lucrative sources of public revenue for national and, to a lesser extent, provincial administrations. This imbalance was exacerbated by Brazil’s refusal to entertain direct taxes on wealth or income. The revenue sources that supported the state at all levels of government were indirect, ensuring that tax revenue would either be insufficient or would never be so burdensome as to provoke revolt; the Brazilian general government opted for local poverty over political instability. To fill the gap between financial sources and need, São Paulo’s municipal councils appealed to the provincial legislatures for supplemental funding to satisfy their mandate across time and space. These appeals were almost always unsuccessful. From the founding of the empire in 1822 to its overthrow in 1889, councils were placed in the weak position of petitioning for provincial subventions with very little to show for their efforts. This outcome held true for wealthy municipalities and modest ones, and remained consistently true over time. Municipalities differed in population, economic bases, wealth, and location, yet they submitted the same financial statements and lodged the same complaints of the inadequacy of their revenue base to meet their needs. Municipalities regularly expressed frustration with provincial authorities over their financial difficulties. Even in the municipalities that were home to powerful political patrons whose local rule rested either on the use of coercion or on delivering material benefits, appeals were common and generally unsatisfied. This meant that Brazilians found the state incapable of tending to the basic public services that it, itself, had declared as an obligation to its citizenry. The state essentially ensured that such services could not substantially improve the standard of living or quality of daily life in Brazil’s scattered urban settlements. To understand the first century of Brazil’s socioeconomic development, then, we need to understand how the municipality sought to fulfill its mandated responsibilities. It is not enough to accept as historical truth the idea that Brazilian government let its citizens down. We need to understand why and how this happened, and whether its failures were tempered over time. To that end, I follow the finances of seven municipalities in the province of São Paulo from independence in 1822, when the nature of the municipality in the life of the nation was first articulated, to the 1930 coup that ushered in the Vargas regime and eliminated the municipality as an autonomous entity. I document how revenue generation policies and practices affected the provision of public goods, such as

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map 1.1 The municipalities in São Paulo, Brazil a

Source: Elaborated from the map “Itinerário da 1 viagem de Auguste de Saint-Hilaire pela província de São Paulo.” In Saint-Hilaire, Viagem à província de São Paulo e resumo das via­ gens ao Brasil, província Cisplatina e missões do Paraguai (São Paulo: Livraria Martins, 1940), frontispiece.

infrastructure, health, and education. These municipalities— Amparo, Araraquara, Campinas, Franca, Ribeirão Preto, Rio Claro, and São Carlos do Pinhal (map 1.1)— were among the largest and richest in the state of São Paulo toward the end of the nineteenth century. The statistical yearbook for 1897 recorded the financial standing of 129 of that state’s 155 municipalities.47 Six of the seven municipalities studied in the pages that follow were among the largest 14 municipalities in São Paulo in terms of population. Campinas, Ribeirão Preto, and São Carlos all had populations above 50,000. Only the capital city, São Paulo, was larger. Two of the study’s municipalities, Amparo and Araraquara, had populations in the 40,000-to49,000 range and one, Rio Claro, sat in the 30,000-to-39,000 range. Of the 129 municipalities that provided financial data for the 1897 statistical yearbook, 23 brought in revenue exceeding 100,000 milréis. The seven municipalities that I study were in this group. All seven of these municipalities can be found in the three zones of São

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Paulo— indeed of Brazil— experiencing the most pronounced economic growth in response to the coffee boom during the nineteenth century. In fact, they were neighbors to one another, situated on São Paulo’s high plain and connected along well-worn roads and through regional commercial exchanges. A description from 1886 captures the beauty and fertility of the São Paulo altiplano where the municipalities reside: “The high region, a vast table, enters the interior [of the state], here dressed in luxuriant vegetation, there unfolding in extensive, lightly undulating fields, always furrowed by rivers, brooks and streams, which fertilize the soil.”48 If a traveler were leaving the capital city and headed northwest through this verdant landscape, he or she would encounter Campinas on the plain about 100 kilometers away. From Campinas, the traveler might take a side trip through São Paulo’s hills and valleys, following its rivers 65 kilometers to the east to Amparo, or continue on the northwestern road 100 kilometers to Rio Claro. Sixty kilometers beyond Rio Claro along the same northwestern route through some of the most fertile rich red soil fields in the province, he or she would come upon São Carlos, with Araraquara another 65 kilometers further on. Northeast from Araraquara toward the Minas Gerais border, the traveler would pass through forests and fields to reach Ribeirão Preto after 90 kilometers, and climb into the mountains to arrive in Franca, 90 kilometers beyond. All these municipalities were founded before the arrival of the railroad, and traded among themselves and with neighboring provinces; but when the railroad did arrive, it linked them to the port, which raised their land values and drew them into commercial production for the international market.49 While the economies of most of these municipalities flourished from the coffee boom, several maintained diversified economic bases and kept strong ties to the domestic economy. Campinas was in the Central zone, one of the oldest, most heterogeneous, and most prosperous regions of the state, with interests in sugar, cotton, coffee, livestock, and industry, and an early reliance on slave labor. Rio Claro, Araraquara, and São Carlos were in the Baixa Paulista zone, home to some of the wealthiest coffee planters in the nineteenth century and site of the earliest experiments with immigrant labor. Its economy was stimulated by the development of the Paulista Railway. Amparo, Ribeirão Preto, and Franca were in the Mogiana region that originally developed because of the cattle and salt routes linking São Paulo to the provinces of Minas Gerais and Goiás. These three zones accounted for 45 to 50% of the population of the state from 1886 to 1920, and produced 68% and 71% of all coffee in São Paulo in 1905 and

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1920, respectively.50 Given São Paulo’s prominence in international coffee production, these zones accounted for about half the world’s coffee at the turn of the twentieth century. Producers in these zones held close to half the slave population of the province between 1836 and 1886, and more than 45% of the foreign population once immigrants were brought in to supplant captive labor. All this is to say that if any municipalities in Brazil were well situated to provide services related to standards of living and well-being, it was the municipalities in this region.51 While these were among the wealthiest municipalities in São Paulo, the only similarity between them in fiscal terms was in the types of revenue they collected, which were determined by law and common to all municipalities, and in the very broad categories of expenditures that the revenue financed. Otherwise, these seven municipalities imposed distinctly different tax burdens on their populations and invested at different levels in the public services they were required to provide. In 1897, the largest of the seven, Campinas, had the highest per capita tax rate of the group, while the second largest, São Carlos, had the lowest. Four of the seven taxed their citizens at rates exceeding the state average; the other three taxed at rates well below the average.52 The varied economic bases and tax burdens help us understand how local economic conditions generated tax revenue, how tax revenue translated into public goods, and how public goods affected socioeconomic development. The seven municipalities show us how the ability of the local state to invest in community development and well-being was entirely predicated on local economic fortunes. Given that most municipalities were not as fortunate as São Paulo’s in terms of natural resources, the probability that local revenue was insufficient to provide much in the way of welfare-enhancing investments for most Brazilians was high. Given the recent scholarship that shows a clear and compelling link between such investments at the turn of the twentieth century and socioeconomic outcomes a century later, the decision to finance human development through local taxes, fines, and fees on micro economies was a costly one. *** The book is structured in eight chapters, including this introduction, and spans a century of Brazilian history, a period that captures important shifts in institutions shaping the realm of possibilities for municipalities. The empire period was a time of heightened centralization and oversight,

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during which municipalities were administrative bodies with no financial or legislative autonomy. Like minor children, they were required to submit all finance-related records for annual review by the provincial legislative authority, and to submit the local codes of ordinances governing everyday life for periodic review and approval. By contrast, the republican era represented the emancipation of the municipality from oversight. Municipalities were endowed with regular sources of income and with legislative powers to shape their economies and societies. This major institutional change creates a natural experiment for explaining how economic and financial conditions bounded administrators’ decisions over the allocation of scarce resources, a comparative framework that runs through the chapters. There are two variables to municipal finance that we need to analyze in order to understand how municipal finance affected Brazilian socioeconomic development: sources (revenues) and uses (expenditures). Chapters 2, 3, and 4 examine the sources side of the equation. Chapter 2 takes a close look at the foundational documents— the 1824 constitution, the 1828 regulatory law, the 1834 Additional Act, and the 1891 republican constitution— to see how the Brazilian state viewed the municipality’s place within it and how the municipal role changed over time. It establishes the legal responsibility imposed on the municipality by the central government to provide the public services that enhance quality of life, and then examines the municipal codes written by local administrators to govern the daily life of the towns and their hinterlands. These sources illustrate the idealized role of the local state in the life of the citizen and of the interaction of the citizen in the municipality. Chapter 3 establishes the fiscal structure of the Brazilian state in which municipalities operated. This chapter shows that the state at all levels of governance— national, provincial, and local— relied on indirect taxation that funneled the lion’s share of public revenue to the central government, leaving very little for municipal use. The fiscal structure of the Brazilian state ensured inequality— between communities and among their inhabitants— from the beginning of the period under study to the end. The reliance on indirect taxes was regressive, and the apportionment of revenue between the three levels of government that shortchanged the municipality meant that the government with the greatest responsibility for the public good had the fewest resources to invest in the attendant services. The administrative emancipation of the republic reinforced this inequality, because it doubled down on the local economy as the source of

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municipal revenue. Consequently, not only did municipalities continue to rely on the circulation of goods, services, and people through their local economy for their revenue base, but new rules allowing municipalities to borrow money on the capital markets for major projects tied their borrowing capacity to their revenue streams. Another consequence: inequality of investment in public goods between rich and poor communities persisted and widened. Chapter 4 provides an overview of the broad trends in municipal public finance in the first century of Brazil’s independence. The chapter asks what sources of funds the municipality had available to it by law and convention under the two institutional settings of empire and republic, examines its tax burden, and investigates alternatives to taxes in funding its budget. The chapter also asks whether the broader economic boom of the late nineteenth century resulted in fuller local coffers, and how access to credit markets after the 1889 political regime change affected public finance. It details revenue sources used by municipalities to fund their administration and public services, and what the nature of those sources meant for the provision of public services. Like the chapters that follow, it questions the assumption that municipal administrators were, in fact, inept. Ample evidence from the cases suggests that municipal councils and municipal administrators sought to fulfill their mandates despite the financial straits in which they operated. Chapters 5, 6, and 7 turn to the “uses,” or spending, side of the municipal finance equation. They examine municipal spending patterns in three major categories of public goods to outline how perennial financial strains affected municipal investment in human development, a concept that integrates the economic, physical, and educational aspects of a society’s well-being. The three public goods categories are urbanization, public works, and physical infrastructure; public health and hygiene; and public education, beautification, and leisure. These chapters study the services provided over time, and how administrators prioritized them in relation to other services they were unable or unwilling to fund. Also analyzed are the political wrangling related to each set of services; the mechanisms by which public services were delivered over time, such as private beneficence, public bidding, and municipal direct investment; and the relationship between the public consumer (citizen) and the public administrator (municipal council) in the consumption of these public services via citizen requests and complaints. Chapter 5 examines urbanization, public works, and physical infrastructure. Chapter 6 examines public health and

introduction

25

hygiene. Chapter 7 examines public education, beautification, and leisure. Chapter 8 analyzes how the relative vibrancy of local economies shaped the provision of public services, which in turn shaped local socioeconomic development, and in closing assesses how these investments affected the human development of their citizens.

chapter two

The Municipal Ideal In all the existing cities and villages, and in the ones created in the future, there will be councils, responsible for the economic and municipal government of the cities and villages.1 — The Brazilian constitution of 1824

M

unicipalities at the time of Brazil’s independence from Portugal were small affairs. When the first national census was conducted in 1872, Brazil registered just 643 municipalities, despite its continental size and a population just under ten million inhabitants. This meant that every municipality was endowed with an average of about fifteen thousand souls, slave and free.2 The population at independence fifty years earlier has been estimated to be much smaller, somewhere around four million, and the number of municipalities was certainly fewer. 3 Brazil had a very low rate of urbanization before the twentieth century, so we can readily imagine that the towns and villages dotting the landscape of most municipalities were very small indeed. If we consider that the rights of citizenship extended only to the free population, probably two-thirds of all living in Brazil, the effective governance of the country becomes more intimate still. The administration of the daily life of the Brazilian nation was carried out at the retail level, where a few thousand people interacted with their elected town councilors to resolve the daily interactions of their economic and social lives. This chapter examines the municipality as conceived by the framers of Brazil’s constitutions, and the municipality as defined by the posturas, or local ordinances. Brazil’s imperial constitution of 1824, which established the powers of the national government (hereafter referred to as the general government, using the preferred terminology of the day); the Law of 1 October 1828 that fleshed out the constitution’s general contours;

the municipal ideal

27

1834’s Law of Constitutional Reforms, known more familiarly as the Additional Act, which modified the constitution by granting provincial governments legislative authority; and the republican constitution of 1891 all established the municipality in the context of the imperial and republican administrative regimes of governance and pronounced the municipality’s central role in the provision of public goods. They establish the ideal municipality from the perspective of the nation. The posturas were the rules and regulations that ordered the daily life of Brazil, where the standards establishing the appearance of towns and the functioning of their markets were written, where matters of public comportment were determined, and where the punishments for infractions against these appropriate behaviors were exacted. The legal status of the municipality in Brazilian life depended entirely on the institutional settings— centralized empire from 1822 to 1889, decentralized republic from 1890 to 1930— that reigned during the nation’s first century of independence. Initially celebrated as the fundamental cellular “stuff” that made up the nation, by 1834 the municipality found its autonomy subordinated to provincial oversight. For the next fifty- five years, municipalities operated at the whim and will of provincial legislatures, which in theory rendered them impotent and unimportant. This subjugation of democracy— so described by the liberal reformers later in the century— was remedied by the republican coup of 1889 that eliminated the centralized empire and adopted a decentralized federation of states. For the next forty years, municipalities operated with political and legislative autonomy— at least on paper— to serve their citizens as they best determined. The Revolution of 1930 reversed course once again when it removed municipal mayors and replaced them with interventors appointed by the federal government to reclaim political and administrative control over the municipality. Despite these definitions as a subordinate or an autonomous entity having shifted during the century, the municipality never ceased to be the building block of Brazilian society and economy. No matter the institutional setting that determined its relation to other levels of governance, the municipality was charged with the responsibility to provide the public goods enhancing the welfare and raising the standards of living of the Brazilian population. From the foundational documents of the nation’s independence to the Revolution of 1930, the municipality remained the first point of contact between state and citizen.

28

chapter two

Municipal Governance in the Empire The responsibilities of the three levels of Brazilian imperial governance— general, provincial, and municipal— were established in law and executed in practice through public budgets, as each level of government raised and spent its revenue on the personnel, projects, and services that would fulfill its responsibilities. The general government was responsible, not surprisingly, for the imperial family and court, international relations, domestic law and order, and national economic and financial policy.4 These broad national and international responsibilities were reflected in the spending categories of its annual budgets: the imperial household; the Secretary of Justice; the Secretaries of State, Navy, and War; and the Secretaries of Finance, Agriculture, Commerce, and Public Works.5 The provincial government was tasked with establishing its civil, legal, and ecclesiastical boundaries; providing public education; setting the rules for expropriation of private property for public use; managing provincial public assets;6 overseeing public works like provincial roads and interior navigation; collecting vital statistics within the province; civilizing the indigenous populations; and establishing internal colonies to settle the province. After the passage of the 1834 Additional Act, the province became responsible for municipal governance and financial oversight, particularly reviewing and authorizing municipal budgets, establishing municipal administrative positions, and approving municipal proposals for policies on the local economy and law and order.7 These responsibilities were reflected in the budgets for São Paulo province. They show that the province nurtured the souls of Brazil’s citizens by subsidizing public observance of Roman Catholicism; maintained provincial roads and bridges by establishing tolls to pay for their upkeep and improvement; maintained the peace through police presence; and provided children’s primary education by paying for schools and teachers’ salaries.8 To the municipalities went the responsibility for providing the services that most directly affected standards of living and the quality of daily life. Through a series of ordinances— the posturas— municipal councils determined what the municipality should look like, how it should function, and how its residents should interact in social and economic spheres. The posturas regulated essential activities for the well-being and prosperity of the municipality: building and maintaining the physical infrastructure, delivering sufficient drinking water, securing the food supply, promoting com-

the municipal ideal

29

merce, improving public health, and protecting public safety. Streets, sidewalks, roads, bridges, water and sewer systems, lighting systems, hospitals and cemeteries, markets and abattoirs, shops and factories, entertainment and celebrations were all regulated by the posturas drafted by the municipal councils.9 While the responsibilities of the various levels of government were established in the 1824 constitution and 1828 regulatory law, it was the passage of the Additional Act in 1834 that standardized governance in Brazil’s first century of independence.10 This act, which granted legislative authority to the provinces, introduced a whole set of questions not contemplated under the original centralized design for governance. Who collected the province’s taxes? Who was responsible for administering its treasury? Did judges get paid for their work? When would the legislative assembly meet? Were its legislators remunerated for their work? How were laws to be published and disseminated? Who kept track of how many people lived in the province and what their primary economic activities were? Who was the chief administrator in each municipality? These questions did not have clear answers until 1835, when the first provincial legislative assembly met to work through the issues. São Paulo Law 18 of 1835 created the position of prefeito, the municipal prefect or mayor.11 This was an open-ended appointment by the legislative assembly, although there were provisions for his removal or resignation from the post. The mayor was responsible for executing the orders of the provincial authorities and enforcing the municipal code. He had the power to name— and also to fire— the fiscal, the fiscal agent and municipal inspector, whose job it was to enforce the ordinances, as well as the subprefects, who administered districts within the municipality. The mayor also had the responsibility to inspect and review local officials to certify they were fulfilling their duties; be the person to whom whistleblowers reported malfeasance; and direct the police force to ensure law, order, and tranquility. The law even stipulated that the mayor dress in a fashion similar to the secretary of the provincial government, and that he occupy the seat of highest distinction at public events (except when the municipal councilors or district judge were present, in which case they held this honor) as a visual reminder of the provincial presence in municipal affairs. In short, the mayor stood at the juncture between provincial and local power as the representative of the former and the watchdog of the latter. The remaining patronage appointments were the secretário (secretary), the porteiro (doorkeeper), and the procurador (municipal attorney, ac-

30

chapter two

countant, and tax collector).12 These were nominated to their positions by the municipal council, most likely as a reward for faithful service to the local patronage machine. Each had a legally mandated salary drawn from municipal revenues. The secretary kept the books that recorded municipality business. He collated the record of municipal ordinance infractions submitted by the municipal inspector; made out and registered business licenses and property titles; and registered and archived the official correspondence, petitions, announcements, reports, regulations, and other papers of the municipal council. In other words, he collected the scattered documents of various official acts and copied them into an official set of books. In addition to these duties, he helped the fiscal agent with planning the city layout, aligning municipal streets, and keeping the books for municipal finance.13 The porteiro, or doorkeeper, fulfilled the orders of the municipal council and delivered the official papers that came from its deliberations. He was responsible for keeping the council’s meeting room clean and well stocked with furniture and supplies. He accompanied the fiscal agent on his patrols and helped write up warnings and tickets for violations. When court was in session, the porteiro maintained order and supported the juries in whatever they required. He warned spectators to maintain their silence and respect, and kept out drunkards and individuals with hats or canes. In some places, the porteiro held auctions of stray animals caught roaming the urban streets. Like the other appointees, he was entitled to various fees for services rendered, especially in assisting the city planner with street alignments and building permits. The procurador, or municipal attorney and accountant, was best known to the public as the tax collector. He collected taxes, fees, and fines through personal encounters, and went after recalcitrant taxpayers through legal action. He used these revenues to pay the municipality’s bills, after deducting a 12% commission as his compensation. Both the revenues collected and the expenses paid were recorded in detail in large ledgers. These ledgers comprised the basis for the procurador’s quarterly financial reports to the municipal council at its regular meetings. Because all of the town’s revenue passed through his hands, the procurador could not take the position until he had put up a bond backed by two members of the community in good standing. If he neglected his duties and failed to collect fees and fines owed to the municipality, he was subject to a fine and dismissal.14 Of all the municipal positions, the mayor-nominated fiscal was the bus-

the municipal ideal

31

iest. He was part urban planner, responsible for ensuring street alignment and supervising public works projects; part police officer, charged with patrolling the streets to maintain order and writing tickets for infractions of the ordinances; part inspector, responsible for visiting businesses and homes to inspect interiors and yards; and part DMV, responsible for issuing vehicle licenses. He was compensated through retaining a percentage of taxes, fees, and fines he collected. As time went by and settlements grew in size and complexity, the posts expanded to include the city planner, road inspector, cemetery manager, public lighting inspector, weights and measures inspector, municipal market and slaughterhouse inspectors, town veterinarian, water and sewer network inspector and caretaker, and so on. Each was charged with inspecting and maintaining his respective area of municipal governance, communicating problems to the municipal council, and requesting repairs. Although municipal administrators were responsible for day-to-day operations, local governance fell to the councilors who sat on the câ­ mara municipal, or municipal council. These were unpaid representatives elected from among the eligible municipal population: men over the age of twenty-five whose annual income exceeded one hundred milréis.15 They were elected to four-year terms and obligated to meet at regular intervals, typically once every three months. When an issue requiring immediate attention arose, they met in special sessions as well. Minutes from each session always began with the roll call. Because traveling to town for three days of unpaid meetings was not a priority for most, especially early in the independence period when formal governance was new, every municipality publicly noted absent councilors and imposed a monetary fine.16 The councilors then discussed the pressing matters of the municipality that had accumulated since the last meeting, responded to correspondence from the provincial legislative assembly, reviewed quarterly financial statements, heard complaints from citizens, and discussed resolutions, which had to be forwarded to the provincial legislative assembly for approval. After each meeting, the executive officer wrote reports chronicling the work of the council and the municipality’s challenges for the future. Council members also sent their own petitions and requests to the legislative assembly, acting as stewards of municipal assets and advocating for municipal improvements. This elaborate structure of municipal governance might give the impression of active and engaged leadership of municipal life, but the municipal council had very little real autonomy during the empire period and

32

chapter two

operated as little more than an administrative body. The Additional Act had ensured, in great detail, that the Brazilian municipality had no control over its laws or finances; both were subjected to close review by committees of the provincial legislative assemblies. Municipal councils could voice opinions, make requests, attempt to shape local governance, and advocate on behalf of their citizens, but they had no real power to influence the deliberations or outcomes issued from the provincial oversight committees. Indeed, their petitions and requests to the provincial legislature often had a pleading quality. The complicated procedure for creating municipal codes offers a clear view of the layers of bureaucracy created by centralized provincial oversight. In a hypothetical scenario, let’s say a town grows tired of the number of people who let their horses drink from the public fountain. First, a complaint is lodged with the local council. Then the councilors draft a new code to address the issue, determining a reasonable fine. The code is discussed, altered if necessary, and then approved at the municipal level. Once approved, it is sent to the provincial president with a request that it be presented to the legislative assembly for review and further approval. The president forwards the code to the Committee on Municipal Council Accounts and Budgets, the most important committee for municipal governance under the empire, because it oversees local governance, local revenue, and local-provincial relations.17 The committee, in turn, forwards the code to the subcommittee charged with reviewing all ordinances, where the code is reviewed in great detail.18 Once the subcommittee finishes editing the proposed code, it goes to the committee charged with drafting laws, where it receives a formal review for approval and eventual publication. The final step is publication for posting and dissemination. The entire process, start to finish, takes at least one year.19 And at that point, the municipality can fine anyone who breaks the code by letting his or her horse drink from the public fountain.

The Municipal Ideal: Posturas in Imperial São Paulo The nation’s founding documents established the municipality’s place in its administrative structure and mandated the responsibilities of the governing municipal council. However, it was up to the municipalities to determine the specific contours of daily life. The interactions between state and citizen that shaped the everyday life of all Brazilians were contained

the municipal ideal

33

in the posturas, the collection of municipal ordinances that bounded and limited what administrators considered to be appropriate behaviors and standard practices of all citizens. From public health to public morality, from business enterprise to consumer conduct, the ordinances created detailed blueprints for the daily interactions of citizens in the physical, social, and economic realms. Each year, municipal councils were responsible for identifying and reporting on the major challenges facing their community, and proposing solutions to these challenges. Alterations and additions to municipal ordinances were the principal means by which these councils satisfied their duties. Beginning in the 1830s, the municipal codes were typically revised and resubmitted for approval and publication by the provincial legislative assembly every ten to fifteen years.20 This reapproval process was necessary due to the many small modifications made over the years since the last publication: new articles had been drafted, debated, and returned for revision, and existing articles had been amended, revoked, or supplanted. Thousands of memoranda and official correspondence flowed between municipal councils and subcommittees of the provincial legislative assembly for the seven cases studied here alone. These revisions to the municipal code acquired the force of law as soon as they were individually reviewed and approved by the legislature, a process that allowed municipal councilors to address a flaw or shortcoming in the body of ordinances without having to revisit the entire code. The periodic publication of complete codes synthesized these changes, thereby providing benchmarks for studying the evolution of municipal governance across the century. Municipal governments had no legislative authority in the Empire of Brazil, but these posturas were crafted by local administrators in accordance with local needs. As such, they represented (and still represent) a significant expression of autonomy in Brazilian community governance. In their earliest iterations, these ordinances began as collections of a few dozen articles with no internal structural logic. To take one example, regulations on the use of municipal commons for pasture were followed by the requirement that owners of carts that circulated on municipal streets donate a wagonload of rocks for paving every year, which in turn was followed by a restriction on hunting. In another example, an article establishing the norms for street alignment was immediately followed by an article regulating loose animals in the streets, which in turn was followed by a prohibition of gambling by slaves.21 After a decade or so, however, posturas fell into an ordered collection of rules about the physical city, the

34

chapter two

commercial city, law and order, the economy, and public health. As urban settlements expanded over the nineteenth century, these collections of ordinances became lengthier and more detailed, expanding from an initial handful to more than two hundred articles in some municipalities. The expansion of these codes, particularly their structure, demonstrates that they were not imposed from outside and did not follow a prescribed pattern. They were local codes reflecting the concerns of local governance as administrative bodies sought to establish behavioral norms in their community. The posturas varied in length and organization across municipalities, but also over time within municipalities. Of the twenty-five complete codes I located for the seven municipalities between 1833 and 1889, just two sets were “twins,” or codes within a municipality that did not change from one version to the next, and two sets were “adopters,” or codes for one municipality that were adopted from another municipality at a later date in a structurally similar or identical form.22 Rio Claro is an example of twin codes: Its 1867 and 1884 posturas were identical to each other in structure. Araraquara’s 1872 code was an adopter. It was almost identical to Rio Claro’s 1867 code. By 1889, though, Araraquara’s revised posturas had evolved substantially (table 2.1). The remaining nineteen codes were unique in structure and organization. Except for the first chapter, which always contained the building ordinances, the order of major categories regulated by the municipal councils was different between codes of each municipality and different from the codes of the other municipalities. Table 2.2 shows the progression across time of the two oldest cases.23 Municipalities tended to regulate similar types of conduct, because these regulations were mandated in the 1828 law that determined the responsibilities of municipal governance. If we think about the legislative procedure involved in writing and approving posturas, it is improbable that the provincial assembly checked these codes against the 1828 law to make certain that every provision was covered. It is more likely that municipal administrators used the law as a guideline for what they should be regulating. It is clear just from this brief glance that no blueprint or master principle was imposed on municipal ordinances, even though they were ultimately reviewed, revised, and published by the provincial legislature’s oversight committees. Their unique qualities represented a degree of autonomy despite the limitations on municipal governance imposed by imperial law. Ironically, these posturas, which embodied ideals of urban composure and personal comportment, were almost always written in the negative,

171 and 219

Street alignment Buildings and cleanliness Cleanliness of streets Comfort, security, and morality Public health Burials Weights and measures Agriculture Roads and highways Preventative measures Diverse dispositions Municipal revenues General dispositions

No. articles

Chapter titles

Chapter titles

No. articles

Araraquara

Street alignment Buildings Cleanliness of streets Comfort, security, and morality Public health Burials Weights and measures Agriculture Roads and highways Preventative measures Diverse dispositions Municipal employees Municipal revenues General dispositions

175

1872

Street alignment, leveling, and building Cleanliness and free transit on city streets Hygiene, public peace, and security measures Slaughterhouse and butchers Weights and measures Commerce Agriculture Roads and highways Preventative measures Cemetery Municipal employees Permits Fines and punishments Resources Municipal revenues Revenues with special application General dispositions

17

1889

Source: Elaborated by the author from municipal posturas. São Paulo, Coleção de leis, Lei 40 of 19 July 1867; Lei 64 of 14 April 1872; and Lei 183 of 22 May 1889. Note: Araraquara’s 1889 code had just one article per chapter, but dozens of paragraphs to each article that corresponded to individual articles in the earlier code. This code is in fact longer than its predecessor.

1867 and 1884

Rio Claro

table 2.1 Comparative structure of municipal codes in the empire

Building codes

Roads and highways Food supply

Public health

Animal control

Fire safety

Street alignment, building codes

Curfew

Gambling

Animal control

Food safety

Peace and security

Chapter titles

73

54

No. articles

1858/1864

1833

Campinas

table 2.2 Changes in the structure of municipal codes

Public health and hygiene Slaughterhouse rules Entertainment and gambling Merchants and commerce

Public behavior

Building codes, beautification

107

1880

Chapter titles

No. articles

Franca

Animal control

Fencing, animal control Vehicles and roads Hunting

Land use rights

8

1837

Cemeteries and burials Slaughterhouse rules

Peace and public morality Public hygiene

Street alignment, cleanliness, lighting Public behavior

206

1875

Beautification and cleanliness Public comfort and safety Peace and public morality Preventative measures Public health and hygiene

Street alignment and building

275

1889

Miscellaneous

Entertainment

Gambling

Vehicles and transportation Flammable devices, fire safety Highways and private property Cemeteries, funerals, and burials Municipal employees General dispositions Municipal revenues Municipal employees General dispositions

Agriculture

Entertainment

Commerce and industry Public works and roads Water rights

Municipal revenues Municipal employees General dispositions

Commerce and industry Weights and measures Entertainment

Piped potable water Municipal roads and other roads Agriculture

Source: Elaborated by the author from municipal posturas. ALESP Campinas, FCGP 020, PM33_023; ALESP Franca, FALP 263, CP39_009; Campinas, posturas, caderno 1.2; São Paulo, Coleção de leis, Lei 67, 31 May 1875, and Lei 186, 31 May 1889.

Roads and highways Disease containment Miscellaneous

Weights and measures Slaughterhouse rules Entertainment

38

chapter two

as if municipal administrators anticipated resistance from the citizenry against an orderly life. “It is prohibited” was perhaps the most commonly used phrase, followed by “shall not.” Every admonition against municipally determined bad behavior carried a penalty— usually fines— scaled according to the severity of the infraction. Some penalties included jail time. The codes read like missives from stern parents who had little faith in the ability of their children to behave. They assumed the worst in human nature and guarded against its translation into human behavior. We cannot read these codes as the law as it was lived. It is far more likely that new ordinances were added to correct some theretofore unimagined problem. New rules could be seen as the proverbial barn door being shut just a moment too late. Councilors tried to anticipate problems or offer solutions to problems already identified. They had to reason through how to manage increasingly complex communities, how to secure a sufficient supply of food and water, how to protect property and ensure personal safety. Even with their negative language, though, the codes contain the ideal held by their authors to maximize the peace, comfort, security, and health of their settlements. As varied as the posturas were from one another, from place to place, and across time, they expressed what the ideal municipality should look like, how it should function, and how its citizens were to interact. These posturas established the norms of local governance. The Ideal Appearance The ideal appearance of the municipality was one of order, symmetry, functionality, and beauty. An 1888 report to the São Paulo provincial president by the Central Committee on Statistics commented on the outward aspect of municipal urban spaces in the province, particularly the quality of private homes. Amparo’s homes were “of a good appearance and generally of a modern construction,” and Campinas’s warranted praise for their “refined taste and elegance.” São Carlos merited mention for its “many elegant constructions.” Rio Claro’s urban center was praised in detail: “Its streets, 26 in number, are straight, well aligned, broad, and convex; the blocks are perfectly equal. It has many plazas planted with trees, one of which has a garden. [Its] municipal building [is] one of the best in the province.” Franca was called “cheerful,” with streets that were straight and long, and public plazas that were well laid out and spacious. Its buildings, however, suffered from “the vices of old construction.” Ara-

the municipal ideal

39

raquara’s buildings were “very irregular: the homes are almost all small and low, with few buildings of a better appearance standing out.”24 The municipalities arrived, or not, at these states of elegance and uniformity thanks to the urbanization codes that opened all municipal posturas. These codes addressing the physical appearance of the urban environment described the ideal visage of the city, from the width of streets and the height of buildings to the placement and dimensions of windows and doors. Many of the urbanization codes had practical elements, such as those intended to control the flow of rainwater from roofs and gutters, but others spoke to the aesthetics of the urban space. Codes on building materials and architectural details expressed municipal councils’ preoccupation with this environment. A portion of the urbanization codes concerned the municipalities’ rural areas, but their main focus was the outward aspect of the urban center. Urban spaces were small in the mid-nineteenth century. We know from population data that with the exception of Campinas, São Paulo’s municipalities had no more than a few thousand inhabitants, with most residing in the rural areas (table 2.3). Even in the capital city of São Paulo, the most urbanized of the province’s municipalities, economic specialization and the rise of market economies around the turn of the nineteenth century had only begun to have an effect on the urban bairros, or neighborhoods. According to Elizabeth Kuznesof, these neighborhoods in 1765 were “distinguished from the rural bairros only by a few artisans and traders,” but by 1836 they were “increasingly populated by businessmen, retailers, administrators, textile, and service workers.”25 The municipality of São Paulo was far more urbanized than any other in the province in the nineteenth century, with the possible exception of Campinas. Its urban population had reached 50% by 1934, but the total urbanization for the zone in which it resided was just 33% (fig. 2.1). As late as the 1930s, the urban population for the province’s Mogiana zone (Amparo, Ribeirão Preto, and Franca) and Baixa Paulista zone (Rio Claro, Araraquara, and São Carlos) was closer to 25% of all inhabitants.26 These urban spaces, then, were incipient and malleable when the posturas were written, so these ordinances were regularly modified to accommodate population growth, boundary expansions, and increasingly complex functions. The first articles of municipal posturas concerned the layout of the urban streetscape, as settlements evolved from a space barely distinguishable from the surrounding countryside to orderly urban communities. Urbanization ordinances required all who wanted to build a structure within

1797 1821 1832 1845 1857 1865 1871 1554

Campinas Franca Araraquara Rio Claro Amparo São Carlos R. Preto São Paulo state

14,201 — 4,965 6,564 3,840

417,149

284,312

1854

6,689 10,664 2,764

1836 31,397 8,248 7,128 15,035 11,756 6,897 5,552 837,354

1874 41,253 10,040 9,559 20,133 17,325 16,104 10,420 1,221,380

1886

Source: Camargo, Crescimento, vols. 2 and 3, tables 4, 5, 6, 11, 14, 15, 16, 22; for 1874 Franca and Araraquara, Relatório Bookwalter, 9.

Founded

Population

table 2.3 Municipal population, 1836– 1934

67,694 15,491 28,900 31,891 34,192 55,729 59,195 2,279,608

1900

115,602 44,308 48,119 50,416 47,713 54,225 68,838 4,592,188

1920

132,819 60,237 66,916 55,706 39,962 51,620 81,565 6,433,327

1934

the municipal ideal

41

figure 2.1 Urban population as percentage of municipal population, 1934 Source: Camargo, Crescimento, vols. 2 and 3, tables 14, 15, 16, 22.

the city limits to consult the municipal arruador, or city planner, the civil servant in charge of laying out the settlement’s plot and approving new construction. It was illegal to construct a home or other edifice without prior consultation with the arruador. It was he who established the city grid, marked the location of new streets as settlements expanded, demarcated the lots on which the homes were built, and ensured that the streets and sidewalks were level. Streets were laid out in a grid pattern and had standard widths, while lot sizes and distances between structures were prescribed by municipal law. These codes regulated whether homes could have steps from the street (they could not in Campinas, Rio Claro, Araraquara, and Ribeirão Preto), whether front doors could have a covered entrance (no), who bore responsibility for sidewalk construction and maintenance (the property owner), and what the correct sidewalk width should be (seven feet in Campinas, five feet in Rio Claro and São Carlos). In 1889, Franca required all public squares and plazas to be, unsurprisingly, square. All ordinances prohibited residents from digging up streets, alleys, plazas, and squares.27 Ribeirão Preto’s 1889 ordinances were also the first to allow the municipal council to expropriate any land or home in order to construct streets, cross streets, or any building that it judged con­ veniente for the public good. Franca’s version also allowed expropriation for the construction of public plazas.28 Building appearances were regulated to ensure uniformity, cleanliness, and elegance. Each municipality established the proper height of buildings, the height and width of windows facing the street, and permissible building materials in order to control the appearance of the settlement.

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Several codes required symmetry in street-facing doorways and windows. Homeowners were not allowed to construct windows on side walls that might inconvenience neighbors by violating their privacy. Buildings out of compliance with the height requirement had to have their façade built up to conform to the established standard. São Carlos’s council understood that some of the urban space had been built before São Carlos had become a municipality, and therefore did not conform to the legal height requirements. However, the council’s 1886 posturas required old buildings undergoing roof renovations to conform to the current height regulations.29 This preference for uniformity was relaxed toward the end of the nineteenth century in Amparo, whose 1883 posturas allowed for modern architecture. “The houses built from now on in the city may be made in accordance with the taste and architecture of modern constructions,” as long as they did not deviate from the prescribed building heights, height and width dimensions for doors and windows, and embellishments such as porches, balconies, and gates.30 Ribeirão Preto assured its property owners in 1889 that the municipal council did not have the right to regulate architectural form, so long as the buildings were within the “general proportions of the plan,” such as height requirements and a symmetrical appearance in window and door placement.31 Regulations that for decades required property owners to keep their home and perimeter walls whitewashed and their windows painted now recognized that modern construction materials sometimes rendered whitewash an inappropriate choice. While most municipalities in the 1880s required building owners to apply a fresh coat every two years or so to buildings of old construction, homes constructed of marble, stone, brick, “or any of the other materials adopted in the modern constructions” were exempted from this rule.32 Municipal councils worried about the impact of disorder and blight on the appearance of their urban spaces. In Araraquara, graffiti was prohibited “on walls and doors, either indecent dísticos or obscene paintings.”33 Its 1889 posturas imposed fines for all graffiti, but the fine for obscene graffiti was four times that of inoffensive but unsightly marks. An exception to the graffiti law was made for “the announcements that artists, businesses, professionals, etc. tend to place on the front of stores, workshops, etc.”34 It was illegal in Amparo to “write or paint indecent things on the walls and doors,” just as it was prohibited to display in windows or on shelves, or in any other place, “lascivious and obscene paintings and drawings that offend good customs.”35 Franca and São Carlos also prohibited

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graffiti of any kind on walls, doors, and other public surfaces. In 1884, Rio Claro made it a crime to damage the walls and windows or any part of the internal or external ornamentation of buildings.36 Builders in 1846 Rio Claro that did not seek the proper permit risked being out of alignment with the city plan, and buildings found to be so were demolished and their owners prohibited from rebuilding. Illegal constructions— structures built without any permit— were also torn down.37 In 1883, Amparo required those constructing a building to complete it within a reasonable period of time as determined by the council. If they failed to comply, they risked fines and jail time. In many of the municipalities, lots that were acquired and left vacant could be seized by municipal authorities.38 Many municipalities required buildings in ruinous state to be repaired or demolished. The Ideal Function If the ideal urban space reflected order, uniformity, and elegance, the functions it served were messy, chaotic, and sometimes dangerous. Animals, vehicles, and people shared the streets. Insects, trash, and disease threatened water purity and the food supply, causing illness and even death. These elements of urban life inspired ordinances to contain and control them while promoting the smooth functioning of municipal life. One of the greatest preoccupations of municipal administrators was the interaction between animals and people in the streets of urban settlements. Animals were kept in the municipality for transportation, food, and security, which necessitated their travel along the same roads as their owners and consumers, so keeping control of them was of the greatest concern. Municipalities allowed animals like dogs and milk goats within the urban perimeter so long as they were licensed or kept on a leash; most prohibited cows, sheep, goats, and dogs from wandering loose in the streets; and nearly all had specific regulations regarding pigs. Animal owners who violated these rules either were assessed a fine or had their animals seized and sold at auction if they had any value or put down if they did not. Even when animals were sanctioned and controlled, they still posed a potential threat to people and vehicles. Galloping a horse was not permitted in Araraquara, Franca, Ribeirão Preto, Rio Claro, or São Carlos.39 Araraquara, Rio Claro, and Ribeirão Preto did not allow horses to be tethered in front of the doors of private homes for fear of impeding traf-

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fic, while São Carlos prohibited tethering animals to decorative trees or to light posts, an indication of the rural nature of these newly urbanized spaces.40 Troops of animals had to be conducted down the center of the street at a moderate pace in São Carlos, while Araraquara required that animal herds pass through the streets only at the edge of town. Ribeirão Preto prohibited herders from bringing livestock for sale into the streets and plazas of the city.41 The particular regulations of each municipality, and the differences between them, suggest that animal drovers either came in from the immediate hinterland or had encyclopedic knowledge of permissible paths through neighboring municipalities. As urban spaces developed from their rural beginnings, new ordinances came into effect to enact strict regulations on vehicles. Most of these were intended to avoid disaster and minimize damage to physical infrastructure like roads and canals. They grew in number and complexity over time as vehicles increased in number and sophistication. Ribeirão Preto’s 1889 ordinances illustrate how prevalent vehicles had become near the end of the nineteenth century. Its posturas prohibited driving on sidewalks, parking two or more carts in the same place on the street, and vehicles operating at faster than a walking pace. When two vehicles met from opposite directions, the posturas stipulated that they should pass on the right. It was a violation to make a U-turn (virar sobre si) in the streets and plazas of the city, not to prevent an accident but to prevent damage to the pavement: “When any car descends a street, it may not then go up the same without having passed on another [street] in order to turn naturally, so as not to ruin the macadam.”42 Franca passed an ordinance in 1889 stating that vehicles should have a lighted lantern on their right side, and that drivers of cars, carts, wagons, trolleys, or any other vehicle shall overtake other vehicles on the left. These drivers, who were to be at least fifteen years of age, were not allowed to travel at a speed above a trot in the city, were not allowed to leave their vehicles, and were to always be decently dressed and wearing shoes. At corners, they had to slow down to walking speed for reasons of safety.43 Although animals and vehicles could threaten municipal residents with physical harm, the water and food supplies harbored threats to residents’ health. Therefore, an important concern among municipal councils was the preservation of the quality of water and food. With ordinances, they sought to protect the purity of water as it made its way to the settlements, and to maintain its quality at the chafarizes, public fountains that served as delivery points around the cities. Before piped water, public water trav-

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eled in a glorified ditch from its distant source to these urban fountains. Some ordinances admonished municipal residents outside the city to refrain from polluting the water or diverting it for their private use without permission from the municipal council.44 In São Carlos, it was illegal to raise pigs upstream from the city to prevent their polluting the water.45 Araraquara made upstream pig-tending illegal, whether the water was potable or not; its councilors feared that the water sources might mingle, one contaminating the other.46 Trash near water sources was similarly a concern. Most posturas included requirements that the canals carrying potable water from spring to fountain be clear of trash and debris, and that people be prohibited from diverting the water, bathing in it, or throwing objects into it. People selling water in the streets in pipas, or casks, had to treat these with all cleanliness and submit them for monthly examination. Bathing and laundering in public fountains was absolutely prohibited. Dirtying public fountains and waterways carried the penalty of a fine and, in some cases, community service.47 Finally, protecting the integrity of the fountains themselves was of the utmost importance. Araraquara stipulated that “one could not remove water from public fountains by hanging buckets or any other manner that ruins the taps; nor rip out the taps of the fountains nor remove water from the chafarizes, without need, in order to spill it on the ground or do any other damage.”48 Franca outlawed bad water manners, such as fouling or wasting water, engaging in fights at the public fountains, or damaging their infrastructure.49 Municipal councils also sought to protect the quality of the food supply. Some, like Araraquara’s, prohibited the use of unclean containers to sell food, or the use of additives in food and drink production to falsify or corrupt the product’s healthfulness.50 Amparo prohibited falsifying goods offered for sale or selling spoiled goods. Bread bakers were singled out for using powders other than wheat flour that might be harmful to the public health.51 The strictest regulations, at least on paper, regarded the safety of the meat supply. Although São Paulo’s climate is more temperate than the northern regions of the country, its heat and humidity combined with the absence of refrigeration caused meat to spoil quickly. Consequently, hygiene in both the slaughter of livestock and the sale of their meat was crucial, and municipalities imposed many practices to enforce it.52 All livestock slaughtered for public consumption was to be examined by the city inspector, who looked for thin or sickly animals and made notes in his journal.53 Those head to be slaughtered at the public abattoir had to ar-

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rive on the eve and be held in the public pasture so that the city inspector could verify their health. If an animal was found to be sick after slaughter, the owner had to bury it outside the city immediately. It was imperative that the slaughterhouse be kept hygienic through daily cleaning to remove blood, garbage, and other filth; that the vehicles transporting the meat remain “perfectly clean”; that meat for public consumption be sold only at licensed butcher shops; that those shops be kept perfectly clean, including the instruments used by the butcher; and that meat should not be sold once there was any sign of deterioration.54 Despite these safeguards, people fell ill. Whether they became sick from tainted food and water or from transmissible diseases, one of the many messy aspects of urban life that municipal councils had to foresee was the sickness and death of residents. Through food and water provisions, they sought to minimize such incidences, but preventative measures like vaccinations and quarantines could also curb the spread of illness. Mandatory inoculation against smallpox became a municipal responsibility as early as 1838 and remained a municipal ordinance thereafter.55 All persons not already exposed were required to present themselves on certain days and times to be inoculated with the live smallpox pus vaccine. Fathers and slave owners were responsible for the vaccination of their dependents. Those receiving the vaccination were required to report back eight days later for an examination to verify its effect, which was done by extracting pus for testing. In addition, the vaccinator reported vaccine dodgers to the council’s procurador, who levied fines for noncompliance. Another measure for curbing the spread of illness was the isolation of lepers. They were not allowed to beg in the streets, plazas, or roads of the municipality. If caught in this activity, city inspectors took compliant lepers to the hospital and recalcitrant lepers to jail. Those hospitalized who later returned to begging were jailed, with the sentence doubling for each occurrence. Leprous slaves were the responsibility of their owners, who were required by municipal ordinance to provide the medical attention necessary for their survival or send them to the hospital and pay for their treatment. When slaves were found to be sick with other maladies, it became their master’s obligation to either keep them isolated and care for them or send them to the hospital, with the master paying the expenses. Illness in any house required that a black flag be raised to warn other residents. For those who succumbed to disease or simply to the inevitability of

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death, hygienic burial was essential. The proper burial of the dead is the first public health ordinance in Franca’s 1850 posturas, which reveals that it was a major concern among municipal leaders.56 It remained a central preoccupation across the century as Franca sought to bring order to practices long directed by custom and faith. Before the municipalization of cemeteries, the established practice was to bury the dead in churches. Municipal councils now required that the bodies of unfortunate souls who died of contagious diseases be transported in hermetically sealed coffins to cemeteries that, in Franca as in the other municipalities, were situated in council-approved locations beyond the urban settlement. These designated cemeteries gave the council control over burial practices. It became a violation of the law to bury the dead outside of them. The Ideal Society An important element of posturas was the way they regulated proper interactions among the municipal residents. These ordinances were intended to minimize conflict and uphold decency, thereby maintaining a peaceful and harmonious environment. Provisions dictated the proper use of weapons, restrictions on noise, appropriate forms of leisure, and a variety of constraints on slaves in public places. As was the case with all municipal codes, these ordinances were more about prohibiting offense than defining propriety, but through their specific provisions we can construct the manner in which municipal administrators viewed the ideal society. The municipal codes regulated weapons to curtail conflict and violence within the settlements. In Rio Claro, the use of weapons from guns to knives was illegal except by soldiers, though exceptions were made for certain professions. For example, mule drivers were allowed to possess knives, hunters could bear rifles and knives, firewood collectors were allowed their axes, barbers could keep their shears and razors, and police officers retained whatever weapons they required.57 The right to bear arms did not extend to the right to use arms in public. Ribeirão Preto prohibited firing shots day or night in the streets and plazas of the city without a good motive. Discharging a firearm also was not allowed in Rio Claro’s urban settlements.58 In Franca, individuals could keep weapons in their home as long as their purpose was not criminal or seditious.59 All municipalities had provisions regulating noise to reduce the agitation it stirred up. Citizens were guilty of disturbing the public peace

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if caught shouting or talking loudly in the streets, plazas, taverns, bars, and “suspect houses” after curfew.60 Businesses had to close at curfew, which for Franca and Ribeirão Preto was 10:00 p.m. during the summer and 9:00 p.m. in the winter.61 Loitering at night, even before curfew, was not permitted in Franca.62 Rio Claro prohibited disturbances of the peace after curfew, while Franca outlawed tumult, shouting, and loud voices— whether in the streets or in businesses or private homes— day or night.63 If Francana voices were raised in insult, the punishment was doubled from five milréis to ten and from two days in jail to four. In fact, shouting on purpose was against the law, unless the individual was in fear or in need. Nor were swearing or lewd gestures allowed in public.64 Araraquara specifically targeted noisy students, prohibiting shouting and hollering in public and private schools. A five-milréis fine could be assessed to the professor or the school director (presumably for failing to keep the noisy student in line). The municipal council also had no tolerance for the noisy believer, making it an offense “to sing or pray in loud voices.”65 Amparo prohibited loud noises that disturbed the public peace during the quiet hours after curfew; raised voices, a noisy bodily gesture, or a loudly blown nose could result in a twenty-milréis fine.66 Some of these ordinances were intended to maintain decorum, but others were crafted to contain the disorder caused by drinking and popular forms of entertainment. Araraquara’s 1872 ordinances stipulated that no tavern owner or purveyor of drink (negociante de molhados) should allow shouting, loud voices, or gatherings of slaves with the intent to become drunk in their businesses or shops.67 Rio Claro made it illegal for innkeepers to sell drinks to known alcoholics. São Carlos made it a crime to sell alcoholic beverages to drunk people.68 In Franca’s 1882 ordinances, drunks found in the streets and plazas were to be taken home and turned over to relatives. If the relatives did not accept them, they remained in custody until sober.69 In Ribeirão Preto, drunks promoting disorder or disturbing the peace in streets and plazas or any other public place were fined five milréis, or about a day laborer’s daily wage.70 That municipality also outlawed “tumultuous gatherings with loud clamoring and shouting in the streets and plazas of the city or in public and private houses” under penalty of fines.71 The ordinances detailed proper forms of public entertainment, some promoting wholesome activities, but most designed to outlaw undesirable diversions. From these posturas we learn the types of entertainment the community was likely to enjoy in São Carlos in the 1860s: jousting, tight-

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rope walking, masquerades, and roulette by day; opera, fireworks, and farces and other plays by night.72 Francanas enjoyed horse races, monkey grinders, fireworks, and plays in 1882, provided that these forms of entertainment were properly licensed, but their municipal council denied them bullfights or running of the bulls.73 In 1889, Franca permitted dramatic plays, equestrian displays, gymnastic and acrobatic displays, the plastic arts, and burlesque. In fact, the municipality had a separate section in its posturas for espectáculos, or shows. These seven articles determined which types of shows were permitted and what sort of license fee they would pay. Horse races were permitted on the roads outside the settlements, for instance, but strolling entertainers were not allowed.74 Ribeirão Preto was the only municipality to designate a specific space— the banks of its two main rivers— as areas for public entertainment.75 It was more common for municipalities to define leisure spaces by specifying where they were not allowed than by where they were. In the spirit of control and containment, unruly forms of entertainment that had the potential to offend or get out of hand were discouraged and even outlawed. Entrudo, the throwing of wax balls filled with perfumed water at people in both public and private spaces, was prohibited in the public squares and streets of many municipalities, as was selling the wax balls to potential participants.76 Franca and Ribeirão Preto dampened public celebration by outlawing costumes, except during the preLenten carnival festivals. Neither municipality allowed residents to be out in public at night with any type of clothing— a mask or a scarf— obscuring the face.77 Games, but not games of chance, were a permitted form of entertainment, but only in licensed establishments that protected community morality by excluding slaves and minors.78 Franca defined the legal games as billiards, ball games, lottery, backgammon, and hearts, voltarete,79 and other card games. But in 1889 it cautioned that even these games could not be played in the public streets and plazas of the city and the settlements of the municipality, nor could they be played on the countertops in places of business. This latter prohibition most likely came about because legal gaming establishments were licensed by the municipality; allowing unfettered play would undermine the council’s ability to collect its fees.80 The municipalities were especially concerned with the potential threats to order and decency represented by unsupervised slaves in the urban settlements, so control of them was the master’s responsibility. In Rio Claro, for example, slaves were prohibited from walking “practically

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naked” in the city under penalty of a fine imposed on their master.81 If a slave ran away and was caught by the police, the owner was similarly fined.82 Slaves found in the streets after curfew without a note from their master, or in taverns and bars taking part in drinking and games, would be jailed overnight. In some cases, masters had to pay a fine to get them out.83 Slaves in Campinas were not allowed to play games of chance. If caught, they faced a fifteen-milréis fine or ten lashes of the whip, their master’s choice. Free persons who gambled with slaves or allowed them into their home to gamble were subject to a thirty-milréis fine and eight days in jail.84 Batuques, rhythmic dances with drumming or other percussion usually associated with Afro-Brazilian culture, and other “vulgar” dances were prohibited unless the host had received a license.85 With the abolition of slavery in 1888, references to slaves were eliminated from the codes, but the behaviors still associated with them continued to be regulated to maintain social order. Ribeirão Preto outlawed batuque as well as cateretê, a rural type of line dance, altogether within the city. The penalty for transgressors was a stiff fine and prison: twenty milréis and five days for the host, five milréis and twenty-four hours for each dancer.86 The discrimination was clear in Araraquara, which outlawed “dancing, batuque, dances in streets and in suspect houses, bars etc.” without a license, although it did make an exception for “soirées held in hotels etc. in which families of serious and honest reputations take part.”87 Another threat to ideal social interactions in the eyes of the municipal leaders came from beggars and gypsies. These two groups appeared in the municipal ordinances starting in the 1880s, shortly before the abolition of slavery, and more than likely comprised former slaves. Franca’s 1889 posturas were the first to mention poor beggars. They were allowed to beg for alms so long as they were “recognized as poor” and registered with the police, who gave them a plaque marked C. M. for câmara municipal to wear around their neck.88 Gypsies also had to pay a tax if they wanted to settle, however briefly, within a municipality’s boundaries. No bands of gypsies, defined as a group of four or more people even if they were women or children, were allowed in Rio Claro unless they paid a tax of three hundred milréis, an exorbitant amount between ten and thirty times the value of an annual business license.89 Gypsies were prohibited from lingering in the municipality of Ribeirão Preto for more than twenty-four hours and had to camp at least one league from the settlement. Landowners allowing them to make camp on their land were required to inform the municipal inspector of the gypsies’ presence so that the fiscal could tell them

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to move along; noncompliance resulted in a twenty-milréis fine.90 In Araraquara, gypsies were not tolerated under any circumstances.91 The Ideal Economy In fulfilling one of their most important duties of those mandated in the 1828 law determining the responsibilities of municipal governance, municipal leaders promoted the economic development of their settlements. A strong economy was key, because taxes and fees on local commerce formed the municipalities’ revenue base. Common to all municipal ordinances, for example, was the requirement that all businesses selling or buying goods use weights and measures that were verified annually against the municipal council’s standard set. Noncompliance could result in fines or imprisonment. This provision predated the introduction of the metric system, but became common once municipalities invested in new weights and measures.92 Its intent was to protect the consumer against fraud, with the cost of annual verification paying the inspector’s salary. Another way municipalities protected the consumer (while keeping its coffers fed) was by requiring all businesses to obtain licenses from the municipal council. These nominative and nontransferable licenses enabled municipal officials to inspect the merchant’s premises and ensure that the goods were authentic and not corrupted. Campinas required licensing of all merchants, no matter the nature of their wares.93 To obtain the license, business owners were required to show receipts verifying that they were current on all general, provincial, and municipal taxes. In 1889, Franca stipulated that the inspector, secretary, procurador, porteiro (doorkeeper), and aferidor, or the official who inspected and verified weights and measures throughout municipal businesses, were required to review every business in the city, in the settlements, and along the highways to verify that the licenses were in order and that weights and measures had been inspected and certified. Franca made it illegal to purchase gold, diamonds, silver, sugar, coffee, and other valuable objects from minors or suspicious persons without the authorization of their fathers or patrons.94 Such ordinances were designed to catch those who stole from their families or their masters. It was expressly illegal throughout the municipalities to buy anything from slaves unless they had a permit to sell, the exception being food sold by slaves on Sundays and saint’s days with their master’s permission. Because food security was critical to public health, the sale of food-

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stuffs and staples, whether in a store or out of a home, was regulated by the municipal council and required a license. São Carlos introduced detailed rules regulating the food supply in its 1886 code. These rules stated that in times of food shortage, the council could open a market to oversee the fair sale of goods. All sellers of foods considered “primary necessity,” like beans, rice, corn, potatoes, flour, cornmeal, sugar, bacon, chickens, eggs, and other goods, were obligated to spend at least four hours in this municipal market and sell their goods in small portions. Only then were they given permission to sell in the streets.95 An inspector appointed and paid by the council was stationed at the municipal market to hold sellers to the law. Amparo specified that foodstuffs “of primary necessity like beans, corn, rice, wheat, fowl, eggs, fish, meat and smoked meats, etc.” must be displayed in the market where they, too, could be sold only in small portions. Anyone disrupting the flow of these goods for sale to the public was subject to a fifteen-milréis fine and jailed for twenty-four hours. Anyone who sold spoiled goods of any type (except meat, which was regulated separately) was also subject to a stiff fine.96 Campinas prohibited the sale of sugar, smoked meat, and cheeses along the roads and in the city without the seller’s having received permission from the market inspector. Franca prohibited exposing sugar, salt, coffee, leather, and meat to the sun in public spaces so as to not interrupt traffic or compromise public cleanliness (asseio).97 Municipal ordinances in the Empire of Brazil were developed by and unique to each municipality. Even as they shared many similar concerns about the social and economic interactions of the Brazilians within their districts, they reveal a high degree of local responsiveness to local needs. The founding documents of the empire placed the municipality in a subordinate position in the administrative structure of the Brazilian state, but it was the municipal councils that determined the specific contours of daily life. The local ordinances they created shaped the everyday interactions between Brazilians in the social and economic realms, and were the primary way most Brazilians interacted with the state.

The Rise of the Republic For most of the nineteenth century, the municipality existed in the political imagination as a lost possibility for a democratic utopia that had been sacrificed by the centralizing forces of the Empire of Brazil— or so the liberal

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and republican political actors bemoaned. This situation was remedied by the republican coup of 1889 that asserted municipal autonomy as a fundamental principle of the reborn nation. On January 15, 1890, exactly two months after the declaration of the republic, the São Paulo state president issued a stirring preamble to a decree that seemingly emancipated the municipality from the provincial oversight put in place with the Additional Act of 1834: Considering that the administrative tutelage exercised over the municipalities during the last half century has only produced weakness and poverty in its village economies; considering the urgent need to emancipate the municipalities, trusting them with the ability to take care of their own business . . . ; considering that only the decentralization, by the establishment of municipal autonomy, will awaken local energies, give impulse to public life and expand the latent power of the State; considering the need to guarantee the inestimable benefits of the institution of municipal autonomy . . . declares:98

The ensuing declaration specified the host of rights and responsibilities that now rested with municipal administration: setting tax codes and creating new sources of income; budgeting revenues and expenditures; collecting revenue; contracting loans; funding and executing all municipal works; expropriating property for the good of municipal economic development; taking control of the entire political and economic administration of the municipality, including the peace, security, comfort, and health of its inhabitants; revising, revoking, or replacing its municipal ordinances and creating new ones, except where new ordinances would harm the interests of the municipality, the state, or the nation; suppressing some municipal jobs, creating new ones, and establishing their salaries, all while holding the power to appoint and dismiss employees. Of all these rights and responsibilities, only two novelties emerged with this decree. The first was a provision establishing the right of local authorities to create or eliminate municipal positions and control their pay. Recall that under the empire, some of these positions were filled by persons nominated by provincial authorities. The second novelty was the new right of the municipality to raise loans to supplement its financial resources, but this essentially was a nod to a practice that had been growing during the late empire. Municipal loans had been prohibited under imperial law, though exceptions were allowed with provincial legislative assembly approval. These had become more common during the 1880s.

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Like the remainder of the “new” autonomous rights, this one simply eliminated the old provincial review requirement. And allowing councils to draft their ordinances without oversight gave them the legislative role they had formally lacked but informally practiced under the empire. Thus, the emancipation declaration codified municipal practices that had been in place since the beginning of the empire while eliminating efficiencykilling bureaucratic oversight. These rights and responsibilities declared by São Paulo’s state president, Prudente de Moraes Barros (soon to be Brazil’s president, 1894– 98), were enshrined in the new Brazilian constitution published the following year. The 1891 republican constitution introduced the type of hands-off federalism that the nineteenth-century reformers demanded, including municipal emancipation from provincial oversight: “The states will organize themselves in such a way that the autonomy of the municipalities is assured in all respects to their particular interests.”99 This article was in keeping with the spirit of republicanism, which devolved most administrative matters to the states.100 Municipal councils, for their part, were transformed from administrative to legislative bodies given the power to shape municipal governance to best suit local conditions. That same year, the State of São Paulo passed its own constitution, which established the basic outlines of municipal composition, administration, rights, and responsibilities; the specifics were detailed in the subsequent law of the municipality. São Paulo’s constitution maintained the state’s existing territorial division into municipalities and forbade their subdivision into units of less than fifty square kilometers and ten thousand inhabitants. In terms of municipal organization, it affirmed that all municipal offices would be elective. It guaranteed municipal voters (electors) the right to vote elected authorities out of office and to annul the deliberations of municipal authorities.101 Finally, it assured all municipalities the maximum degree of governmental autonomy and economic independence. Actions taken by municipal governments could be annulled only by their state legislature if these violated the federal constitution, offended the rights of other municipalities, or claimed excessive powers for the municipal government.102 Municipalities continued to be governed by unpaid municipal councilors elected by direct vote and simple majority for a three-year term. Because the câmara municipal now held legislative authority, the 1891 law created a new office of Intendência (Intendancy) to remove the executive functions from the council, effectively creating two branches of gov-

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ernment from one body. The council elected the intendant annually from among its own members, and charged him with carrying out its plans. Neither branch was administratively or politically subordinate to the other.103 In addition, the 1891 regulatory law was intended to limit the undue accumulation of power by prohibiting certain groups from holding office. These included judicial, military, and police authorities; government employees receiving compensation of any sort; retirees; municipal employees and the engineers and contractors engaged in public works projects either in progress or with their accounts not yet fully paid; and directors and managers of banks, companies, or firms that had contracts with the municipality. Family members and business partners were prohibited from serving together with their relative or associate.104 This governing body went virtually unchanged for the duration of the republic. A brief flirtation with innovation occurred in 1906 with the introduction of direct elections for the office of mayor— the new title for the intendant— along with longer terms for mayors (doubled from one year to two years) and councilors (extended from three years to four years), but these innovations were quickly reversed. A subsequent law passed in 1907 returned the election of the mayor to the council and reinstated the one-year and three-year terms for mayors and council members, respectively. Councilors continued to serve gratis, although the mayor received a small stipend, presumably in compensation for the greater burden of responsibilities relative to his councilor peers.105 The only real change from the empire years was the elimination of the state-controlled patronage appointments— mayor, submayor, fiscal agent, and so on— in keeping with the autonomous governance of the republic. These positions still existed, and most likely were filled through local patronage, but they were no longer imposed from outside. The autonomy of the municipality in the republic mattered primarily in the elimination of state oversight and in the creation of legislative responsibilities at the local level. The mandated responsibilities, however, remained the same. Their newfound autonomy did allow the municipalities to begin to offer primary public education as a supplement to staterun schools. Firefighting was also now an articulated responsibility, but hardly a novel one. Responsibility for telecommunications was new as well, as was the technology that enabled it. In all substantive matters regarding the role of the municipality in the life of the Brazilian citizen, the municipal mandate of 1828 was reiterated and codified in the laws of the republic, which endured until the 1930 revolution. From the founding of

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the empire in 1822 to the end of the republic in 1930, then, the municipality was responsible for providing public services.

The Municipal Ideal in Republican São Paulo Legislative authority was granted to the local governments in the republic, giving them the autonomy nineteenth-century reformers had clamored for, yet this change eliminated the state as the central repository of legal codes. As a result, published municipal codes become rarer, because they were now written, published, and stored locally with varying degrees of preservation. The posturas of Rio Claro, published in 1893 and 1923, and Ribeirão Preto, published in 1902 and 1921, still survive from this period, however, and show how ordinances changed over time in structure and content, as well as how municipalities maintained their unique concerns.106 Municipalities continued to regulate street alignment, building codes, public markets and slaughterhouses, vehicles, rainwater abatement, insect abatement, trash and other impediments in the streets, animals, noise and nuisance, hygiene, food safety, cemeteries, curfew, gambling, graffiti, weapons, and so on. As this section will demonstrate, the republican posturas were broadened, amplified, and modified to reflect the times, but they represented more continuity than change in how the municipal councils defined their ideals of structure, form, and engagement. The first noteworthy detail is the posturas’ expansion in length and structure, both between municipalities and across time (table 2.4). Rio Claro’s posturas, which had grown from just over two hundred articles in 1884 to almost three hundred articles in 1893, doubled in length by 1923. The chapters that organized the code became far more specific and targeted in their content. Regulation of the sanitary service was separated out from the older catchall category of hygiene and public health to lay the groundwork for a new department of municipal health. This section established the rights and responsibilities of the eventual department. The chapter on water and sewer regulation was a reproduction of the municipality’s contract with the service provider, the Empreza de Águas e Exgottos, signed in 1909. The chapter on animals and woodlands introduced a number of measures to protect wildlife and curb animal cruelty. Finally, the greatest novelty of the 1923 code was the creation of a specific set of education ordinances. With these ordinances, Rio Claro codified its growing participation in primary public education.

Rural plots and fencing Sanitary service regulation Water and sewer regulation Building code Industry, commerce, and professions Vehicles Animals and woodlands Municipal schools Municipal council (composition, rules of order, officers, etc.) Slaughterhouse Market Cemetery Taxes

Commerce and industry

Taxes Municipal employees General dispositions

Streets and buildings Commerce, industry, and professions Public security (includes roads and highways) Public behavior, comfort, and entertainment Hygiene (includes market, cemetery, and slaughterhouse) General dispositions

Commerce and industry Public security (includes roads and highways) Public behavior, comfort, and entertainment Hygiene (includes market, cemetery, and slaughterhouse) General dispositions

429

1921

Building code

352

Source: Elaborated by the author from municipal posturas for Rio Claro, 1893 and 1923; Ribeirao Preto, 1902 and 1921.

District boundaries, municipal administration Police, security, and public morality Highways and roads

City boundaries, street alignment, leveling, building, and paving Police, security, and public morality Cleanliness, hygiene, and public health Highways, roads, and agriculture

Chapter titles

597

297

No. articles

1902

1893

1923

Ribeirão Preto

Rio Claro

table 2.4 Comparative structure of municipal codes in the republic

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Ribeirão Preto’s ordinances, in contrast, were virtually identical in structure to one another in 1902 and 1921, and not at all similar to Rio Claro’s. The major organizational shift had already taken place sometime between 1889, when its structure was similar to Araraquara’s code, and 1902 (see table 2.1). The expansion in number of ordinances came during this time as well: Ribeirão Preto’s 1889 posturas, at 185 articles long, almost doubled by 1902. As during the empire years, there clearly was no superimposed or standard model for posturas’ composition. The contents of these posturas include elements similar to those of the empire period and also between the two municipalities, but they show change over time and distinctions between municipalities as well. The most important driver of change was the need to accommodate new technologies and expanding populations, particularly in the urbanization codes. Telegraph poles appeared in these ordinances, to accommodate this advance in communications. Taipa, the packed-earth construction technique dating to the colonial era, and other temporary types of building techniques and materials were now prohibited as more permanent solutions, like brick and cement, were introduced. For the first time, Rio Claro’s streets, avenues, and plazas were to be graded to have their highest elevation in the central part, presumably for drainage, because the code also called for lateral gutters. New construction or renovated buildings were now required to have pipes inside their walls and under the sidewalks to channel rainwater from roofs to the streets’ gutters. Similar pipes were required to pass beneath the sidewalk to drain water from backyards to the street. While much of the urban footprint had been established, making expansion difficult, new streets were required to be substantially wider than the original ones, a nod to the proliferation of vehicles transiting the city by the end of the nineteenth century.107 Today’s visitor to Rio Claro can attest to the very narrow streets in the central district, all of which have been designated as one-way to accommodate vehicles. Rising urbanization rates caused Rio Claro’s 1893 ordinances to distinguish between urban and suburban space for the first time.108 They defined the central urban district as falling within specific boundaries (Avenues 9 through 12 and Streets 1 through 9), but also by virtue of its having street gutters already installed or a plan in place to install them. The urban area, by law, had to be planned by the municipality. Buildings within the city perimeter were now required to have gables or cornices made of wooden planking to hide the front face of the roof; the wall cornices could be made of brick or artificial or natural stones. As in older posturas, doors and win-

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dows had to be symmetrical in appearance and conform to minimum heights to standardize appearances. Buildings, too, had minimum heights. Any construction, from new building or renovation to erecting a simple wall along the street, still required alignment and leveling by the city planner, who still earned a commission for his work. Moreover, the orderly urbanization through street planning and alignment now extended to suburban districts. By the turn of the century, urbanization codes had grown quite complex. Ribeirão Preto’s 1902 ordinances went into never-before-seen detail on the building materials to be utilized in every aspect of construction. Not only did it outlaw taipa, as Rio Claro had done, it specified materials and dimensions of foundations, thresholds, flooring, basements, window sills, shutters, gates, and so on. The proper appearance and placement of the plaques bearing street names and building numbers were now part of municipal ordinances. Acknowledging the inevitability of growth driven by the influx of immigrants imported to provide labor for the burgeoning local economy, buildings were now to be renumbered in three-year intervals. One of the most interesting details in the 1902 code was the requirement that all building plans be written in Portuguese, another indication of the growing immigrant populations in this municipality. The major difference between imperial and republican posturas was in the way the republic regulated growth of the urban space as the twentiethcentury population boomed through immigration, migration, and natural increase. Rio Claro’s population almost tripled from 1886 to 1934, while Ribeirão Preto’s grew eightfold. The seven municipalities in this study, all of which had populations between 10,000 and 20,000 at the end of the empire (with the exception of the much larger Campinas) grew to between 40,000 and 80,000 by the end of the republic (see table 2.3). In fact, the rapid influx of immigrants— with the attendant complexity of businesses to serve them— complicated the construction picture and created additional oversight to urbanization. These seven municipalities absorbed 23% of all immigrants to the state of São Paulo in the first decade of the twentieth century; Ribeirão Preto alone received 9%.109 Ribeirão Preto’s 1902 code, which covered nearly 60,000 inhabitants compared with just 10,000 when the 1889 code was created, now regulated multiperson or multifamily dwellings, defined as “hotels, inns, boarding houses, workers villages, asylums, boarding schools, hospitals, health posts [casas de saúde], etc.”110 This code expressly forbade the construction of tenements (esta­ lagens or cortiços), and mandated that multifamily dwellings provide a

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latrine and bathroom for every twenty people.111 In all dwellings, special regulations regarding light, air, and finishing materials pertained specifically to kitchens and bathrooms to maintain hygiene. Because of buildings’ increasing density of occupation and use, safety became an important and explicit consideration in their codes. Ribeirão Preto’s 1902 posturas stipulated that the use of wood as a building material for theaters and other types of public gathering places was to be “avoided whenever possible,” and doors were to swing outward or to revolve in order to permit “prompt and easy exit for the public.” The codes also required straight stairways and wide hallways to preserve public safety.112 From 1902 onward, inspections were mandatory before any structure could be occupied. In the nineteenth century, the responsibility for fire safety in most municipalities had fallen to the residents themselves, who were to sound the alarm in case of fire and allow access to water sources on their property to combat the flames. But fire safety was added to the list of mandated municipal services in the 1891 constitution, and became a new and growing concern in municipalities as their urban spaces grew. Rio Claro introduced a new rule in 1893 requiring itinerant water sellers to go directly to the site of a fire to help put it out, while Ribeirão Preto’s 1902 ordinances prosecuted those who falsely sounded the alarm.113 Increasingly, municipalities took on the responsibility for firefighting, and by 1921 Ribeirão Preto’s ordinances regulated the corpo de bombeiros, a firefighting unit paid for by the municipality.114 The new posturas for mitigating potential violence and bodily harm were nearly identical to earlier posturas, including those regarding explosives, weapons, vehicle safety, rules of the road, animal transit, animal discipline, and loose animals, including livestock and dogs. The population explosion, however, added more complexity to regulations about the way animals, vehicles, and people shared the streets. In 1893, Rio Claro adopted vehicle ordinances indicating the new technologies lining its urban streets: these stipulated that the owners of vehicles causing damage to trees or telephone, telegraph, or light posts were to be fined ten milréis and held responsible for repairing the damage.115 Its vehicle regulations ballooned from nine articles in 1893 to forty-three articles in the 1923 code, which now covered rules of the road, drivers’ qualifications, and etiquette, and regulated parking on Rio Claro’s city streets. This expansion of vehicle ordinances suggests that traffic had grown substantially in the intervening thirty years.116 If vehicles were more prevalent now, regulations directed at oxcarts

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and the proper gait of horses within the urban area tell us that animals continued to figure prominently in the circulation of goods, people, and services as beasts of burden, modes of transportation, sources of food, and domesticated pets.117 New regulations on animal cruelty also figured in these posturas. Animals’ masters were prohibited from maltreating them, and were required to provide regular food and water. In something akin to an earmark, Rio Claro’s 1923 code stipulated that the fines for maltreatment were to be used for “the acquisition and installation of public drinking fountains for animals . . . at various points of the city where vehicles agglomerate.”118 To uphold public decency and maintain order, municipal leaders continued to legislate the proper behavior of their citizens, especially the free poor that inundated urban centers after the abolition of slavery. In addition to long-standing rules covering begging, public drunkenness, and other offenses to public morality, Rio Claro outlawed vagabundagem, or vagrancy, in 1893.119 The municipality required anyone without an occupation and in a state of vagrancy to appear before the police. It also outlawed fortune-telling and reiterated its intolerance for gypsies. In 1902, Ribeirão Preto introduced regulations upholding decency and morality in public spaces, which required people to be clothed and to refrain from using obscene or injurious language or engaging in “acts that are offensive to morale and good customs.”120 This code also brought civility to the theater: ticket sales could not exceed the number of seats, scalping was prohibited, and spectators were required to comport themselves with “all order, respect, decency, and the necessary silence” during a performance. This posturas was the only one of the four surviving codes that regulated meretrizes, or prostitutes. It did not outlaw the profession, but rather forbade prostitutes from offending the public morality through their words, gestures, or appearance.121 While most changes to the posturas reflected municipal councils’ attempts to account for population growth and intensified urbanization, one important area of innovation appeared in the republic: the introduction of municipal public education. Public education had been the state’s responsibility, so its absence from these four municipal codes before Rio Claro’s 1923 posturas is unsurprising. We know from other sources like mayoral reports that municipal schools already existed in these municipalities, in response to citizen demand. (Public education is discussed in chapter 7.) But Rio Claro’s 1923 posturas formally codified municipal responsibility for the provision of public education in the contract between

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it and its citizens. The municipality declared that boys and girls between the ages of seven and fourteen years were entitled to four years of education. Formally establishing public education as a local responsibility at a time when education was the legal responsibility of the state signifies that state-provided education was inadequate to meet demand, and that municipal leaders were willing to step up and embrace a broadened set of responsibilities to invest in the public good during the first decades of the twentieth century.122

Conclusion The municipality’s place in the lives of Brazilians was set by the founding documents of the 1820s, was reiterated in the 1891 constitution after the fall of the empire, and endured until the Revolution of 1930. The mandate initiated the expectation of meaningful investment in municipal infrastructure and services for Brazilian citizens at independence, an expectation that endured for more than a century. Because the municipalities were small in the nineteenth century and because they were ubiquitous— every Brazilian, slave or free, resided in one and was bound by its laws— they constituted the fundamental base of the newly independent Brazilian state. For most Brazilians, the municipality was their first and possibly only contact with the state. The way they lived their lives, conducted their business, moved through their day, and interacted with their neighbors was all administered at the local level through posturas intended to anticipate needs and correct concerns. These posturas reflected a set of ideals behind those interactions, written, revised, and molded to keep the peace, promote prosperity, and enhance the quality of life of the Brazilian population. Legally, the municipality was subordinate to provincial authority in the empire, gaining its autonomy only in the republic. This subordination had real, negative, and lasting ramifications for the municipality’s ability to fulfill its mandate, as we will see in subsequent chapters. There is no indication that provincial or general government officials formally adopted a “local authorities know best” approach to governance, particularly in light of the extensive oversight of municipal affairs by provincial legislative assembly committees. Municipal authorities could suggest ordinances to the provincial legislators, but it was up to the assembly to determine which ordinances stood and in what form. Yet it is also evident that no standard

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set of municipal ordinances was imposed on these municipalities. The two sides of posturas from the imperial era— one reflecting a broad set of shared responsibilities, the other intimately responsive to local characteristics and conditions— show us that municipal governance enjoyed some autonomy within the highly centralized structure of imperial politics. These two sides continued to be evident in the republic when the Brazilian state adopted a federalist structure, and real legislative power was returned to municipal councils in this nationwide experiment with political decentralization. Municipal administrators addressed the issues concerning the quality of life in their municipality by editing, amending, and expanding the ordinances regulating social, cultural, and economic interactions. The variances between municipalities, seen when comparing municipalities and studying their evolution, are the best evidence of these revisions. Municipal autonomy came to an end in 1930, when supporters of Getúlio Vargas overthrew the (probably fraudulently) elected government of republican leader Washington Luís in an October coup d’état.123 The provisional government issued a decree on November 11, 1930, that dissolved all elected bodies and placed interventors in each state and municipality, recentralizing the national political apparatus in a manner reminiscent of the empire. In the chapters that follow, we consider the financial history of Brazilian municipalities as they unfolded between the cardinal points of independence and revolution to understand how the shift from political centralization to local autonomy shaped a century of public finance and the provision of public goods in Brazil.

chapter three

The Fiscal State Expressive signs of what made them poor, were not wanting; the tax for the state, the tax for the church, the tax for the lord, tax local and tax general, were to be paid here and to be paid there, according to solemn inscription in the little village, until the wonder was, that there was any village left unswallowed. — Charles Dickens, A Tale of Two Cities1

W

hile traveling through São Paulo in the early decades of the nineteenth century, French traveler Auguste de Saint-Hilare came to a bridge across the Atibaia River. A gate blocked the entrance to the bridge, which required a toll in order to pass. People on foot paid 40 réis, those on horseback paid 120 réis, and those in an oxcart paid 1,200 réis. No fewer than five river crossings demanded tolls in the forty-five leagues Saint-Hilaire had just traveled, something he thought confounded all logic. The proliferation of tolls meant that producers from settlements located further from centers of consumption were heavily disadvantaged compared with settlements closer to those centers. Franca, for example, paid more in transport taxes to get goods to São Paulo than did Campinas, simply because of the fate of geography: Campinas merchants did not need to cross rivers to get to the capital. Saint-Hilaire was incredulous: “If a river crosses the road, it is essential to charge a toll because the toll increases the revenues of the public treasury. This is the only rationale that was made. It did not pass through the administration’s head that by behaving like this, it was harming the commerce and agriculture of distant regions.”2 He reflected in frustration, “Charging such high taxes, the administration could at least maintain the bridges in better state. But this is a subject that has little interest for you [the reader].”3 Saint-Hilaire’s analysis was correct on the first count. Charging the tolls was meant, in theory though not in practice, to pay for the mainte-

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nance of the bridge, yet created a burden for distant communities whose ability to compete was constrained by higher transportation costs. But he was wrong on the second count, supposing that the tax he witnessed held little interest for us. His observations about this river crossing opened up a discourse on the puzzling tax structure of the Brazilian state that gets to the heart of this study of municipal finance: the fiscal structure of the Brazilian state isolated hinterland municipalities that needed stimulus for their commerce to thrive, and needed their commerce to thrive in order to generate revenue to pay for essential public services. This chapter examines the financial burden placed on the municipality by the fiscal structure the Brazilian state. As discussed in chapter 2, the administrative structure of the Brazilian state was shaped by rise of the fiscal state, the nineteenth-century phenomenon of government intervention in public services. The fiscal state sought to improve quality of life and raise standards of living by investing in social overhead capital. Before the nineteenth century, governments extracted taxes mainly for the purposes of warfare or the protection of national sovereignty. The relationship between ruler and subject, regarding the former’s ability to extract revenue from the latter, was tenuous at best. The use of revenue for human capital improvement was largely unknown.4 During the nineteenth century, however, there was an important and fundamental shift from the tax state to the fiscal state. In the fiscal state, governments saw the opportunity to invest in the well-being of their citizens. This shift was due in part to the rise of representative governance: politicians could use government resources to improve standards of living, for which they received political support in return.5 The fiscal state also evolved to meet the demands of population growth, migration and emigration patterns, and urbanization that accompanied the spread of industrialization in western Europe and intensified rhythms of international trade worldwide.6 Social overhead capital in areas such as public health and hygiene, food safety, physical infrastructure, and education demanded the state’s increased presence in the provision of public goods. To satisfy these new demands, nascent fiscal regimes expanded their revenue bases and determined the allocation of revenue across national, state, and local governments. Research on the rise of the fiscal state shows a dramatic variance in national experiences. With the growth of industrialization in the nineteenth century, some nations took positive steps to allocate revenue sources to serve the public good. Others failed to implement modern fiscal regimes capable of satisfying the exigencies of the

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new liberal state. Positive steps included levying imposts on major sources of wealth— such as property and income— to create a broad tax base, determining which levels of government were responsible for which public goods, and channeling resources to match those responsibilities. England, the United States, and parts of modern-day Germany exemplify the successful transition to a modern fiscal state.7 Those failing to implement such regimes, such as Spain and Portugal, typically shied away from taxing wealth and income, relying instead on regressive indirect taxation or falling back on traditional external sources of revenue from colonialera trade. Brazil followed the second path. It established a century-long practice of relying on indirect taxes to pay for public goods. Revenue at all levels of government was generated through indirect taxes on the circulation of goods and services and on transfers of wealth. Direct taxes on income and property were not entertained until the twentieth century. The closest thing Brazil had to an income tax was a tax collected on inheritance and wealth transfers, while the only type of property tax was the décima ur­ bana, a 10% tax on the rental value of urban real estate. An 1883 government report defining revenue collection rights and practices at all levels of government acknowledged that direct taxation of property was not under consideration: “There is no such thing in actuality, for it would be one more burden on landowners. Only in some indeterminate future it may be substituted for the tax on exports.”8 Even after income and property taxes were introduced, they represented a tiny proportion of general revenue.9 Indirect taxes were attractive because they were easy to collect. Levied upon acts of consumption or transaction, they were assessed on those having the means to pay. Most acts of consumption or transaction were voluntary— purchasing a business license to engage in commercial or professional activities for personal gain, bringing animals to slaughter, moving products across state lines, selling slaves or receiving an inheritance, renting out property, developing a mineral vein, enrolling in an institution of higher education— which made the taxes and fees assessed on them a predictable cost to the person engaging in the transaction and easily collected by the government. Most of the taxes and fees collected throughout the nineteenth century were introduced by Dom João upon his arrival in Brazil in 1808 after fleeing Napoleon’s troops.10 His transactional levies were of the same type as had been collected in Portugal, and they suffered no significant alteration across the nineteenth century. In addition to extensive and almost exclusive reliance on indirect taxes,

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the fiscal structure of the Brazilian state disproportionately channeled public finance to the general government and deprived municipalities of resources needed to fulfill their extensive mandate. This was patently different from prosperous fiscal states, which saw investment in local public goods as essential to economic growth and development. At the end of the nineteenth century, municipal governments in the United States and Prussia were endowed with substantial and sometimes even majority shares of total public revenue. In the United States in 1902, municipal governments received 52% of all public revenue while the federal and state governments took 37% and 11%, respectively. In Prussia between 1869 and 1913, this municipal endowment ranged from 20 to 42%, in similar proportions to the Reich and the Prussian state. Brazil’s fiscal structure, however, deprived local governments of the resources to invest in public services. Municipalities claimed just 5% of public revenue by the end of the nineteenth century.11 Finally, because the resource base for local government came from the circulation of local people, goods, and services, the ability to make the investments that improve quality of life and standards of living varied from community to community. Wealthy communities with a robust local economy that was well integrated in their region through natural waterways, good roads and bridges, or rail lines were able to tax the commerce resulting from that integration, giving them a better fiscal basis to invest in roads and bridges, streets and sidewalks, water and sewer networks, disease eradication programs, lighting networks, schools, parks, and other public goods. Communities that were naturally isolated in the country’s hinterland or that were not close to the transport network found their circulation of goods and services— hence their ability to generate revenue— hindered, as Saint-Hilaire correctly predicted. This chapter raises three important questions concerning the fiscal structure of the Brazilian state and its impact on economic development. First, did indirect taxes fall disproportionately on the poor in that nation, as contemporary reports suggested? Second, did the unwillingness to entertain a property tax deprive the Brazilian nation of a source of funds for meaningful investment in social overhead capital? Third, how did the reliance on the local economy for revenue shape municipalities’ ability to raise revenue? This chapter shows that Brazil’s fiscal structure disproportionately burdened the poor by increasing the cost of all goods and services through indirect taxation. Brazil’s failure to tax property limited the state’s ability to invest in social overhead capital essential to public wel-

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fare, including education and health initiatives that modern research has tied to higher worker productivity, wages, and standards of living. Finally, reliance on the local economy produced vastly different revenue streams that, as we will see in chapters 5 through 7, resulted in different levels of investment in the public services capable of enhancing standards of living.

The Imperial Fiscal State During the empire (1822– 89), almost all public revenue was captured by the general government. The structure of the fiscal state took a decade or so to settle, but the division of finances between general, provincial, and municipal governments never wavered from this fundamental fact. Initially, control over public revenue went to the royal treasury and then to the Chamber of Deputies.12 Revenue generation, collection, and distribution to the provinces were determined in Rio de Janeiro under this centralized regime. As the logistical challenges and the need for dedicated revenue at each level of government became apparent, however, the central state experimented with a new structure. This occurred in 1832 through a budget law that was the first to allocate public revenue to general and provincial governments. It reserved some twenty-two categories of revenue for the use of the general government, and allocated “all the existing taxes not contained in the general revenue” to the provinces.13 In 1834, the Additional Act created provincial legislative assemblies and granted them control over provincial budgeting. Also, the act formalized the fiscal status of the third level of governance, making municipal authorities subordinate to the provincial legislative assembly. In this way, the provinces acquired control over municipal budgeting much as the general government had controlled provincial finance before 1834. While the 1832 budget law recorded the first formal articulation of general and provincial revenues, the budget law of 31 October 1835 clarified and specified this apportionment of public revenue.14 The 1835 budget law established taxes on the external sector as the principal source of revenue for the general government, including taxes on imports, exports, goods in transit, business conducted in the customhouse, and rates on anchorage and warehouses. The remaining taxes accruing to the central government were taxes on gold mining, revenue from diamond mining, and a variety of fines and fees.15 To the provinces went taxes and fees not explicitly claimed by the general government, leaving it to the provincial as-

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semblies to legislate their collection as they saw fit.16 The municipalities were accorded the revenue from leases on municipal property and fees and fines established in local ordinances. By 1835, the tributary structure that endured for the remainder of the empire— and, as we will see, for the republic as well— was set. The allocation of revenue among general, provincial, and municipal government levels privileged the first level, endowing it with 80% of all public revenue at the mid-nineteenth century. Seventeen percent flowed to provincial governments, and just three percent to municipal governments.17 By the end of empire, this allocation had softened only a little. In 1885, the general government captured more than three-quarters of all public revenue, with less than 20% going to the provincial governments and 5% to the municipal governments.18 At all three levels of governance, the principal feature of Brazilian public finance was a reliance on indirect taxation. The Trend in Imperial General Revenue The public revenue generated at each level of government paid for the mandated responsibilities laid out in the founding documents. Brazil’s general government relied predominantly on taxes on the international sector to fund the public sector, specifically taxes on imported goods for consumption. Of the four components of the general government’s ordinary revenue, taxes on imports contributed between one-half and twothirds. Taxes on exports comprised less than one-sixth of general revenue for most of the nineteenth century and fell to one-tenth by its end. The value of imports and exports was roughly equivalent, but ad valorem taxes on imported goods were multiple times the rates on exported goods. Import taxes were 17% ad valorem at their lowest and ran as high as 42% in some years, while taxes on exported products were usually around 7%, and only occasionally rose as high as 16% depending on the exigencies of macroeconomic policies.19 While rarely stated in government reports, the low taxes on exports were meant to keep this levy from rendering Brazilian products uncompetitive in the international market. In fact, export taxes were lowered whenever the fiscal picture allowed. The much higher rate made import taxes the single most important source of ordinary revenue across the empire. Interior (domestic) taxes were second in importance, export taxes were third, and maritime dispatches a distant fourth.20 Table 3.1 shows the trends in revenue generation by these four major categories reported annually by the Brazilian

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table 3.1 Ordinary revenues of the Brazilian government (nominal milréis, percentage of total) 1840/41

1856/57

1870/71

1880/81

1888/89

Imports Exports Interior Maritime dispatches

10,182,537 2,958,620 1,860,564 591,617

32,856,263 6,910,999 8,597,491 249,446

52,994,472 14,915,887 23,379,345 460,958

67,860,959 20,434,538 36,398,505 385,611

90,216,071 17,388,555 39,968,598 529,083

Total ordinary revenues

15,593,338

48,614,199

91,750,662

125,079,613

148,102,307

Imports Exports Interior Maritime dispatches

65.3 19.0 11.9 3.8

67.6 14.2 17.7 0.5

57.8 16.3 25.5 0.5

54.3 16.3 29.1 0.3

60.9 11.7 27.0 0.4

Source: Actual reported results. For all years except 1888/89, Carreira, História financeira, 230, 315, 431, 502. For 1889, Balanço da receita e despeza, 2– 3.

government. Between import and export revenues, taxes on international trade never contributed less than 70% of ordinary revenue from 1840 to 1889. They were the most important sources of income for the general government to support its responsibilities for international relations, domestic law and order, and national economic and financial policy through its ministries. While taxes on the international sector dominated, interior taxes grew in importance across the century, and contributed more than one-quarter of general government revenue by 1870. Of the fifty or so line items that comprised these taxes, just a handful of them were responsible for the bulk of interior revenue. These included a tax on property transfers; a stamp tax, which required a government stamp to be affixed to all official papers; and business license taxes, sometimes called Industries and Professions taxes. The growing importance of interior taxes to general revenue was due to the introduction of an important new stream in the 1860s. The Dom Pedro II Railway, built and extended over the 1860s and 1870s, generated one-quarter to one-third of all interior revenue, a remarkable sum that translated to 5 to 10% of all revenue collected by the Brazilian government. These few streams contributed the most to interior revenue, but the general government created myriad other indirect taxes to raise revenue. National Guard officers and recipients of honorific titles paid fees for their awards, government employees paid a tax on their salaries, and gamblers paid a tax on their winnings. The government filled its coffers with fines for law infractions, fees for government services, and taxes on tobacco.

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The government also generated revenue from state-run agencies such as the postal service, the mint, the national printer’s office, the house of corrections, the home for the blind and deaf, and the imperial school Colégio d. Pedro II. The national gunpowder factory, Ypanema iron foundry, telegraph office, and arsenal all contributed to revenue. So did land and marine rights, sale of national properties, concessions of water rights, and income from diamond fields. Some might be categorized as taxes on income or wealth, but none established the broad tax base that would have been created by property or income tax, with the power to promote investment in social overhead capital of the liberal fiscal state. Provincial Revenue in the Empire Like the general government, provincial governments generated revenue through indirect taxes, fines, and fees. The budgets for the Province of São Paulo show that taxes on trade constituted the single greatest component of provincial public revenue. São Paulo is an excellent case for examining the effect of the fiscal structure on investments in social overhead capital throughout the nation, because it began the nineteenth century with low-to-middling wealth and grew into the one of the country’s most prosperous provinces. Out of the eighteen Brazilian provinces existing in 1835, São Paulo was fifth in population, ninth in total public revenue collected, and thirteenth in revenue per capita. By 1885, when Brazil had twenty provinces, São Paulo collected the second-highest total revenue and ranked eighth in per capita terms. Its early history provides us with a glimpse into the possibilities for investment in public goods in Brazil’s poorer regions, while its transition to wealth in later years offers a look at the best-case possibilities for a province under conditions of growth and prosperity. The provincial government’s responsibilities included subsidizing public observance of Roman Catholicism, maintaining roads and bridges, funding the police force, and providing primary education for children.21 São Paulo’s ability to pay for these goods depended primarily on its taxing the domestic circulation of goods between provinces (table 3.2). Originally called the dízimo, or tithe, this tax came to be known as “exit rates on provincial goods.” It comprised a 5% tax on manufactured goods and a 10% tax on nonmanufactured goods exported from one province to another as well as abroad.22 The other major revenue source was the “Rio Negro tax,” originally levied on animals in transit to Rio Grande

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table 3.2 Selected ordinary revenues of São Paulo provincial government (nominal milréis, percentage of total) 1840/41

1855/56

1870/71

1880/81

1888/89

Total provincial revenues

290,848

547,808

2,430,000

3,732,373

5,072,844

Exit rates on provincial goods Rio Negro/Customs/Transport tax Tax on the sale of slaves Uncured meat/ Literary subsidy Inheritance tax

34.4 27.8 5.2 5.2 2.8

51.1 16.4 9.1 5.5 6.6

70.8 14.8 7.0

45.5 21.4 5.4

47.7 23.9

3.3

6.3

3.9

Weight of these revenues in total revenues

75.4

88.7

95.9

78.6

75.5

Source: Budgeted revenues from São Paulo, Coleção de leis, Lei 17 (1840), Lei 31 (1855), Lei 93 (1870), Lei 156 (1880), and Lei 55 (1888).

do Sul and replaced in 1851 by broader customs and transit taxes levied on people, animals, and vehicles passing on provincial toll roads. This revenue was earmarked specifically for the maintenance and repair of the roads on which each customhouse was located, not for general use in the province, so in some ways it should be considered separately from the revenue available for flexible use. On the other hand, it paid for São Paulo’s most important public works project of the nineteenth century, the maintenance of the transportation infrastructure that was vital to its domestic economy. Taken together, taxes on the circulation of goods, animals, and people comprised 50 to 85% of provincial revenue. Of the remaining taxes collected by the Province of São Paulo, just three contributed more than a small percentage to public revenue: taxes on slave sales, inherited wealth, and livestock slaughter. All three were transaction taxes, although two of the three were wealth related. The tax on the sale of slaves, the meia sisa, was the largest of the three until the 1880s, the eve of abolition.23 This is not surprising, considering the growth in São Paulo’s slave population in the second half of the nineteenth century. Once the transatlantic slave trade was outlawed in 1850, all new slave acquisitions came from the internal slave trade. This trade flowed primarily from the sugar provinces of the Northeast, whose economic vibrancy had waned, to the coffee provinces of the Southeast, whose fortunes were ascending.24 The meia sisa, then, was a tax on property transfer, paid to the local treasury agent at the time the transfer was registered and regardless of the means of transfer (e.g. purchase, sale, exchange, or delivery to satisfy a debt). The second transaction tax was on inherited

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wealth. Inheritance can be a messy and complicated matter, and the laws governing its taxation had many conditional clauses, but essentially the tax was paid at a rate of 10% at the time of the wealth transfer.25 The last of the three taxes was the literary subsidy tax. Also known as the “fresh meat” tax, it was paid at the public slaughterhouse on every head of livestock butchered for public consumption and was earmarked for funding the province’s public schools. It was periodically ceded to the municipalities to supplement their meager revenue streams, and was permanently transferred from the province to the municipalities in 1867. The balance of the miscellaneous categories of taxes that raised funds for provincial public finance pertained to consumption or transactions. Residents and merchants of São Paulo paid tolls when traveling along or crossing the provincial rivers, and various fees when using docks or dispatching ships and packages. Transactions with provincial authorities generated a variety of fees that went into the public coffers, including registry fees for all sorts of documentation like honorific titles and bills of exchange. Even the house of corrections contributed revenue to support provincial governance. While most of these revenue streams made only negligible contributions to São Paulo’s annual budget, they were significant enough to be included in the laws regulating public finance. None, however, provided the modern fiscal levy capable of financing government investment in social overhead capital. Municipal Revenue in the Empire Municipal governments were the most financially disadvantaged of the three levels of government in nineteenth-century Brazil. They were tasked with providing extensive public services, yet received the smallest share of all public revenue— just 5% at the end of the empire. They did not enjoy the same formal demarcation of revenue that provincial governments received in 1832. The only direct mention of municipal revenue sources in the empire’s foundational documents recognizes the municipalities’ right to earn money on public properties, but they were prohibited from levying any fees or taxes that competed with provincial or general revenue. Arguably, municipal governments were in the best position to collect property taxes to pay for their investments in public goods, for local notables served on the municipal councils and certainly had the requisite familiarity with the community and economy to credibly assess and collect such taxes. But the absence of taxes on wealth, combined with the

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demarcation of public revenue between general and provincial governments, left the municipality with little to tax beyond commerce. Instead, municipal governments cobbled together revenue from myriad sources to support extensive mandated services. Like provinces and the general government, they obtained this funding through a list of indirect taxes, fines, and fees assessed on everyday social and economic exchanges. This reliance on local commerce became the foundation of municipal public finance for the remainder of the empire. An important early source of revenue for municipalities was the inspection fee assessed on weights and measures, because every business establishment was required to use a set that was verified annually against the municipal council’s standard. Business permits were another major source of revenue. These were often reported under a generic account, “business licenses,” but were sometimes quite detailed in municipal financial statements, providing a window on the types of enterprises in the urban centers: pharmacies, repair shops, hardware businesses, pottery barns, greengrocers, butchers, drygoods stores, inns and hotels, sweet shops, building contractors, factories of various sorts, gambling establishments, and taverns. Beyond business establishments, licenses or registration fees were required for urban professionals such as attorneys, doctors, and notaries, as well as for vehicles and dogs. Commercial taxes were supplemented by fines for infractions of municipal posturas. As we saw in chapter 2, the first codes written in the 1830s and 1840s were simple, loosely organized collections of a few dozen ordinances, but by the 1860s they were highly structured and comprehensive. Most regulations carried fines for noncompliance. In the early years of the empire when the commercial base of the urban center had not yet developed, these fines generated a significant portion of municipal revenues. In some municipalities, they contributed almost half the annual revenue. But by the 1860s and 1870s, when the commercial activity was more established and tax codes more developed, fines fell to modest contributions of a few percentage points. Revenue from municipal properties, like fees to hold animals in the public corral, rent from the municipal market, or sale of public lands rounded out municipal finance. This was the only revenue specifically allocated in founding documents to support the municipal mandate. Table 3.3 shows that it also comprised less than one-sixth of the municipal revenues on average in the empire. On their own, municipal revenue sources were wholly insufficient to support municipal governance. The inability of the available revenue

100.0%

Total

100.0%

82.3% 9.3% 3.3% 0.8% 4.4%

Araraquara

100.0%

21.6%

65.7% 1.9% 10.8%

Campinas

100.0%

80.3% 4.3% 2.7% 6.1% 8.5%

Franca

100.0%

92.5% 7.5%

Ribeirão Preto

100.0%

83.4% 6.4% 8.4% 0.7% 1.1%

Rio Claro

100.0%

88.5% 5.4% 3.7% 2.3%

São Carlos

Source: Elaborated by the author from manuscript financial statements. ALESP Império Municipal collections for Amparo, Araraquara, Campinas, Franca, Ribeirão Preto, Rio Claro, and São Carlos, 1835– 89. Note: Ordinary revenues exclude balances carried forward from prior years. Surplus funds were always an indicator of economic crisis, not abundance, as they spiked in years following deep deficits in response to cuts in expenditures.

80.8% 4.2% 13.1% 0.2% 1.6%

Taxes, fees, and licenses Fines Municipal property Accounts receivable Extraordinary revenues

Amparo

table 3.3 Sources of municipal revenue in the empire

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streams to meet the financial needs of the municipalities caused their councils to petition their respective provincial legislative assemblies for additional revenue sources. The provinces responded by occasionally ceding the right to some of their own revenue lines. During the nineteenth century, São Paulo occasionally ceded four specific taxes on liquor and meat to its municipalities to relieve their financial distress. The novo im­ posto, or new tax, a tax on general stores, warehouses, bars, and taverns, was granted to municipalities in 1849 after the municipal council of São Paulo’s capital city (also named São Paulo) complained to the provincial legislative assembly about the insufficiency of public revenue. The carne verde/reses mortas (fresh meat/slaughtered livestock), a tax on each head of cattle butchered for consumption and destined for projects concerning the main church, cemetery, potable water supply, sidewalks, and other public works, was transferred back and forth between province and municipalities several times before definitively becoming a municipal tax in 1867. So was the related and sometimes coterminous literary subsidy, a tax on butchered meat with different rates for each type of animal.26 The tax on aguardente, the strong, clear liquor distilled from sugarcane, was likewise a provincial tax until 1858, when it was turned over to the municipal councils for their use.27 This tax was earmarked for the main church, cemetery, potable water supply, sidewalks, and, if funds permitted, additional public works. Just before the end of the empire, one last tax was transferred from province to municipality. This was the tax on urban property, known originally as the décima urbana (urban tenth) and later as the imposto predial (building tax). A provincial tax for almost the entire century, its purpose was to pay for urban lighting.28 It was transferred from the provincial treasury to the municipalities in 1886, by which time increasing urbanization made it a valuable revenue source. It was not a property tax, despite the name; it was a tax on the rental value of urban properties or on unimproved lots to stimulate development. The only other potentially lucrative sources of municipal revenue were taxes on sugar and coffee, which appeared on some municipal financial statements in the 1880s. However, these were unimportant rates that produced only modest revenue because of the apportionment of revenue determined back in the 1830s. Only the general government could tax exported products, and neither province nor municipality was allowed to compete with the general government for revenue. We saw in chapter 2 that municipal ordinances varied from municipal-

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ity to municipality in a reflection of local conditions. The same is true of the revenue base of each municipality, and helps us begin to understand the beginnings of structural inequality between them. While it is the case that the bulk of their fiscal resources was derived from taxes on the local economy, and that many of the sources of revenue were similar between municipalities, by examining their municipal tax codes and annual financial statements we find profiles of these local economies that reveal the differences between them. Consequently, we begin to understand how the reliance on local commerce produced long-term structural inequality in municipalities’ socioeconomic development. The tax codes themselves offer the best view into changes in the local economy that provided the municipality’s fiscal base. In the 1860s, municipal economies were relatively undiversified, and most municipalities charged rates on the same core businesses: the distillers supplying aguardente to taverns and bars; the drovers moving herds through town; the vehicles transporting goods and people; the inns hosting travelers; the general stores supplying locals with dry goods, tools, cloth, and other necessities; and the apothecaries dispensing remedies for ailments (table 3.4). By 1875, butcher shops and bakeries had become numerous enough to tax; milk was sold from tethered animals in the streets; various forms of entertainment, from trained animals to musicians to fireworks and gaming parlors, were available to enliven urban society; and residents with disposable income could have their portrait made. By 1885, coffee trading houses appeared on the tax rolls, as did press and photography studios and shops that sold gold, silver, and other jewelry. Bookstores, barbershops, china shops, piano tuners, sugar refineries, beer breweries, tanneries, and buggy works were all new entries in these rolls as well, as were factories that provided machinery for the growing coffee trade. Urban settlements were growing, and their economies were becoming more complex. Snapshots of municipal revenues from around 1865, 1875, and 1885, drawn by comparing tax codes to financial statements, confirm this picture of growing complexity (table 3.5). The snapshots tell us which revenue sources were the most important in each municipality, and how those sources changed in their relative contributions over the decades. They also show us how the revenue sources varied in importance from municipality to municipality because of the characteristics of their local economies.29 Like the posturas, the tax codes that levied rates on goods, services, and people, for instance storefronts, workshops, peddlers, and liberal professionals, shared some similarities between the municipalities but also

chapter three

78 table 3.4 Common tax categories across most municipalities Circa 1865 (8 of 75 categories) Coffee Aguardente Animal drovers Apothecaries Vehicle licenses General stores Taverns, hotels, inns Weights and measures

Circa 1875 (26 of 106 categories)

Circa 1885 (30 of 140 categories)

Aguardente Animal drovers Apothecaries Vehicle licenses General stores Taverns, hotels, inns Weights and measures Butchers Bakeries Bars Dogs Dentists Entertainment (trained animals) Foodstuffs Fireworks displays Legal gaming Liberal professional licenses Liquor sales Master craftsmen Milk cows and goats Musicians Pastureland for rent Portraitists Pottery barns/tile works Public entertainment Street peddlers

Aguardente Animal drovers Apothecaries Vehicle licenses General stores Taverns, hotels, inns Weights and measures Butchers Bakeries Bars Dentists Entertainment (cosmorama)

Legal gaming Liberal professional licenses Master craftsmen

Pastureland for rent Portraitists Pottery barns/tile works Public entertainment Street peddlers Brewery/Distillery Ceramics and salt Coffee processing machinery Export houses (coffee) Jewelry, gold, and silver Lottery tickets Medicines Slaughterhouse Small workshops Sugar refineries

Sources: Elaborated by the author from municipal tax codes found in posturas. Note: Figures in parentheses beside the year are the number of common categories and the total number of individual tax categories aggregated from the seven municipalities in that year.

many features unique to a single place and time. The circa 1865 tax codes of our seven municipalities taken together, for example, levied rates on 75 distinct categories of goods, services, and professionals, yet only 8 of those categories were common across the municipalities. Circa 1875, the sum of all tax codes had expanded to 106 unique categories, with 26 categories shared among them. By 1885, the municipalities taxed 140 separate

4.2 70.1 8.2

2.4 67.9 14.4

34.5 29.6 10.3

26.7 30.2 17.9

Araraquara

17.9 34.2 29.3

43.6 15.4 8.9

Campinas

16.3 62.1 9.2

1.8 59.2 28.0

Franca

8.6 63.0

R. Preto

23.8 52.6 4.9

85.5 8.5 2.2

R. Claro

3.9 55.9 12.1

5.6 89.9 5.6

53.3 28.7 3.4

S. Carlos

Source: Elaborated by the author from manuscript financial statements. ALESP Império Municipal collections for Amparo, Araraquara, Campinas, Franca, Ribeirão Preto, Rio Claro, and São Carlos, 1835– 89. Note: Slaughterhouse includes the tax on fresh meat, which was reported separately for some municipalities but not others. This broad category captures the importance of livestock to the local economies. Rio Claro ca. 1865 reported the fresh meat tax as part of its aguardente revenues. All values for 1865 are actual. Actual values for 1875 are Amparo, Franca, and São Carlos. Actual values for 1885 are Amparo and Araraquara. The rest are budgeted values.

Aguardente Business licenses Slaughterhouse

Circa 1885

Aguardente Business licenses Slaughterhouse

13.7 74.1 6.7

30.4 34.3 11.6

Aguardente Business licenses Slaughterhouse

Circa 1875

Amparo

Circa 1865

table 3.5 Major sources of municipal taxes, fees, and licenses, ca. 1865, 1875, and 1885 (% of ordinary revenues)

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categories of goods, services, and professionals, with 30 categories common to them. In short, tax codes varied between municipalities, and tax bases expanded over time. Each municipality’s code detailed what it taxed and by how much, revealing the economic activities observed by the municipal councilors in the streets of the settlements or along the roads in the rural zones. The most important general trend in revenue generation from 1865 to 1885 was the declining reliance on a single source of revenue— taxes on the sale and consumption of liquor— and the growing contribution of the increasingly diversified local business sector to revenue over time. In 1865, municipalities generated an important part of their ordinary revenue from taxes on aguardente.30 The fee to sell this hard liquor was assessed on every establishment that sold it. The value of the fee was on a sliding scale determined by the size of the settlement in which the tavern operated, a nod to the tavern owners’ revenue potential. This assessment was also paid by mills that sold the aguardente they produced. In Rio Claro and São Carlos, taxes on aguardente produced 85% and 53% of their ordinary revenue, respectively. Amparo and Araraquara did not rely as heavily on this liquor tax as the other two, but it contributed about as much as all other businesses combined to their local accounts. Taxes collected at the slaughterhouse— whether for the fresh meat/literary subsidy tax that had been ceded by the province to address the shortage of local taxes, or the standard municipal fee collected on every head that entered the food supply— rounded out the most important contributors to local coffers. The fiscal profile of these hinterland municipalities around 1875 continued to rely on taxes and fees related to commerce, but the importance of taxes on the sale of aguardente lessened for many municipalities as population increased and new goods and services broadened the tax base.31 We see that in this decade, licenses and fees on local business activity grew to supply the majority of revenue in several municipalities, reaching almost 90% in the case of São Carlos. Within this broad category, many types of activities were reported as separate features on the balance sheets that illustrate the budding diversification of the local economy. Of note was the emergence of an urban professional class, a quickening of the circulation of local goods, and the consumption of nonessential services. Amparo’s professional licenses for doctors, lawyers, and notaries, for example, generated close to 9% of its revenue. The tag fees for dogs and vehicles, fees to drive livestock through town, and fees to operate pasturelands for rent produced 14.5% of Campinas’s revenue, 6.5% of São Carlos’s, and 5% of Amparo’s. Amparo collected almost 6% of its

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revenue from licenses to run leisure establishments offering public events and legal gaming. These were not the major sources of local finance, but they were important enough to be reported in separate revenue accounts. Franca earned the most from General Licenses, a catchall term for business and professional licenses. The tax produced more than half of its ordinary revenue in 1875. Another 28% came from its slaughterhouse, the most of any municipality and an expression of Franca’s importance in the regional cattle trade.32 Amparo’s most important revenue source came from business licenses on retail establishments along the municipal highways linking its settlements. These establishments captured the rural trade within the municipality as well as the trade between Amparo and its neighboring municipalities, and generated 26% of ordinary revenue. Urban retail shops added another 25%. São Carlos’s local business provided most of its ordinary revenue, almost 90% of the total circa 1875. The growing diversification of the local economy continued to affect municipal revenues in 1885. Retail business licenses still dominated in every municipality, while the relative importance of aguardente taxes continued to decline, with four of the municipalities generating less than 9% of total taxes from alcohol. Amparo’s business licenses and fees generated 70%, a fair portion of that from licenses for liberal professionals like doctors, dentists, and notaries public (11 percentage points). Tag fees for vehicles and animals produced 5% of revenue, more or less, in four municipalities. All recorded some revenue from entertainment and gaming fees, but these fees mattered the most in Araraquara (about six percentage points). Aguardente no longer mattered much for many of these municipalities as a proportion of total ordinary revenue. Only Rio Claro still relied on these taxes for a substantial portion of its revenue. From the mid-1870s to the mid-1880s, new revenue emerged from two sources that tell us the region was urbanizing in response to the new prosperity from the booming export sector. These were the imposto predial and taxes on coffee and sugar. The imposto predial was a 6% tax on the annual rental value of all urban buildings except convents and charitable organizations (they paid 10%) that was transferred from the provincial treasury to municipal councils by 1886. Two other property-related taxes also emerged at this time: a tax on property titles and a fee for water piped directly to urban buildings. Some combination or subset of these taxes figured in the revenues of Araraquara (1.9%), Franca (5.9%), Rio Claro (13.3%), and São Carlos (0.6%). As for commodities taxes, three of the municipalities collected taxes on their primary products for the first time in the 1880s. Modest tax rates

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on locally produced and sold commodities had been on tax rolls since the mid-1860s, but these taxes had not produced enough revenue to be reported separately. Only in the 1880s did they appear as major, distinct sources of municipal revenue. Recall that municipalities were not allowed to compete with the general government on export taxes, so these rates were on the production and sale of sugar and coffee from their farms, a technicality to be sure. The revenue could periodically be substantial. Ribeirão Preto earned up to 20% of its revenue in 1886– 87 from coffee produced on its farmlands and shipped out of the region. São Carlos earned between 18 and 23% of its revenue in the mid-1880s on sugar and coffee. Neighboring Araraquara generated 27% of its revenue in 1879– 80 from coffee. But the taxation of coffee was intermittent, and the rate collected was minuscule— the equivalent of a few cents per arroba, or fifteen-kilo, sack of coffee or sugar.33 What is notable about these patterns is this: at the moment when the international economy was generating insatiable demand for São Paulo’s coffee, and despite periodic contributions in a few municipalities, coffee contributed little to municipal revenues. Finally, recall that only onequarter of the tax categories were held in common across the municipalities. Each tax code by 1885 reflected the specific businesses unique to that place, like hat factories, watchmakers, silk works, women’s fashion shops, shops that sold decorated papers and mirrors, piano tuners, lumber mills, itinerant tinkers, and pasta factories. Most of the new categories contributed just a few percentage points toward total revenue, if anything at all, but together the combined enterprises that served these municipalities provided from one-quarter to almost one-half of total revenue. Municipal revenues, then, were based on the local circulation of goods and services. Initially generated almost entirely from licenses and fees related to the sale of aguardente and the consumption of beef, the trend over the decades was for the revenue base to broaden in response to the expansion of the local economies. A modest introduction of something akin to a property tax, the urban tithe, generated a similarly modest amount of revenue. The introduction of a tax on coffee and sugar generated a more substantial amount of revenue, but only in three of the seven communities that drew their fortunes from one or the other of these two commodities. Overall, though, no shift from indirect to direct taxes occurred in the empire. Most revenue came from business licenses, fees, and taxes. Because these levies were almost certainly passed along to their customers through increased prices for goods and services, this indi-

the fiscal state

83

rect revenue base affected standards of living for all who encountered the formal economy. Thus, the wealthiest agricultural region in all of Brazil relied on a list of more than one hundred specialized taxes, licenses, and fees on the modest transactions of everyday life as the source of revenue for investment in public goods.

The Republican Fiscal State The 1891 Brazilian constitution introduced a decentralized federative republic, profoundly altering the political administration of the nation by emancipating the provinces from the control of the central government and the municipalities from the oversight of state legislatures. But it did little to alter the fiscal structure of the Brazilian state. Instead, it codified the indirect tax sources of the empire and broadly maintained their division among national (general), state (provincial), and municipal governments. This celebrated moment of rupture between centralization and federalism was in reality a lost opportunity to restructure finances and promote local domestic economic and social development. The Brazilian economy had not changed at the moment of political rupture. The new republic’s principal sources of national public revenue were the same as those of the overthrown empire: taxes on imports, taxes on the movement of ships engaged in domestic and international trade, stamp taxes, and taxes on federal mail, telegraph services, and the Central do Brazil Railway (the renamed Dom Pedro II Railway).34 Taxes on imports continued to be the main source of revenue, comprising between 50 and 67% of ordinary federal revenue up to 1914. These were supplemented by a series of consumption taxes introduced in the beginning of the republic. Initially restricted to tobacco, taxes on alcohol, matches, salt, shoes, candles, perfumes, pharmaceuticals, vinegar, preserves, and playing cards were added by the end of the 1890s. Hats, canes, and cloth were taxed by 1904. When taxes on imports waned after 1914 because of the international disruptions to trade caused by World War I, the government imposed new consumption taxes to compensate for this lost revenue. Brazil, a nation rich in natural resources and steeped in international trade, nonetheless rested its financial structure on basic consumption taxes, which grew from an insignificant 0.3% of federal revenue in 1894 to more than 20% by 1930. The interior taxes, now renamed rendas industriais, or industrial revenues, contributed another 10 to 20% of ordinary revenue,

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their relative importance tending to wax and wane in inverse proportion to import taxes.35 Indirect taxes on the importation, circulation, and consumption of goods and services comprised almost 100% of ordinary federal revenue. The republic’s continued unwillingness to institute direct taxes on wealth and income perpetuated a serious deficit problem that had become endemic in the empire. The twenty-year span from 1844 to 1864 had registered just four years of surplus against sixteen of deficits. The next twenty years produced just one surplus against nineteen deficits. The twenty-year period from 1884 to 1904 recorded fifteen deficits, while the next period to 1924 yielded seventeen.36 In 1924, a British mission to Brazil studied this fiscal situation as part of an effort to improve the country’s credit rating. The mission warned, “Repeated deficits should be avoided in the future if you wish to restore the credit rating of Brazil. If this is not assured, public finances will continue to worsen year after year: the weight of the debt will grow, [increasing the] risk of inflation and the foreign loans will be obtained with great sacrifices for this country.”37 The admonition fell on deaf ears. In the remaining years of the republic (1925– 30), Brazil recorded just one surplus.38 For the provinces, now called states, the most important financial change in their transition from empire to republic came in the apportionment of revenue between the national and state governments. During the empire, the central government had expressed concern about the inadequacy of provincial funds to support investments in social overhead capital (although much of this concern arose from the central government’s paranoia that provinces were encroaching on its rightful revenue). But with the advent of the republic, particularly its decentralized administrative and fiscal structure, this concern became paramount. Gail Triner writes that the new republican government altered the laws on subsoil rights to promote state development of these sources of potential revenue. This transfer of mines and terras devolutas, public or vacant lands, to states via article 64 of the 1891 constitution was enacted specifically to remedy the states’ revenue problems by endowing them with the financial benefits that came from the exploitation and development of natural resources.39 The constitution also ceded the taxes on industries and professions, rural and urban property, and the transfer of property to the states. It reaffirmed the states’ right to tax commerce within their borders. The most important addition to state revenue, especially for states that produced goods valued in international markets, was the right to tax ex-

the fiscal state

85

ports.40 This revenue source was a boon to states like São Paulo, which had a large export-oriented economy. Export taxes contributed onethird to one-half of São Paulo’s state revenue during the republic. According to Joseph Love, the new division of revenue caused its income to triple from the 1880s to the 1890s.41 The next most important source of São Paulo’s revenue, intervivos, property transfers between living persons, was loose change compared with export taxes. These levies on property transfers generated between 8 and 17% of São Paulo’s public finance. In contrast, the coffee export taxes made São Paulo the richest state in the nation in absolute as well as relative terms. If we sum up the revenue collected by the states in 1912, São Paulo’s was twice as great as that of the next-highest state, Minas Gerais, and seventy times that of the lowest state, Goiás. In per capita terms, São Paulo’s revenue was 2.6 times that of Minas Gerais and eight times that of Goiás. Taking the nation as a whole, the value of its revenue accounted for just shy of one-third of all states’ revenue that year.42 The most important source of municipal revenue in São Paulo were Industries and Professions, taxes, licenses, and fees on every type of commercial, retail, and professional activity imaginable. These were, in fact, allocated to the states. But São Paulo was one of three states, along with Espírito Santo and Rio Grande do Norte, to pass their newly acquired right to this lucrative tax stream to their municipalities. For the period between 1894 and 1928, Industries and Professions averaged 22% of all of São Paulo’s total municipal revenue.43 The imposto predial was the second most important source of municipal revenue in São Paulo during the republic, adding another 6% to its total revenue. Water and sewer systems generated 4% of revenue in the state’s municipalities. Coffee, the greatest source of wealth and income for the state, was taxed at so inconsequential a rate by municipalities that it contributed very little (table 3.6). The remaining categories of municipal revenue spelled out in the 1891 ordinary law included taxes on municipal products not destined for export (with allowances for a small tax on coffee produced in the municipality, whether destined for local consumption or export); fees on the placement of businesses on sites of public domain; fees for transportation services; license fees for public entertainment; fees to regulate weights and measures; taxes on auction houses, fashion stores, and fire insurance; and fines for infractions These revenue sources bore a strong resemblance to those of the empire, both in name and in their predominantly regressive nature.44

70.2%

Licenses and fees, % total revenues

53.8%

27.5% 18.6% 1.6% 3.8%

Araraquara

43.0%

16.0% 8.8% 12.8% 1.5%

Campinas

35.0%

14.1% 5.6% 10.7% 2.7%

Franca

46.2%

19.9% 12.0% 2.3% 5.0%

R. Preto

57.2%

30.3% 12.9% 3.6% 5.3%

R. Claro

43.8%

17.8% 6.1% 14.5% 4.3%

S. Carlos

39.2%

21.9% 6.3% 4.3% 1.8%

SP state

Source: Elaborated by the author from published financial statements. São Paulo, Anuários estatísticos, balanços de receitas e despezas, 1894– 1928. Note: This table highlights selected components of taxes, licenses, and fees, not all components. Therefore, percentages do not add to the total reported in the bottom row. SP state is the average of all municipalities net of the seven cases under study.

32.2% 6.6% 16.2% 6.5%

Industries and Professions Imposto predial Water/Sewer Coffee

Amparo

table 3.6 Selected municipal licenses and fees, 1894– 1928 (average contribution to total revenues)

the fiscal state

87

Indeed, this new apportionment of revenue did nothing to remedy the regressive structure of the Brazilian fiscal system. The imperial reliance on assessing taxes and fees on the local economy persisted in the republic: take Ribeirão Preto, where Industries and Professions generated the most revenue of any fiscal category on average across the republic. The first tax code of the republican regime, Law 3 of June 8, 1894, listed 241 separate rates for the city’s businesses and professionals— arranged alphabetically across fifteen manuscript pages, from açougue (butcher) to vio­ lero (violist)— as well as a range of taxes on individuals and institutions that lent money at interest, businesses that sold sundries, merchants that peddled specialized goods, doctors and lawyers that cared for body and society, and the carriages that facilitated the circulation of people, goods, and services. (This last category alone contained more than twenty separate rates, depending on the type of vehicle and its use.) Valuable commodities like aguardente, coffee, grains, and pork were taxed (aguardente, the most; coffee, the least). Sixty or more rates applied to a miscellany of goods and services, including circus tents, a children’s puppet theater, and a seller of firewood. Fees for document requests from the Municipal Secretary, such as copies of old certificates or deeds and the generation of new ones, merited more than twenty individual tax rates that seemed to correlate with the degree of bother the secretary would endure in completing each request. Nominal fees were levied on the frontage of buildings to pay for the upkeep of municipal sidewalks. The code was rounded out by one of the oldest of all municipal taxes, the tax on weights and measures. Businesses and factories that operated machinery paid more than artisanal workshops. Itinerant peddlers paid much lower license fees than shopkeepers. Businesses that provided food paid modest fees, while those selling liquor and luxury items paid high fees. Bankers and capitalists— men who lent money at interest— paid the highest rates of all.45 The second code, enacted in 1910, did not alter the form or content of the first, although it consolidated categories (to 179) and increased the rates, some of them quadrupling in real terms. The third code, enacted in 1924, more than doubled the number of taxes on industries and professions, and differentiated the rates depending on the quality (high or middling), location (central business district or periphery), and degree of sophistication of production (artisanal, automated). This code illustrates how specialized and varied local enterprises had become as urbanization opened up space for commercial and professional products and services, but the general scope of taxation established in the first two codes per-

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sisted. However, these taxes were not the only revenue-generating items in the code; separate sections levied rates on the rental value of property, vehicles circulating the municipal streets, the verification of weights and measures, and the municipal market, slaughterhouse, and cemetery. New sections were added to introduce zoning licenses for new factories and a variety of rates for itinerant peddlers of all kinds of merchandise. All these additions, however, shared one common thread— they pulled their revenue from the local municipal economy.46 Across São Paulo, municipal finances rested overwhelmingly on these same sources (table 3.7). The republic’s new allocations of revenue somewhat ameliorated the imbalance between national, state, and local government finance that had prevailed during the empire, but did not come near the municipal-friendly allocations found in more progressive financial systems, such as the those of the United States or Prussia. In 1885, Brazil’s central government collected over 77% of all public revenue, with just 18% going to provincial governments. In 1912, the national government’s share in total revenue declined to 60%, with almost 25% going to the states. Municipalities that had controlled just 5% of all government income now commanded 16% of public funds. This varied from year to year, of course, but remained elevated compared with the empire. State revenue fluctuated between 22 and 31% of total government revenue, while municipalities had anywhere from 12 to 19% of total government revenue at their disposal in the republic.47 Rebalancing the allocation of public revenue between the three levels of government improved the municipal financial base somewhat, but it did not address the principal problem of the structure of the Brazilian fiscal state. Public revenue remained precariously dependent on a structure of local, indirect taxes on goods and services. Moreover, the negative effects of indirect taxes on economic equality were not unknown to the Brazilian government. The eminent imperial statesman Baron of Cotegipe called attention to Brazil’s flawed tax system as early as 1877. His report called out the “bad state of finances” and the need to bring expenditures in line with revenues through spending cuts and new taxes. He proposed a simple remedy to this imbalance: a tax on land. The baron’s report acknowledged economists’ widespread acceptance of the importance of property taxes in public finance. It also admitted that putting such a system of taxes in place would create a powerful pool of wealth for the development of Brazil. Typical of nineteenth-century deliberations, however, this possibility was entirely hypothetical, more a rumination

100%

72.9%

Total

Licenses and fees + loans

82.0%

100%

53.8% 28.2% 4.1% 4.0% 10.0%

Araraquara

a

55.9%

100%

43.0% 12.9% 6.0% 4.7% 33.4%

Campinas

67.1%

100%

35.0% 32.1% 6.9% 3.0% 23.0%

Franca

72.1%

100%

46.2% 25.9% 9.1% 4.0% 14.8%

R. Preto

69.1%

100%

57.2% 11.9% 7.9% 2.7% 20.3%

R. Claro

67.9%

100%

43.8% 24.1% 5.6% 7.2% 19.3%

S. Carlos

65.1%

100%

36.9% 28.2% 6.9% 3.4% 24.6%

SP state

Source: Elaborated by the author from published financial statements. São Paulo, Anuários estatísticos, balanços de receitas e despezas, 1894– 1928. Note: Percentages are net of surplus balances carried forward. Balances ranged from 1 to 3% of revenues for all seven cases except Amparo, where balances averaged 6% of all revenues in the republic. SP state is all municipalities net of the seven cases under study. a The low values for Campinas loans are due to its inconsistent allocation of lines of credit in its consolidated balance sheets. Examination of detailed accounts reveals that it sometimes included bank advances among its loans, and that at other times it omitted them. In the years loans were reported, they averaged 45% of total revenue. The very high values for extraordinary and diverse revenues for Campinas partly (and only sometimes) reflected those lines of credit from banks. For Franca, the handful of detailed balance sheets show these accounts reflected a number of taxes on vehicles, walls, animals, weights and measures, and other vestiges of the nineteenth-century revenue streams, combined with a few hefty payments from the water and sewer company. Extraordinary and diverse accounts, then, contained both irregular revenues and regular streams poorly allocated.

70.2% 2.7% 7.8% 3.7% 15.7%

Licenses and fees Loans Municipal property Accounts receivable Extraordinary/Diverse revenues

Amparo

table 3.7 All sources of municipal revenue, 1894– 1928 (average contributions)

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than a serious proposal. Property taxes were not a viable revenue source, the argument went, because the nation was vast and communication difficult, making collection impossible in terms of both creating the necessary property register and organizing the assessment and collection process.48 The 1883 commission on the apportionment of revenue likewise affirmed that such a tax would improve the public finances of the nation and possibly put an end to the provinces’ encroachment on revenue rightly belonging to the central state. Then in 1924, the British mission report addressed the issue in direct and unmistakable language: the Brazilian policy on public finance created an undue burden on the poor. It declared, “The tax on importation . . . on consumption and on merchant sales, which together reach the community in general, must weigh on the people with little income, while the tax on the wealthy class is relatively small, due to the insignificance of direct taxation.” It urged Brazil to adopt a system of direct taxes “that obligates the wealthy citizens to contribute to the expenditures of the country, so that they bear a reasonable portion of the weight that already burdens the less fortunate.”49 Did indirect taxes fall disproportionately on Brazil’s poor, as the contemporary reports suggested? If we look first at sources of national revenue, the reliance on indirect taxation is often interpreted as regressive. But the single greatest source of revenue for the Brazilian state was the taxes on imported goods. These taxes were imposed on luxury items such as imported wines, crystal, porcelain, furniture, and other high-end goods that were not consumed by the average Brazilian. Therefore, this tax, while indirect, was hardly regressive. In addition, some of the import taxes were paid by firms that bought factories and equipment for industrial and transportation ventures. They had the potential to raise their production costs and retail prices to the consumer, but the largest and best connected of these firms obtained tax exemptions for imported machinery. Thus, their consumers were not burdened with pass-through pricing to compensate for import duties. The second-largest category of public revenue, the interior and consumption taxes, were more likely to be regressive than import taxes. Most of these were paid by individuals of some means, but some were passed along to all consumers. Taxes on property transfers affected all who owned movable property and real estate. Similarly, the décima urbana and its successor imposto predial were borne by property owners, but certainly were passed through in the form of higher rents. Licenses paid by the professional classes were a business expense that passed through in bills for

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services rendered. Costs to entrepreneurs arising from freight charges on the state-owned railway were also passed along, although William Summerhill has shown that the social savings from rail transport contributed to the nation’s economic development by reducing transportation costs relative to the alternative mule train on poorly developed roads.50 Thus, at the level of the general government, the indirect taxes were not uniformly regressive. At the provincial and municipal levels, the argument that Brazil’s reliance on indirect taxes was detrimental to economic well-being is much stronger, because these taxes applied to basic goods and were borne by consumers in the form of higher prices. Although the exit rates on provincial goods exported from one province to another as well as abroad comprised the largest or second-largest source of provincial revenue during the empire, these did not raise the cost of São Paulo’s goods to São Paulo’s consumers. Nonetheless, these internal customs duties were charged by all provinces, and raised the cost of domestic consumer goods of every type, from the most humble to the most refined, in every province. The transport tax— originally a tax on cattle leaving the province, but later a tax on the circulation of people and vehicles— added another layer of expense to domestic consumer goods. And the literary subsidy, a tax levied on butchered livestock entering the food supply, combined with the requirement that all meat must be butchered by a licensed establishment, raising the price of meat for those who could afford to consume it. Conversely, the tax on the sale of slaves in the empire was a production cost that affected the prices of exported goods. The 10% tax on inherited wealth did not have much of an effect on standards of living of the broad base of the population. And the addition of export taxes to the state public revenue sources after the declaration of the republic exported that burden to the foreign consumer. So at the state level, the evidence for a regressive effect of indirect taxation is also mixed. It is at the municipal level that we find the strongest evidence that reliance on indirect taxation for public revenue was regressive, with negative effects on income and standards of living. The municipal fiscal menu was weighted toward taxes and fees on commerce. From weights and measures to business licenses to fees and taxes levied specifically on food and beverages, municipal taxes raised the price of goods and services to all who transacted in the formal economy. Many of these taxes implied a physical presence in the urban settlements, but a portion of the tax code affected rural producers and consumers. And urbanization accelerated with the

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coffee boom, drawing a growing proportion of the population into the urban spaces and the formal economy. Consequently, municipal taxes, licenses, and fees fell on all but the poorest rural population who lived a subsistence existence. The persistence and expansion of these taxes and fees on the circulation of municipal goods and services promoted the sole source of municipal revenue. Did the unwillingness to entertain property taxes deprive the Brazilian nation of a source of funds for meaningful investment in social overhead capital? The anecdotal evidence suggests that the answer is yes. At the national level, revenue sources were insufficient to fulfill the needs of the government. The evidence is found in the nearly annual occurrence of deficits in Brazilian public finance after 1850. This gap between revenues and expenditures— a yawning gap in particularly bad years— sent the Brazilian government to the foreign markets in search of loans. Some loans were meant to cover the gap, while others were needed to service past unretired loans.51 Plainly, revenues from import taxes and interior taxes were insufficient to satisfy the financial needs of the Brazilian state, so the addition of another revenue source such as a tax on property (or income) had the potential to enhance domestic revenue generation and lessen the reliance on borrowing. As to the question of whether property taxes would have made a difference in investment in social overhead capital and public welfare improvements, it is likely that they would have, on the condition that they were levied as a municipal tax. The institution of private property had been established only since the 1850 Land Law, a law primarily intended to compel the rural poor, unable to secure their own title to property, to work on the estates of large landowners.52 The law required a formal register of privately held land, but did not require the assessment of that land’s market value. Property taxes collected as general government revenue certainly would have been a logistical challenge, but property transfers still took place all over Brazil through sale and inheritance; both of these triggered a market valuation, so the data were there to be captured for the implementation of the tax. Moreover, the large property owners who generated Brazil’s wealth were usually the local notables who served on the municipal councils (or else were the councilors’ sworn enemies). These owners were in the best position to know the value of property, and had the local clientele to facilitate the collection of a tax on its value. The argument that Brazil lacked the infrastructure to tax its major source of wealth was an empty one. As chapter 4 will show, this revenue would have been most welcome.

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Finally, how did the reliance on the local economy shape municipalities’ ability to raise revenue? For this we turn to revenue per capita. All our municipalities were relatively small in the early and mid-nineteenth century, and grew larger and more prosperous at the turn of the twentieth century; all produced goods and services for local consumption; all were based, at least in part, on the production of coffee for export; all used slave labor and then around the 1880s transitioned to wage labor predominantly supplied by immigrants; and all functioned in the same institutional environment under the same legal rules of the game. In other words, there were no major differences— economic, social, cultural, political, or institutional— that would hamper the ability of one or the other municipality to levy taxes. In fact, we saw earlier that all initially benefited the most from taxes on aguardente, fresh meat, warehouses, and taverns, and then from licenses and fees on urban services and professionals, and that very few taxed their exported products, even minimally. The differences in their per capita revenues, then, reflect the differences in the size and vibrancy of their local economies, as well as their willingness or ability to impose taxes. It is here that we see the incipient inequality introduced into Brazilian economy and society through municipal finance: while the relative weights of revenue sources in the republic were roughly similar across the seven municipalities under study because of their universal reliance on the local economy for municipal finance, the per capita values of those revenues were not. There was a wide disparity in the value of revenues generated by each municipality, a function of its economic base. If we examine the per capita revenue from taxes, fees, and licenses derived from the local economy that in most decades generated upwards of twothirds of total revenue for these municipalities, we find that the wealthiest municipality generated between two and seven times the revenue of the least wealthy (excepting the 1830s, when the difference was eighteen times) and between one-and-a-half and almost four times the revenue of the municipality of middling fortunes. There is substantial difference at the bottom of the distribution as well: for every one hundred reis of municipal revenue generated to pay for public services in the least wealthy of the seven, the municipality ranked just above it generated anywhere from 120 reis to 190 reis per capita in most decades (table 3.8). The relative ability to extract revenue from the local economies shifted over time as the effects of the coffee boom moved through the province of São Paulo. Its communities that were integrated the earliest into the international sector, Campinas, Amparo and Rio Claro, had the highest per

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table 3.8 Revenues per capita from taxes, fees, and licenses, 1835– 1928 (nominal and real milréis) In order of founding date

1830s

1850s

1870s

1880s

1890s

1900s

1910s

1920s

Campinas Franca Araraquara Rio Claro Amparo São Carlos Ribeirão Preto SP state

0.197 0.022 0.011

0.242 0.116 0.063 0.340

1.596 0.433 0.387 0.980 0.884 0.265

4.167 1.312 1.098 1.742 1.738 1.082 0.585

4.848 4.375 3.221 2.535 3.828 1.825 2.846 2.050

7.235 5.206 5.586 4.055 6.765 4.851 5.132 2.978

8.375 3.550 6.445 3.476 5.213 5.103 6.041 3.351

9.830 3.115 3.029 3.886 4.320 6.249 3.095

Highest/ lowest Highest/middle Second lowest/ lowest

18× 9× 2×

5.4× 2.9× 1.6×

6.0× 3.7× 1.5×

7.0× 3.2× 1.9×

2.7× 1.5× 1.4×

1.8× 1.4× 1.2×

2.4× 1.6× 1.0×

3.2× 2.5× 1.0×

Source: Elaborated by the author from manuscript and printed financial statements. ALESP Império Municipal collections, 1835– 89; São Paulo, Anuários estatísticos, 1894– 1928, balanços de receita e despeza; Camargo, Crescimento, vols. 2 and 3, tables 4, 5, 6, 14, 15 and 16; Relatório Bookwalter, 9. Deflator is Catão, “A New Wholesale Price Index,” and Haddad, “Growth,” 1913 = 100. Note: All revenues are actual except for 1870s and 1880s Campinas, 1880s São Carlos, and 1880s Ribeirão Preto, which are budgets. Revenues are nominal for the 1830s and 1850s, real for the 1870s onward. There is no source that compiles data for all São Paulo municipalities before the 1890s. SP state is all municipalities in São Paulo, net of the seven cases under study. It does not figure into the calculation of highest/ lowest, etc.

capita revenues in the 1870s. As coffee production extended up toward the Minas Gerais border, thanks to improved transportation networks by the 1880s, and domestic enterprise grew to serve the rising populations and satisfy the desires accompanying rising incomes, revenue grew as well. Campinas, with the largest and best-developed urban infrastructure and its position as the second most important city in the state after the capital, remained dominant throughout both the empire and the republic. Ribeirão Preto and neighboring Franca surged at about the same time and in the same order of magnitude as the coffee boom spread with the extension of the railroad. Meanwhile, Ribeirão Preto’s revenue growth continued (it became one of the nation’s wealthiest municipalities by the mid-twentieth century), but Franca’s waned. A similar pattern held for Araraquara and its neighbor São Carlos. By the twentieth century, the local business environment of two of the older municipalities, Rio Claro and Amparo, had ridden the wave of the coffee boom and was experiencing a pronounced decline in revenue generation; coffee production had moved into new areas of the state where the soils were not yet exhausted. The gap between the wealthiest and the least wealthy of the seven municipality cases narrowed from a five- to sevenfold per capita difference in the empire to a two- to threefold revenue gap in the republic. This still meant,

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however, that even in this highly privileged corner of Brazil, the wealthiest communities produced double or even triple the per capita revenues on their local economies compared with the less prosperous communities through the republican period. The difference in revenue generation derived in part from the different rates municipalities chose to apply to the various economic activities supplying their resource base. We know from chapter 2 that each municipality wrote its own posturas, and that these were not derived from a blueprint. They were locally produced documents that reflected the characteristics and concerns of each municipality. The municipal tax codes, usually published as a section of the posturas, were also distinct from one another. We saw earlier that in the empire, only 10 to 25% of tax categories were common across most of our cases. The balance of these was either unique to a municipality or shared by one or two others. The difference in revenues, then, derives from the variations in taxable elements of individual economies. Some of the difference, however, is a product of differing rates on similar goods and services between municipalities. In 1865, for example, São Carlos charged 5 milréis for a license to operate a general store, while Amparo charged 10, Rio Claro charged 12, and Araraquara charged 20 milréis. It was less expensive to get a business license for a tavern in Amparo (2 milréis) than in São Carlos (15 milréis). A notary public paid an annual fee of 20 milréis in Araraquara, but just 10 milréis in Amparo. Araraquara charged drovers 20 to 40 milréis per trip into town, while Amparo and Rio Claro charged by the head (500 reis and 320 reis, respectively). This variance in tax rates between municipalities was true up and down the tax code and across time. A butcher paid 5 milréis to keep a guard dog in São Carlos in the 1870s, while his counterpart in Campinas paid 10. In fact, Campinas charged the highest rates of any municipality for many services and businesses in that period. For his license, a dentist in Campinas paid three times (30 milréis) what his peers did in the other municipalities. Taverns, hotels, and inns (30 milréis) paid between three and five times more for their licenses. On the other hand, Campinas’s itinerant peddlers paid very little to ply their wares (10 milréis) compared with other municipalities: Amparo’s peddlers paid 50 milréis if they were a resident, 200 if they were not. A tax on goods in transit was more important in the municipality of Franca than in any of the other municipalities. Franca’s economic livelihood relied on its position as entrepôt along the major trade route connecting southern Brazil to the Minas Gerais mining region.

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The variances in tax rates assessed by municipalities persisted throughout the republican period. During that time, for which we have detailed comparable codes for Ribeirão Preto (1894, 1924) and Rio Claro (1893, 1923), we find a broad gulf between annual taxes charged to local businesses and professions.53 Lawyers paid more for their annual license fee in Rio Claro (100 milréis) than in Ribeirão (65 milréis) in 1894, but butchers paid more in Ribeirão (50 milréis) than in Rio Claro (30 milréis). Leather tanneries and ice factories also paid more in Ribeirão (60 and 50 milréis, respectively) than in Rio Claro (30 each). Dentists and engineers, however, paid less in Ribeirão (65 milréis each) than in Rio Claro (100 milréis apiece). By 1924, the rates had increased anywhere from three to five times for all categories of business in both municipalities, but some of the differences between their rates grew even more pronounced. A tannery in Ribeirão Preto now paid 300 or 600 milréis per year, depending on the size of the shop and whether it used a mechanized process, whereas all tanneries in Rio Claro paid just 70 milréis. A butcher in Ribeirão paid more than three times the rate for his license (200 milréis) than did his counterpart in Rio Claro (60 milréis). The sources are silent on the reasoning behind the tax rates charged in each municipality, but they are clear on the most important aspect for our purposes: what to tax and by how much were products of decisions made at the local level by municipal councils. Despite being situated in the wealthiest region of Brazil and producing most of the coffee consumed globally, these seven municipalities could generate revenue only from the effect of the coffee boom on local economic activity, principally its multiplier effect on domestic businesses, professionals, and services arising from consumption, itself derived from rising fortunes. Their reliance on taxation of the local economy for revenue to fund public services left these communities with vastly different abilities to provide for their population. This difference in ordinary revenue per capita, absent any other source of funding like loans or subventions, meant that the amount of money municipalities had available to invest in infrastructure, health, safety, and education per citizen was different by a factor of as much as 7 to 1 in the empire and 3 to 1 in the republic.

Conclusions From its independence in 1822 until its nominal introduction of an income tax via modest and ineffectual reforms in 1922, Brazil’s fiscal struc-

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ture relied almost exclusively on indirect taxes. This review of the trends in government revenue generation across the first major political regime, the Brazilian empire of 1822– 89, shows that most of these revenues were captured at the national level by the general government. Its most important source of funds was a tax on imported consumer goods that declined in its relative contributions until the end of the century. While the import taxes were not necessarily regressive, the interior taxes that increased to make up for their shortfall were more likely to be so. However, the responsibility for providing the public goods and services commonly associated with improvements in human welfare and standards of living was not the responsibility of the general government, so the relationship between these revenues and the role of the modern fiscal state was inconsequential. The investments in public education, health, safety, and infrastructure that promoted improved standards of living were the primarily the obligation of the municipal governments. These were similarly funded by indirect taxes that fell squarely on the circulation of people, goods, and services. A property tax, systematically levied and properly collected, certainly would have contributed to public revenue and might have contributed to improvements in public welfare. The inequalities caused by Brazil’s fiscal administration were complex. Allocation of revenue across all levels of government created a structure that hurt local governments’ ability to fulfill their extensive mandate to provide public goods to their citizens. The regressive nature of indirect taxation meant that the burden of financing the local state fell disproportionately on those of modest means. To be sure, the rich paid a substantial share of the taxes to the province, which relied on wealth and transfer taxes such as an inheritance tax, the head tax on slaves, and the transfer tax on slave sales. The wealthy also periodically supported local governance through gifts and donations in times of need. But in most years and in most places, local revenue generated through taxes and fees on the daily transactions of urban life fell the hardest on those with the least. The capture by the national and state governments of the most lucrative sources of revenue ensured that municipal revenues perpetuated socioeconomic inequality between communities even in the wealthiest region of the country.

chapter four

Nickels and Dimes Funding Municipal Projects If the municipal statutes were organized with attention paid to progress and to the growing needs of the future, providing the municipality its own independent means, the municipality would not be imploring the province for ridiculous sums to have a vein of potable water, a few meters of roadway, or repairs to an insignificant bridge.1

I

n 1884, the municipality of Franca appealed to São Paulo’s provincial legislative assembly for money to fund a project it desperately needed but could not afford: a new bridge over the Sapucaí River. This bridge was part of the highway system linking the municipality to the prosperous neighboring province of Minas Gerais. Franca’s economy depended on its strategic position as a supply depot along the well-traveled trade route between Brazil’s southern provinces and the mines of Minas. Yet this vital bridge was often in disrepair due to frequent flooding during the rainy season, which impeded trade. To make matters worse, it had been built by a private party that allowed passage for what the municipal council called “an exaggerated toll.” This meant that travelers were subject to service interruptions as well as elevated costs, both of which harmed Franca’s commercial connection to nearby towns and trade with the neighboring province. The municipal councilors requested that the provincial assembly authorize and fund the construction of the new bridge. It did so by appealing to the assembly’s “zeal for the well-being of the Province.” The councilors guaranteed that a new bridge would “grant to commerce and to the entire public all the guarantees they lack.” They also assured the assembly that the gains from reconstructing this bridge would extend beyond improving trade between Franca and Minas Gerais; the province’s entire northern region would benefit, generating the “gratefulness of the people.”2

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The motive for the appeal was simple: Franca, like all Brazilian municipalities, was broke. As we saw in chapter 3, the structure of public revenue in nineteenth-century Brazil disproportionately benefited the central state. Municipal governments were the most disadvantaged of the three levels of government, because they were tasked with providing extensive public services yet received the smallest share of all public revenue, just 5% at the end of the empire. This percentage averaged around 14% in the republic, an improvement, but as this chapter will argue, still insufficient to support extensive mandated services. Chapter 3 showed that municipalities relied exclusively on indirect taxes and fees on local goods and services to generate the revenue required to invest in public services. This chapter shows that those sources were not enough for the task. Franca’s appeal for a bridge was just one of a stream of appeals submitted to the provincial assembly that year. Without the bridge, local commerce would falter, and without local commerce, municipal revenues would suffer. Franca, like all municipalities in nineteenth-century Brazil, got by on the nickels and dimes raised through its patchwork of local taxes, fines, and user fees. These insufficient revenue sources impeded the municipality from financing the public services and capital improvements it was legally mandated to provide. The poor state of local governance has usually been attributed to the cronyism and patronage that pervaded— and, many would comfortably argue, still pervades— Brazilian politics. The few studies of municipal governance paint a picture of local strongmen raiding the community treasury to further their political interests, thereby depriving their people of the funds that were rightfully theirs. From another perspective, local officials are depicted as weak men, low on the patronage ladder, who could not or would not advocate for more funding for their town out of either ineptitude or an unwillingness to confront the bosses to whom they owed their position.3 If the municipalities of São Paulo are any guide to the lived experiences of all Brazilian municipalities in the nineteenth century, then the patronage-as-hindrance thesis needs reconsideration. Municipalities did not seem to benefit from strong ties to provincial leaders, even though those leaders stocked municipal jobs with their clients. In addition, the steady stream of their requests for supplemental funds shows that municipalities were not hampered by weak-chinned, ineffective administrators. Instead, it appears that the poor allocation of public revenue among the three levels of government created a system in which local officials tried desperately to adhere to their legal mandates. Using municipal financial statements, official correspondence between

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municipal and provincial authorities, and annual reports by municipal intendants, this chapter examines the various tactics municipal leaders used to supplement their meager funds, including subvention appeals, requests for loan authorizations, and, finally, incurring debt. Municipal revenues were not enough to pay for needed public services, a persistent shortfall that left major public works, including projects related to public health and safety, unfunded or incomplete while administrators scrambled to fulfill their duties. Despite the gains in wealth across the nineteenth century, financial resources fell short of needs because of the structure of the tax system, which drained off the most lucrative sources of public revenue for national and, to a lesser extent, provincial administrations. To fill the gap between financial sources and public needs, São Paulo’s municipal councils resorted to almost always unsuccessful appeals to the provincial legislature for supplemental funding that would satisfy their mandate across time and space. This scenario played out consistently, time and again, in wealthy municipalities and modest ones, leaving local government compromised in its ability to attend to the basic public services it had promised its citizens. Such failure undoubtedly perpetuated the political cronyism and heightened the sense of ineptitude of local administrations, ensuring that public services could not substantially improve the standard of living or quality of daily life in Brazil’s scattered urban settlements.

Insufficiency of Funds in the Empire As discussed in chapter 2, the constitution of 1824 and the ensuing legislation established the municipal council’s extensive responsibilities to provide public services, but failed to specify revenue sources to fund them. This simple omission set up a century of tension over sources of revenue and how they were to be used. The only direction offered to municipalities by the 1828 regulatory law was that in times of prosperity, municipal councils were to expand charitable organizations, while in lean times they were to prioritize spending according to the most urgent need. These councils were specifically prohibited from raising money through loans or levying taxes that competed with provincial or national revenue. They were tacitly permitted to use rental income on municipal property and fines for infractions of municipal ordinances. However, these modest revenues were subject to intense scrutiny by the provincial government. The Additional Act of 1834 had stripped away the autonomy of municipal gov-

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ernance assured in the constitution and replaced it with formal subordination to the provincial legislative assembly. Specifically, it gave provincial legislatures complete authority over the municipalities’ economy, budget, and employees. It even gave legislatures the right to expropriate municipal property. The province assumed the paternalistic role of benevolent patron, inviting municipalities to venture their opinions on matters directly affecting local daily life, but allowing and approving only what it deemed best.4 This close oversight of municipal administration— and, more important, municipal finance— continued until the fall of the empire in 1889. How were municipal administrators supposed to fulfill their mandate under such financial constraint and institutional oversight? Financial statements provide the most important source for understanding the challenges they faced in trying to provide public services. Facilitating comparative research is the empire’s tendency toward centralization and control, which ensured a standardization of these statements. A law passed in 1836 required councils to submit annual budgets and balance sheets— in a standardized format— to their provincial legislative assembly for approval. For revenue, councils were to include the amount collected and the pertinent fiscal year, the amount that went uncollected in the current fiscal year, the accounts receivable likely to be paid, and those that should be written off. For expenses, councils included detailed accounts of expenses and expense categories, the year in which the expenses were incurred, and the nature of accounts payable.5 In short, the financial statements tell us how much municipalities had to spend and what they spent it on as well as whether the incomes and outflows were for the current fiscal year or represented overdue payments from previous years. Complementing these statements were official correspondence and annual reports revealing the magnitude of the shortfall between sources and uses and the dire need for financial assistance.6 Although municipalities differed in population, economic base, wealth, and geographic location, they submitted the same financial statements, lodged the same complaints of insufficient tax revenue to meet annual expenses, and expressed a pronounced frustration with provincial authorities— the presumed operators of the political machine— over inadequate responses to their pleas for funding. The paltry allocation of public revenue for the municipality is evident in the financial statements submitted by every municipality to the provincial legislative assembly for approval, which read as a collection of nickels and dimes. Indeed, from the handwritten ledgers capturing the thousands of entries comprising municipal revenue in a given year, we can

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visualize the procurador, or tax collector, walking the main streets of the settlement to gather those payments. As we saw in chapter 3, the most important sources of revenue for most municipalities in empire and republic were license fees and taxes on local businesses and professionals. They included imposts on warehouses, alcohol, animals for slaughter, shops, taverns, apothecaries, marketplaces, dry goods merchants, calibration of weights and measures, entertainment, and industry. They were paid by the business owner at rates minutely detailed in each municipality’s ordinances, and were certainly passed along to customers through pricing. Other sources of revenue came from the sale or lease of municipal properties and fines for infractions of municipal ordinances, including monetary sanctions levied on truant municipal councilors who failed to show at scheduled meetings. Only toward the end of the empire did municipalities add taxes on rental property income and agricultural products. For the first sixty years after Brazil’s independence from Portugal, revenue to pay for municipal services came primarily from daily economic and social interactions. During the empire, these financial accounts were minutely scrutinized at the provincial level by a multilayered bureaucracy. The financial statements and cover letter were submitted to the provincial president, who presented them to the legislative assembly. There, the accounts were passed to the Committee on Municipal Council Accounts and Budgets for review. The committee examined the accounts and issued a parecer, or opinion. It could choose to approve the accounts, return them to the municipality for modification, or reject them and demand a new submission. The volume of documents flowing between municipalities and the provincial legislative assembly (in one archive alone, 280,000 documents spanning sixty-two years) represents a staggering amount of time in clerks’ offices, council meetings, committee deliberations, and assemblies.7 All this oversight was brought to bear on what amounted to, at its height, a mere 5% of total public-sector revenue. The following documents from 1853 exemplify a typical exchange between municipality and province: To the Most Illustrious and Most Excellent Sir, Doctor Jozino [sic] do Nascimento Silva, most dignified President of the Province: The Municipal Council of the City of Campinas has the honor of submitting for Your Excellency’s consideration the included balance sheet of revenues

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and expenses of the municipality in the year concluded on 31 December of the year 1852, as well as that of the Fábrica da Matriz, the Novo Imposto, and the budget of revenues and expenses for the year 1854, that should be presented to the Provincial Legislative Assembly through Your Excellency’s intermediation. God keep your Excellency for many years. Palace of the Municipal Council of the City of Campinas in extraordinary session of 3 February 1853.

To which the committee replied: The Committee on Municipal Council Accounts and Budgets examined the balance sheet of revenues and expenses of the Council of the City of Campinas pertaining to the fiscal year of 1852 and verified it to have had revenues in the amount of 1:867$791 including the balance from the prior year, its expenses of 1:820$991 leaving a balance in the quantity of 46$800 that the Committee judges to conform and is of the opinion that they be approved. Dated 6 March 18538

This provincial review was repeated every year for each municipality, but was by no means cursory. The Committee on Municipal Council Accounts and Budgets returned sloppy work to be revised and resubmitted. Municipalities failing to submit their accounts by the legally stipulated deadline incurred fines (further reducing their limited revenue) and received sternly worded lectures. Others were rebuked for bad math or questionable accounting. To take another example from Campinas, we see that the accounting committee went over these documents carefully, comparing historical accounts and annual budgets to the actual revenues and expenses reported in the balance sheets. The following opinion from 1845 indicates several instances of irregularities:9 The Municipal Council Accounting and Budget Committee [of the provincial assembly] having examined those of the City of Campinas found the following st

doubts: 1 that previous budgets consigned to the Inspector the annual gratification of 130$ rs [yet] appeared in these accounts [illegible] as 142$500 r. This gratification, without a reason that justifies such [illegible] other amount also happened regarding the gratification of the Guard that having negotiated [a payment of] 50$ r appears in the accounts in the amount of 60$ rs of payment, while the earlier budgets give a quantity of 16$ rs. The committee also notes that as regards the revenue account, having collected in the year the amount

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1:665$959 reis the Attorney should have the quantity of 99$957 reis as his percentage. . . . However in the account one sees this expense elevated to 105$526. It is the opinion of this committee that the referred-to council [revert payment to] the regular quantities. Excess of payment to the Inspector

12$500

Ditto

ditto

Guard

10$000

Ditto

ditto

Guard’s aide

24$000

Ditto

ditto

Attorney

Sum to be annulled:

5$569 52$069

This overage of 52 milréis amounted to 2.5% of the 2,438 milréis expended that year. The provincial assembly’s budget committee performed this review for more than one hundred municipalities each year. Public servants’ salaries like the ones referred to in this example consumed one-quarter to one-half of the municipal budgets in most years, reaching as high as two-thirds of revenue in the earliest days of the municipal administration, and averaged between 25 and 30% of total spending for most municipalities across the empire (table 4.1). These were legally established stipends for the town tax collector, municipal secretary, and the municipal building guards, gravedigger, cemetery manager, slaughterhouse veterinarian, and public market inspector. Larger towns like Campinas employed more than a dozen municipal employees to inspect, guard, and manage municipal property. According to the scholarship on nineteenth-century Brazilian politics, it is these municipal positions that point to patronage in public service, but the example from the city of Campinas above shows that municipalities were unable to overpay their public servants even when they tried to. If Campinas was seeking to throw a little more money the municipal attorney’s way or to top off the stipend of the town guard, it was unable to do so. The provincial legislature’s scrutiny acted as a check against such overpayment. This is not to say the appointments themselves and the stipends that went with them were awarded on merit rather than cronyism, but the possibility for rent seeking appears to have been limited by provincial oversight. Besides salaries, public works comprised the most significant category of expenditures. By the end of the first decade after a parish town

5.1 1.3

Miscellaneous Debt Service 100.0

11.1

88.9

29.8 37.2 0.3 21.4 0.1

Araraquara

100.0

2.2 2.3

95.5

14.4 67.8 5.4 7.8

Campinas

100.0

7.5 6.5

86.0

27.2

27.0 31.8

Franca

Source: ALESP Império Municipal collections, 1835– 89. Note: This table incorporates budgeted and actual figures. See table 4.2 for the balance between the two types of source.

100.0

93.6

Subtotal, % total

Total

25.5 57.9 5.6 4.4

Salaries Public Works Public Health Public Safety Education

Amparo

table 4.1 Major categories of expenditures in the empire, 1835– 89 (percentage of total)

100.0

5.3

94.7

42.1 37.5 4.8 10.3

R. Preto

100.0

3.6 2.4

93.9

24.5 60.3 0.3 8.8

Rio Claro

100.0

7.8

92.2

28.0 50.6 2.3 11.3

S. Carlos

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was elevated to the status of municipal seat, its salary expenditures as a proportion of total spending always fell, while spending on public works tended to rise. Its public works department was responsible for maintenance and upkeep projects, such as repairing streets and bridges, repairing or repaving sidewalks, cleaning and repairing the public water fountain, weeding public spaces, and maintaining the public corral. Some municipalities’ financial reports included the costs of building and maintaining public cemeteries, markets, and slaughterhouses. Public works consumed between one-third and two-thirds of municipal spending during the empire. Expenditures on public health (costs for a disease outbreak) and public safety (costs to arrest and incarcerate prisoners) were entirely unpredictable, predicated as they were on illness and criminal activity. Spending on health tended to be a bit lower than spending on law and order. Because municipalities were legally unable to spend more than they brought in, the spending patterns show that towns paid for what they had to— salaries— and then used what was left over to cover the most urgent needs (table 4.2). In years without much crime or disease, maintenance and upkeep projects were favored. In years where judicial costs were unusually high or disease required the construction of an isolation hospital and purchase of medicine and supplies, upkeep projects were deferred. Even with these attempts to control spending, deficits abounded. The stress of multiple crises or major capital investment requirements that exceeded revenues was starkly expressed in the annual reports and official correspondence between municipal councils and the provincial legislature. It is in these reports and letters that the magnitude of the imbalance between municipal revenues and the mandated responsibilities of town councils becomes clear. For example, as the mayor of Franca handed over the municipal administration to a new council in January 1873, he implored the newly seated councilmen not to blame him or his council for the state of the town but to understand that the sad state of affairs was the result of the near-total lack of resources during his term. He inherited a “great deficit,” which was compounded across the years by revenues that did not cover expenses. He wrote, “While the municipal council of the past four years had good intentions, it could do little to the benefit of municipality because the circumstances in which it found the coffers upon accepting its mandate were precarious. Since its revenues were little, there was nothing it could do to improve the state of the municipality.”10 The report’s section on public works, which in other towns and under

1797 1821 1832 1845 1857 1865 1874

1835 1835 1836 1846 1858 1866 1878

First balance sheet 56 56 55 45 32 25 12

Possible observations 38 46 27 37 29 15 6

N 14 18 16 12 11 2 0

Surplus 9 22 9 11 8 6 0

Deficit

0 0 0 1 4 0 0

Balanced

15 6 2 13 6 7 6

Budget only

Source: ALESP Império Municipal collections, 1835– 89. Note: Date of first balance sheet is fiscal year-end, which determines the number of fiscal years for that municipality in the empire. N is the number of financial statements and budgets I found for each municipality. By law, budgets had to balance. In reality, municipalities recorded either a surplus or a deficit, and only occasionally balanced their revenues and their expenditures. The Surplus and Deficit columns reflect this bottom line. Where “Budget only” is indicated, the only record available is the ex ante budget.

Campinas Franca Araraquara Rio Claro Amparo São Carlos R. Preto

Founding date

table 4.2 Incidence of surplus and deficit in municipal finances, 1835– 89

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better circumstances served as the place municipal leaders engaged in shameless self-promotion, was little more than a list of the projects in most dire need: an interurban road, a bridge over a major river, improvements to a rudimentary sewer system, and a public water fountain. This and later reports show that the city muddled through by not paying administrators’ salaries in full and by delaying payments to public works contractors. In Franca’s 1880 mayoral report, Florentino Ferreira Franco made an unfortunate appearance on both lists; he was a public servant whose salary went unpaid and also a contractor who was owed money. The report lists the same unrealized public works projects cited in the 1873 report as the municipality’s top priority.11 Indeed, reports across municipalities were primarily concerned about the scarcity of resources to pay for essential municipal services like streets, sanitation, water control, disease abatement, clean water, and public safety. Contemporary observers blamed this problem on centralized control over municipal finance. Characteristic was the lament from one critic, João de Azevedo Carneiro Maia, who considered the municipal law of 1828 “exorbitant in its burdens, some impertinent, others impossible to execute . . . without taking the precaution of creating the indispensable means to finance so many and such complicated services.”12 He was particularly struck by the 1834 Additional Act’s instruction that councils prioritize their spending when times were lean. He wrote, “If the legislator recognized the insufficiency of funds he had facilitated, why did he not open up a more abundant source of income that allowed the municipal coffers to move beyond the strictly necessary expenses from the beginning?”13 The provincial assembly placed the municipality in the position of what Maia termed “primitive dependency” by requiring it to beg the province for funds that the assembly routinely approved, rather than simply giving the councils the means to meet their financial needs.14 Begging was a ritualized exercise repeated annually by every municipality, but contrary to Maia’s understanding, the appeals were not routinely approved. Those that were approved shuffled through a multiyear process of repeated petitioning, and were often paid out at a discount from the original request. This exercise in frustration permeates the official correspondence between municipality and provincial assembly. Municipal councils submitted annual reports to the provincial legislative assembly detailing their greatest needs and the means they thought best to address them.15 The appeals were required by law, so it is possible that some could represent mere instances of resource-grubbing hyperbole and

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opportunities to secure pork. Reading these appeals in the context of municipal financial statements, however, makes it clear that the need was real and the frustration was palpable. The vast majority of appeals were for individual public works projects that exceeded annual revenue by orders of magnitude. A selection of appeals captured in table 4.3 lays out the imbalance in stark figures. Each request for funds is shown in the context of that year’s revenue and the surplus or deficit that remained once operating expenses were satisfied. The real value of these numbers matters little in this exercise. What is of interest to us is the relative value: the cost of a fountain in Campinas in 1857 was greater than the sum total of all revenue collected in that year. Bridge repair and drainage of stagnant water in Franca in 1868 were budgeted at a cost less than total revenue, but more than double the surplus that remained after ordinary expenditures were made. Amparo’s revenue table 4.3 Sample of subvention requests to the provincial legislative assembly (nominal milréis)

Municipality

Year of request

Capital project

Amount requested

Amparo Amparo Amparo Amparo Amparo Amparo Amparo Amparo

1858 1859 1860 1866 1870 1872 1880 1887

Church Cemetery Bridge construction, road repair Road repair Jail Interurban road Jail and municipal headquarters Jail (completion of revised project)

6,000 500 3,500 500 10,000 20,000 30,000 11,650

541 786 930 3,395 7,072 7,876 17,758 29,630

Campinas Campinas Campinas Campinas Campinas Campinas

1857 1870 1871 1880 1886 1887

Water supply (fountain) Jail Street lighting Bridge, jail, and road projects and repairs Jail construction and repairs Two bridges

5,000 80,000 10,000 90,000 70,300 2,200

4,841 32,947 29,725 145,424 289,448 224,242

Franca Franca Franca Franca Franca Franca

1857 1868 1873 1877 1887 1889

Water supply, bridge construction Bridge repair, drainage of stagnant water Water supply Water supply (fountain), jail Piped potable water, road and sewer repairs Street repairs

2,425 1,200 6,000 24,912 26,000 8,000

1,167 2,835 2,572 5,874 13,864 19,250

Ribeirão Preto Ribeirão Preto Ribeirão Preto Ribeirão Preto

1878 1884 1885 1887

Jail and municipal headquarters Church, water, fountain, ferry boat, bridge Jail and municipal headquarters Potable water

2,000 29,000 15,000 10,000

1,730 2,433 6,608 n/a

Source: ALESP Império Municipal collections, keyword search pedido, various years.

Annual revenue

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in 1870 was nowhere near enough to pay for the municipal jail. Ribeirão Preto’s multiple capital projects in 1884 outstripped projected revenue by a factor of 12. These figures show that appeals for extraordinary funds to pay for single projects often exceeded the municipality’s total revenue in a given year, and, with only two exceptions across the decades, always outstripped the year-end surplus. Comparing the cost of these capital improvements to the sum total of annual revenues provides clear evidence that the taxes and fees on which municipalities depended to pay for public services were not enough for the task. Moreover, the process included repeated appeals for money for the same project and years-long gaps between requests and fulfillment. This runs contrary to the standard notions of indifferent or inept local administration, pointing instead to a flawed fiscal system in which local councils made a concerted effort to secure resources to supply their towns and cities with the urban structures and services they were charged with providing. It also runs contrary to a version of history in which patronage benefits flowed down to local bosses and their clientele, for this experience of requesting subventions was shared across all municipalities throughout the entirety of the empire.16 The appeals for provincial funds had three purposes. The first and earliest purpose was to request money to establish the seat of the municipality in the urban hierarchy by building its representative structures: the church, municipal headquarters, and jail.17 Because these buildings required large outlays of money, usually far more than a municipality raised to pay all its bills combined, town councilors turned to provincial subventions to fill the need. Such aid, however, was not assured. In a typical request, the newly elevated settlement of Amparo submitted an emotional appeal in 1858 in an attempt to obtain funding for its cathedral.18 Construction of the church had been under way, but works were stalled due to insufficient funds, the “tiredness on the part of the people to support it,” and the need to construct the municipal headquarters and jail at the same time. This four-page appeal asked the assembly to decree a “sufficient quantity to at least pay for the church,” a wattle and daub construction left open to possible ruin for lack of a roof.19 The community had endeavored to repair the modest chapel that was to serve as the main church, but once the repair costs outstripped those for a new building, it began to build a new church. At the same time, the municipality faced the competing need to also build a jail, along with the possibility of ruin for the church in progress as it weathered the elements.

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At this juncture, after great local efforts at self-sufficiency and exhausting all other possibilities, Amparo’s council appealed to the provincial authorities for the money to finish the construction. The cost, an estimated 6,000 milréis, was more than ten times the municipality’s projected revenue in that year. The letter closed as follows: This municipal council hopes that you, legislators of a Christian people, will give serious attention to the sad state in which the religious cult of this village finds itself due to the absence of a temple that is merely comfortable and decent.20

Amparo’s request was denied. Two years later it redoubled its efforts, writing of the “urgent need” to salvage the damaged work in progress on the church. All it asked was for “a temple of any quality, but comfortable and capable of offering services.” The urgency rested in the soul of the community: “It is not possible that this Villa continue in the state it is in, without suffering harm to the Religion whose practice so influences our social customs.”21 A third request for money in 1863 indicates that the appeals still had not been met.22 Such appeals for money to help construct churches and jails were usually couched in terms of concern for the communities’ moral health and safety, or pitched as monuments to the progress and stature of the municipality. The Amparo municipal council wrote to the provincial assembly in 1880 to press its case for the jail and municipal headquarters it still urgently needed, twenty-two years after having been elevated to municipal status. The building it was using for both jail and meeting place was a house that had been privately acquired by a few citizens “in the remote past” that no longer served its purposes. “It is absolutely worthless, lacking in security, comfort, and hygiene for the prisoners, and decency for public service.” The letter’s tone quickly descends from logical appeal to reprimand, calling the assembly’s response “disgraceful,” considering that “we are talking about the headquarters of one of the most important regions of the Province.” “Everything Amparo has,” it continues, “was raised at the cost of private initiative without placing any burden on the government.”23 A full six years passed before the provincial budget committee wrote an opinion supporting the funding in the amount of 23,000 milréis, but subsequent correspondence shows that the government paid only part of it, just over 16,400 milréis. As this was insufficient, the council countered with a new appeal that the province pay the bal-

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ance of 11,650 milréis, but the province refused.24 On the eve of the republic, Amparo was still wrangling over essential buildings and unable to get satisfaction from the provincial legislature. The Campinas municipal council had a similar experience in attempting to obtain funding for its town jail. It had requested 80,000 milréis for the project in 1870, but in 1871 was turned down by the finance committee of the provincial legislative assembly, “considering that that city possesses a good jail and that the financial circumstances of the province cannot support such an expense.”25 In 1880, when the Campinas council repeated its request in a letter to the assembly, it expressed its frustration over a string of failed attempts to obtain funding, exclaiming in outrage that the existing building, a source of great shame for its inadequacies, had been paid for entirely with private funds. The letter continues: “On February 24 of last year, as in prior years, this request was raised to our noble assembly, and even though this municipality is one of the best wellsprings of the public coffers, it has not received the aid it should from the public powers.”26 In 1886, the municipal council noted that it had advocated for this project for almost twenty years, and appealed once more to the patriotic provincial assembly to provide its funding, “bestowing upon the municipality, which has contributed so much to enrich the public coffers, this improvement . . . of incontestable utility.”27 Yet a petition for funds in 1889 indicates that the money had not been committed. This appeal, which includes a mention of local entrepreneurship, notes that the Campinas municipal council secured the donation of property “in magnificent condition” to construct the building and expressed hope that the provincial assembly would take this action as a good-faith contribution by the municipality toward finally building the jail.28 The fall of the empire disrupted the final resolution of this case. Sometimes, municipalities succeeded in their appeals and had the funding authorized in the province’s annual budget law. Even then, however, the provincial treasury did not always disperse the funds, or released an insufficient amount, thus perpetuating the ceaseless cycle of groveling. Take the case of Franca. In 1877, its municipal council requested that the provincial president intervene on its behalf to ask the provincial legislature to budget money to complete Franca’s jail and continue work on its public water fountain, “works already begun at the cost of the Province.” In the accompanying direct appeal to legislators submitted with this request to the president, the degree of neglect becomes clear. The jail had been begun twenty years earlier, and had received no funding in “more

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than six years.” According to the petitioners, the building was in peril of ruin, threatening to waste the great sums already invested and potentially costing even more to repair.29 Like the experiences of other municipal leaders, Franca’s were left to their own devices to remedy the problem. As in all other cases, local notables were pressed to make private donations out of civic duty to compensate for the absence of meaningful local revenue sources and for the failure of the provincial government to remedy this structural flaw. Similarly, in 1885 Ribeirão Preto’s municipal council appealed to the provincial legislative assembly for funding to construct the municipal jail and council headquarters, money that had been authorized but never disbursed: “this amount that was voted by the Assembly in last year’s session for the same purpose, but which was not received.”30 This appeal was based on the inadequacy of two private houses the council had been renting, one that served as the jail and the other as the venue for jury sessions, council meetings, and public meetings. The appeal apparently did not succeed, because the council submitted yet another request for funding in 1886. This time, the frustration was evident. The petition complained about the elevated rent the council paid out of pocket for a couple of rooms that were inadequate for their current function, owing to their compromised hygiene and security. It highlighted the urgent need for better accommodations for a growing municipal population worthy of better from its provincial legislators.31 The second purpose for a municipal council’s appeal for provincial funds was to address the economic health of the municipality, usually through roads and bridges to facilitate the circulation of goods and services. Similar to an appeal for funding municipal buildings, this economic petition involved a sum of money beyond the tolerance of local revenue, and was usually strung out in a maddening bureaucratic process that left local needs unfulfilled. Amparo’s 1860 funding request for a bridge spanning the Jaguary River to link Amparo to the neighboring settlement of Belém well exemplifies this type of appeal: “It is of the highest utility for reciprocal commerce between these two important and new settlements.”32 In 1884, when the provincial legislative assembly authorized the money to repair the road between Amparo and Sorocaba and to construct a shortcut, it justified the funding by citing the savings in transportation; the new route would “reduce the distance between these two cities to five leagues.”33 A brief and polite request to the legislative assembly from the mu-

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nicipal council of Campinas in 1887 asked for funds to pay for two new bridges to improve transit with two neighboring cities: “These roads being heavily trafficked, the bridges become of indispensable necessity.”34 A more urgent plea the same year sought funding to replace a bridge that had collapsed due to heavy rains: “The bridge over the River Atibaia on the export road of this municipality having fallen, [has been] very prejudicial not only to the private interests of the plantation owners of that region but also to those of the Province.” The council requested “a sufficient amount for the construction of a solid bridge in the same locale as the old one.”35 Earlier, in 1869, the council’s request for 13,000 milréis for three bridge projects and two road projects had been made in the name of “improvements in the works related to communications” between Campinas and its surrounding neighbors.36 Similarly, its 1876 request for money to construct a bridge and to complete construction on a road had appealed to the gains for commerce; both transportation investments would run along the export route taking Campinas’s coffee to port. According to the council’s request, the road was already carrying more than 300,000 arrobas of coffee in its current state.37 So great, in fact, was the volume of this traffic that the council noted that it “dispenses with commentaries about the need” for these projects.38 Franca’s 1884 request for aid to construct a new bridge, referenced at the beginning of this chapter, was also justified by appealing to the municipality’s economic health, detailing how the bridge would improve regional transit for the circulation of goods and services: The bridge crosses the Rio Sapucahy, 30 kilometers from Franca. Right now there is a bridge that is no good and subject to periodic destruction by the great floods of the rainy season, with great harm to travelers in general and principally for commerce. Aside from this, because the bridge is private property, its owners demand an exaggerated toll. This state of things has gone on for not a few years, and the complaints [from citizens] call the Câmara’s attention to this monumental subject. We urge the Provincial Assembly, zealous in the well-being of this Province, to attend to our cries creating means to construct another bridge on the banks of the same river in order to ease the wrongs and give to commerce and to the public all the guarantees that they now lack, incurring the gratitude of this public. Construction of this bridge over the important Sapucahy river will not affect only the interests of this municipality and those of Batatais, but also those

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of Ribeirão Preto, Cajurú, Casa Branca, Santa Rita do Paraizo, Uberaba, Sacramento and Goyaz, for the bridge will constitute a communications link between all these points, and between this and other Provinces. Given this, the Council hopes to have its complaint addressed and with this expectation anticipates the homage of popular thanks.39

This appeal is a classic example of the rhetorical devices used by town councilors in this official exercise, but it was fraught with complications. If the infrastructure-related appeal was for a road or a bridge located near the border with another province, securing funds became more difficult. In 1854, an official report from the provincial Committee on Public Works regarding the construction of a bridge in Franca had not favored allocating the almost 80,000 milréis that the project would cost. It cited the drain on public coffers, but also noted that due to Franca’s location on the border that São Paulo province shared with with Minas Gerais and its centrality to interprovincial trade, the bridge would be “of great utility to the provinces of Minas Gerais, Goiás, Matto Gross, and Bahia.” Thus, the committee was of the opinion that the provincial president should ask the imperial government for the funds.40 As with appeals for municipal buildings, insufficient local sources for funding major capital projects was a common theme in these requests. Amparo’s municipal council asked for the relatively modest sum of 500 milréis in 1866 to pay for road repairs between it and a neighboring town, “seeing as how the municipal coffers do not have sufficient funds to meet all the needs of the municipality.”41 An 1889 petition from Franca’s council for 8,000 milréis to pay for street repairs throughout the city was similarly based on the “deficiency of revenues.” This time, the councilors reminded the members of the provincial legislative assembly that many of them had visited Franca and therefore had firsthand knowledge of this “urgent necessity.”42 Yet, as noted earlier, even if provincial authorities voted to commit the funds, it was no sure bet that the money would arrive. Ribeirão Preto’s municipal council requested provincial money to pay for the construction of a bridge in 1884, money that had already been passed into law, but the funds were never disbursed by the provincial treasury.43 The third purpose for a municipal council’s appeal for provincial funds was to provide for its citizens’ basic human needs: public health and safety. Municipal councils asked for substantial sums to provide their people with drinking water. The appeals ranged from 1,500 milréis for a public fountain to 100,000 milréis for piped potable water. It is difficult to hear

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anything but pleading and desperation in these municipal requests. The settlements had begun small, with a few thousand souls, but the arrival of the railroad in the last decades of the nineteenth century brought in migrant and immigrant populations drawn to the expanding coffee economy. The communities’ swelling population strained their existing water networks, which sometimes consisted of little more than a natural spring and an open ditch.44 These requests for water systems demonstrate the greatest pressure that the inadequate structure of public revenue allocation placed on the daily life of Brazilians. The earliest water requests came, predictably, from the oldest municipalities. In 1857, the municipal councils of both Campinas and Franca asked for money to finance public fountains, which were desperately needed and too costly to pay for out of local funds. The Campinas appeal noted that “the city . . . does not have one single fountain to supply its entire population with water.”45 Franca related a similar lack of this “most indispensable” need.46 Such requests dwarfed total municipal financial sources. Accordingly, Franca’s request was driven by “the lack of pecuniary resources,” because “its current municipal revenues will be absorbed by projected expenses in every year,” such that taking on a major capital project would be impossible.47 The fountain cost 1,500 milréis, but Franca’s total revenue for that year was less than 1,200 milréis. No provincial funds resulted from this request for a fountain, so in 1859 Franca spent some of its revenue to pay a man to dig a wood-lined ditch connecting the spring to the village to increase the settlement’s water supply. A few years later, the municipal council petitioned for another 6,000 milréis from the provincial treasury to bring clean drinking water to the town; it received half the requested amount. To put this in perspective, the money received from the provincial treasury was almost identical to the 3,300 milréis Franca would bring in years later, via all its sources of revenue, during the 1872/73 fiscal year.48 It would have been impossible for that municipality to construct the fountain out of its own pocket, and yet the provincial funding proved insufficient to complete the job. Consequently, the town made another appeal just a few years later.49 A cry of penury in an era of plenty characterized Franca’s 1887 petition for 6,000 milréis of provincial funds to pay for piped potable water. Addressing the provincial assembly, the municipal councilors wrote, “This council is forced to turn to Your Excellencies for this aid, because the revenues of the municipality go to satisfying, with difficulty, the other expenses that are indispensable.” They noted that the municipality contrib-

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uted considerably more to provincial coffers than it received in aid from the provincial assembly— a not-too-subtle reminder that the region was experiencing economic gain from which the municipal administration did not benefit directly, due to the fiscal structure of the Brazilian state.50 In other words, the municipal administrators were doing their mandated job of promoting economic growth in Franca, but realized that such growth was being constrained by infrastructural bottlenecks they could not begin to remedy themselves: the fiscal resources at their disposal were simply not enough for the task. In 1871, Campinas’s councilors used a combination of arguments— municipal poverty and contribution to provincial wealth— to persuade the provincial assembly to fund public safety by paying for improved street lighting. Their appeal begins with an explanation that annual rains had destroyed the municipal streets, and that repair of those streets consumed more than two-thirds of Campinas’s annual budget. It argues that the citizens of Campinas desired public lighting, and that the municipal council had taken provisionary measures, albeit inadequate ones, to provide this service. It then reaches for the goal: Considering that the municipality, the richest of the province thanks to the great exportation, one that contributes the most to the wealth of the public coffers, considering that this city has never had important aid up to the present from the public powers; considering that this . . . improvement [is] so important in a city that tries to bring the emporium of Commerce of the Center; considering finally that Your Excellencies in the spirit of rectitude and justice should distribute equally the aid of the public coffers, resolve to ask this august assembly for a subvention on 10:000$ to aid the illumination of this city, and awaits with confidence [to receive] this concession given that it is just and is of the public interest.51

Although this appeal predated the height of the coffee boom that later generated tremendous wealth in Campinas and the province of São Paulo, Campinas was already an important coffee exporter and was the largest and most important municipality in the hinterland, sporting a robust and diversified economic base. Its councilors’ claims of great contributions to the public coffers were well founded. Ribeirão Preto, emerging as the other major economic powerhouse in the province of São Paulo, was in no better position than Campinas when it came to obtaining provincial revenue to pay for myriad public works.

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In this soon-to-be richest of the coffee counties, minutes of its municipal council meetings were filled with unmet needs. The minutes recorded councilors’ deliberations as they identified problems and proposed solutions. The main areas of concern included collapsed bridges, impassable roads, inadequate jail facilities, and public health threats. The council regularly formed subcommittees to inspect public works in order to suggest remedies, with the intention of appealing to the provincial legislature for financial assistance.52 Ribeirão Preto’s municipal council forwarded two such appeals in order to supply the settlement with potable water. The first, in 1884, asked for 4,000 milréis to channel water to the settlement and deliver it to consumers via public fountains.53 A second appeal in 1887 asked for 10,000 milréis to “promptly address one of the most urgent needs of this villa— piped potable water— the lack of which with the growing population has burdened its inhabitants with great difficulties.”54 Authorization to release 4,000 milréis to pipe water to the village of Ribeirão Preto came in 1888, four years after the first request and one year after the second. The provincial authority authorized only the originally requested 4,000 milréis, not the 10,000 milréis of the revised request, despite the fact that the municipality was experiencing explosive growth.55 Ribeirão Preto’s population had doubled from approximately 5,000 in 1874 to 10,000 in 1886, and would reach almost 60,000 by 1900. Certainly, the largesse bestowed by the provincial legislative assembly was no longer enough to supply the much larger population with potable water. However, the hard-won subventions to help pay for municipal infrastructure and public services were not unimportant in the context of total provincial outlays. These subventions, included in the annual budgets of provincial expenditures, directed financial aid to municipalities for all the reasons discussed above: to support poor prisoners and to build and repair jails, hospitals, roads, bridges, churches, and cemeteries. The funds for these categories disbursed to all the municipalities in the province accounted for more than 25% of provincial expenditures in 1850 and rose to one-third by 1871. Yet by the 1880s, they had fallen sharply to no more than 11% of provincial expenditures (table 4.4). If the fiscal structure of the Brazilian state was built on the expectation that provincial treasuries would supplement local revenue for these charitable and infrastructural investments, the decline in these subventions guaranteed a major setback to the municipalities. To compensate for the drop in subventions in the last decade of the empire, municipalities increasingly incurred debt to meet their financial

37.0%

Subventions, % of expenditures

28.6%

32.4%

712,000 2,198,246

10,000 40,000 33,000 542,200 86,800

1871/72

11.5%

420,000 3,654,101

20,000 100,000

30,000 20,000 250,000

1880/81

9.4%

460,000 4,917,475

460,000

1888/89

Source: Elaborated by the author from provincial budgets. São Paulo, Coleção de leis, Lei 40 (1844), Lei 27 (1849), Lei 413 (1850), Lei 16 (1867), Lei 45 (1871), Lei 156 (1880), Lei 55 (1888).

18.5%

122,703 428,356 16.4%

159,910 977,667

67,500 365,783

8,000 20,000 6,500 82,810 32,600

1867/68

179,600 485,043

70,200 5,200

10,000 800 36,503

1850/51

Total subventions Total expenditures

12,000 30,000 800 24,700

1849/50

10,000

47,600

79,000

8,000 45,000

1844/45

Poor prisoners Jails Hospitals Roads Bridges Church/Cemetery Misc. public works Misc. undefined

Budget year

table 4.4 São Paulo provincial subventions to municipalities (nominal milréis)

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needs. However, it was illegal for them to contract debt during the empire without the express permission of the provincial legislative assembly, so any locality seeking to raise a loan or issue a bond to pay for a major capital project had to submit a request. All told, the province approved 105 loans between 1836 and 1889. A review of loan approvals shows that these requests became increasingly common late in the imperial period, a time when provincial authorities began admitting that they were experiencing financial hardship, and also when formal capital markets were developing, making such loans possible. Consider that just four municipal loans were approved for all municipalities in São Paulo in the thirty years between 1836 and 1865. This number grew exponentially thereafter: 16 loan approvals were recorded in the ten years from 1866 to 1875, another 20 in the five years from 1876 to 1880, and 65 between 1881 and 1889.56 This surge of loan authorizations in the waning years of the empire— more than 60% of all loans authorized since the advent of provincial oversight— has to be seen as a manifestation of the growing inability of the provincial treasury to attend to the municipalities’ financial requests. Almost all these loans were used to pay for the same types of projects for which municipalities had requested subventions: piped potable water, sidewalk construction, materials and payroll to build a church or repair a jail, funds to expropriate lands to build a slaughterhouse, and so on. Some of these requests were modest: 1,000 milréis to help the village of Monte Mor pay past-due bills, 5,000 milréis to pay for a new jail in the village of Indaiatuba. Others were huge: 200,000 milréis for the Paraíba Valley town of Guaratinguetá to improve its supply of potable water, 1 million milréis for the port city of Santos to pay for “urgent works that cannot be delayed.”57 Table 4.5 details the approved loans for our seven municipalities. Total loan authorizations varied a great deal from year to year, depending on the number and value of requests made to the provincial legislative assembly, but trended toward dramatic growth in loan size. Take the comparison between the two years with the most loan authorizations during the 1880s. Authorizations in 1881, when 18 separate municipalities were granted permission to borrow to pay their bills, totaled almost 1.2 million milréis and averaged just under 66,000 milréis per loan. In 1889, next highest in the number of loan authorizations, 14 loans were approved for a total of 3.5 million milréis and an average of 249,000 milréis per loan. In 1881, one of every two loans authorized was valued at 10,000 milréis or less, and just one loan was valued as high as 500,000 milréis. In 1889, just one in five loans was valued at 10,000 milréis or less, and two loans were

34 24 60 47

52 5 42 43 126 130 31 32

13 2 5 84 194

1866 1873 1873 1875

1877 1879 1879 1881 1881 1881 1884 1884

1887 1889 1889 1889 1889

Franca Araraquara Amparo São Carlos Campinas

Rio Claro Amparo Campinas Rio Claro Campinas Rio Claro Campinas Campinas

Campinas Campinas Rio Claro Campinas

Municipality Fountain Church Water, fountains, cemetery Fountains, slaughterhouse, paving Public market Water and fountains Church Water and fountains Debt service, public works Public market Slaughterhouse Debt consolidation on church loans Bridge Water, street paving Water Water Water

Project

12,000 15,000 100,000 50,000 2,000,000

10,000 40,000 50,000 50,000 250,000 6,000 150,000 400,000

20,000 100,000 22,000 50,000

Loan value

General revenues General revenues

9% imposto predial

From treasury

Special tax

Special revenues General revenues General revenues

Special tax

Backing

12% bond 8% bond 8% bond

10% loan 10% loan 10% loan 10% loan 10% loan 6% loan 10% loan 8% bonds

10% loan 10% loan 10% loan 10% loan

Type

Source: ALESP, Acervo Histórico, Império, pesquisa de documentos, keyword search empréstimos. Http://www.al.sp.gov.br /geral /busca /BuscaDocumentosImperio.jsp, accessed June 5, 2017.

Lei no.

Year

table 4.5 Municipal loans authorized by the São Paulo provincial legislative assembly (nominal milréis)

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valued at 1 million milréis or greater. Small loans had become scarce, while sizable loans to fund major infrastructural projects were increasingly the norm. A modest deflation occurred during the 1880s, making the growth in loan values in the last couple of years even greater than nominal figures indicate, but the general story is reflected in the nominal values (table 4.6).

Municipal Finance in the Republic By the end of the empire in 1889, after a decade or so of heightened criticism over municipalities’ lack of autonomy that led them to experience financial shortfalls, reformers sought to redress the imbalance of power by reinstating full autonomy to the municipal councils. The 1891 federal constitution, along with the São Paulo state constitution and ordinary law, was firmly grounded in the commitment to municipal autonomy. Each appeared to be a significant departure from the highly centralized control that characterized the empire. The reality is somewhat different, however, at least in regard to funding sources for the municipal budget. First, municipalities did not have total autonomy over revenue sources despite constitutional guarantees. The 1891 federal constitution listed specific revenues for federal and state, but made no provision for municipal revenues. In practice, these were derived from the states’ revenues. This meant that the states did, in fact, have some control over municipal finance. Second, the list of municipal revenue sources established in the São Paulo state law of 1891 replicated the financial streams of the empire, codifying rather than augmenting municipal revenue sources. There were two important exceptions to this situation. The first was the allocation of Industries and Professions taxes from the State of São Paulo to the municipalities. As we saw in chapter 3, Industries and Professions rates, which were levies on every conceivable economic actor and activity, were claimed by the states in all of Brazil except for São Paulo and two others. These taxes were by far the most important category of public revenue in São Paulo, and contributed 22% of municipal revenues in the republic on average. The second exception was the municipalities’ new ability to incur debt. Provisions in the 1891 law and subsequent revisions allowed municipalities to borrow money from domestic and foreign lenders, provided that the sum of annual amortization and debt service payments did not exceed one-quarter of the average value of municipal

18 1,184,000

Total number Total value 12,600

5 63,000

2 3

1883

122,500

6 735,000

2 1 1 1 1

1884

100,200

5 501,000

1 2 1 1

1885

59,400

5 297,000

2

2 1

1886

19,900

5 99,500

2 2 1

1887

258,286

7 1,808,000

1 2 1 1 1 1

1888

249,429

14 3,492,000

1 1

3 4 3 2

1889

Source: ALESP, Acervo Histórico, Império, pesquisa de documentos, keyword search empréstimos. Http://www.al.sp.gov.br /geral /busca /BuscaDocumentosImperio.jsp, accessed June 5, 2017.

65,778

9 5 1 2 1

≤10,000 11,000– 49,000 50,000– 99,000 100,000– 499,000 500,000– 999,000 1.0– 1.99 million ≥2.0 million

Average value per loan

1881

Loan value/year

table 4.6 Loan authorizations, 1881– 89 (number per year, nominal milréis)

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revenues.58 These loans did not constitute revenues per se, but they did alter the face of municipal finance by offering municipalities a means to raise capital to invest in infrastructure and public services. These became so important to municipal finance that they distort the importance of everyday taxes, fees, and fines to revenue. If we exclude the weight of the new access to loans to supplement municipal revenue sources, for example, the contribution of Industries and Professions to municipal revenues in the republic doubles to 44%. If we look at the data for the seven municipalities and the state as a whole, we find that municipal revenue per capita from the local economy did increase substantially under the republican fiscal regime, thanks primarily to the newly granted right to collect taxes on industries and professions (see table 3.8). A precursor to Industries and Professions had existed in the empire in the form of taxes and licenses to businesses. Most of those fell on merchants, however. The tables detailing the Industry and Professions rates Ribeirão Preto established in 1894 (examined in chapter 3) reveal an extensive array of specific taxes on all manner of economic activities. The document runs to fifteen manuscript pages and details taxes that generated between 30 and 40% of the municipality’s ordinary revenue. As we saw, every conceivable profession from itinerant vendor to attorney and architect paid a tax, as did every type of factory. In fact, there were different taxes on sugar mills depending on whether they used steam engines, humans, or animals as their motor force, the latter two paying half the rate of the former. The Industries and Professions rolls were similarly comprehensive in other municipalities, designed to extract all possible resources from the municipality’s economic activity. They were the single most important source of revenue for all seven municipalities. The enhanced revenue sources during the republic initially had a positive effect on municipal finances. Real per capita revenue from taxes, fees, and licenses jumped from the 1880s to the 1890s, increasing by double or more in every case but Campinas, already wealthy in the 1880s, and growing fivefold in the case of Ribeirão Preto. This growth is especially impressive considering that of the seven municipalities, Ribeirão Preto also recorded the greatest increase in population from 1886 to 1900, far outstripping the population growth for the state as a whole (table 4.7). Revenue continued to grow in real terms through 1915, before the wartime economic difficulties set in. The ensuing decline, a product of escalating inflation, persisted into the 1920s. Its high but receding rates after 1926 allowed per capita revenue to rebound from its 1918 value, but revenue

17,325 9,559 41,253 10,040 10,420 20,133 16,104 1,221,380

34,192 28,900 67,694 15,491 59,195 31,891 55,729 2,279,608

47,713 48,119 115,602 44,308 68,838 50,416 54,225 4,592,188

Source: Camargo, Crescimento, vols. 2 and 3, tables 14, 15, and 16. Note: 1928 is interpolated from Camargo’s population figures for 1920 and 1934.

Amparo Araraquara Campinas Franca R. Preto Rio Claro São Carlos SP state

1928 43,284 58,860 125,440 53,410 76,111 53,439 52,736 5,644,267

97% 202% 64% 54% 468% 58% 246% 87%

40% 67% 71% 186% 16% 58% (3)% 101%

1900– 1920

1886– 1900

1920

1886

1900

Population growth rates

Population

table 4.7 Municipal population and growth rates, 1886– 1928

(9)% 22% 8% 20% 11% 6% (3)% 23%

1920– 1928

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in 1927 was not much higher than it had been in 1906, when a coffee valorization program to protect planter incomes had been put in place, and average real per capita revenue generated by local economic activity in the 1920s exceeded that in the 1900s for only two of the municipalities, Ribeirão Preto and Campinas. Thus, revenues grew by orders of magnitude from the days of the empire, but did not thrive across the republic. The enhanced revenues from the addition of Industries and Professions immediately sparked more ambitious spending programs to provide long-desired “improvements,” such as upgraded lighting systems, comprehensive water and sewer systems, and sophisticated road construction (all explored in chapter 5). These improvements indicated that the financial constraints of the empire were both real and undesirable from the perspective of the local political elite. But unanticipated expenses continued to plague municipal administrators, revealing that the new financial regime was still insufficient to meet the demand for public goods. The 1896 Statistical Yearbook for the State of São Paulo noted these two tendencies in its annual summary of several of the municipalities: The municipal council of São Carlos do Pinhal presented a deficit of 162 con­ tos [more than half of its revenues of 297 contos] due to the epidemic that reigned there and obligated the municipality to [undertake] enormous expenditures. . . . Some municipalities, stagnant for a long time, have recently taken on great development and have initiated important works for local improvements and for this reason presented deficit in their budgets. [The municipalities] of Bragança, Brotas, Franca, Mocóca, São José do Rio Pardo, and Sorocaba fall in this category.59

Municipal reports confirmed this assessment. They complained of unusually heavy rains washing away recently completed streets, or outbreaks of disease straining municipal finances. As a result of these unanticipated crises, finances continued to fluctuate in the republic as they had in the empire, falling into deficits as often as not. Of the seven municipalities in this study, just one recorded more surpluses than deficits in its current accounts. Considering just ordinary revenues and ordinary expenditures, Rio Claro either recorded a surplus or balanced its books in two-thirds of the years for which we have data. The other municipalities fared far worse. Deficits outnumbered surpluses and balanced books about half the time in Amparo, Franca, and Campinas; three to one in Araraquara and São Carlos; and more than four to one in Ribeirão Preto.60

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table 4.8 Loans as percentage of municipal revenues, 1894– 1928

Amparo Araraquara Campinas Franca R. Preto Rio Claro São Carlos SP state

Total no. financial statements 1894– 1928 28 21 28 24 28 25 27 34

No. years recording loans

Loans, % municipal finance 1894– 1928

Loans, % municipal finance in years with loans

Largest single loan, % municipal finance

Year

5 12 7 13 22 9 10 34

2.5 27.6 12.8 31.7 25.0 11.7 23.6 23.6

15.1 40.3 45.6 53.8 27.8 22.3 42.1 23.6

23.9 73.6 66.2 85.8 75.8 70.9 77.6 64.4

1913 1912 1911 1912 1910 1913 1910 1908

Source: Elaborated by the author from published financial statements. São Paulo, Anuários estatísticos, balanços de receitas e despezas, 1894– 1928.

With no recourse to loans in the empire, municipalities turned to the provincial legislative assembly for subventions. In the republic, they turned to the capital market. Loans, now legally permitted, became the salve for municipal financial woes. While the Industries and Professions taxes were the most important source of ordinary municipal revenue in the state, the new ability to raise loans without securing approval of the state legislature made this an equally important source of municipal finance. Loans averaged 23% of municipal finances in the state of São Paulo between 1894 and 1928 (table 4.8). The founding of the São Paulo Bolsa, the stock and bond exchange, in 1895 promoted this new recourse to borrowing. In the late 1890s— and at an accelerated pace after 1900— municipal loans for public works were securitized and traded on the exchange.61 Borrowing among all municipalities was especially pronounced in the years between 1906 and 1913, a boom period for the municipal bond market. In those eight years, loans contributed from 20 to 61% of all municipal finance. When credit requirements were more modest— say, to cover cash flow problems rather than undertake a major capital project— municipal leaders continued to turn to private sources for credit. Annual mayoral reports sometimes listed the names of individuals who lent money through organized loan issues. Table 4.8 shows that borrowing was a common recourse for most of these municipalities. Ribeirão Preto borrowed in 22 of 28 years for which we have data, Franca in 13 of 24 years, Araraquara in 12 of 21 years, and São Carlos in 10 of 27 years. These loans made up a substantial propor-

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tion of municipal finance when averaged across the republic, and an even greater proportion when averaged across just the years when loans were recorded. For most of the municipalities, loans in the borrowing boom years were worth almost as much as ordinary revenue. Yet even when taking loans into consideration as resources available to the municipality to cover expenditures, they were not enough to cover the shortfall. Loans reduced the number of deficits, but did not eliminate them entirely. The municipalities’ ability to raise loans provided financial autonomy, but came with a tether. The 1891 ordinary law allowed municipalities to receive credit and contract loans “to meet the needs of municipal public works,” so long as the debt service did not rise above one-quarter of revenue, using a three-year running average in the denominator.62 Presumably, the law included this limitation to keep municipalities from falling into a debt trap. Thus, debt service levels, especially in the context of this limitation, serve as a proxy for republican willingness to fund public goods, just as funding complaints were the proxy in the empire. Debt service (interest payments plus amortization of the principal) in any given year as a percentage of preceding three-year averages for revenue confirms what the earlier analysis suggested: São Paulo’s municipalities relied heavily on debt finance (table 4.9). In fact, on many occasions their annual debt burdens exceeded the maximum allowable limits under the law. Average debt burdens (annual debt service as a percentage of annual revenue) fell at or below the 25% mark for the entire period except for São Carlos, but the three-year average debt burden exceeded 25% of revenue on many occasions, rising as high as 45% or more of total revenue.63 The 1891 ordinary law limited the proportion of debt service to reve­ nues, that is, the municipality’s potential to repay the loans out of its annual income. We now turn to the relationship of debt service to expendi­ tures, or the proportion of spending on interest and principal compared with spending on other categories. Over time, debt service became the second-largest consumer of municipal funds after, and directly related to, spending on public works (see chapter 5). This was the direct result of the chronic mismatch between municipal revenues and the improvement plans of municipal administrators. The need to cover budget shortfalls or to pay for major projects beyond the annual revenue stream sent administrators to the capital markets to raise money through bond issues. The amount of municipal funds spent on servicing these loans grew to dominate the balance sheets. For most of the municipalities, the rise in borrowing that generated the rise in debt service mainly took place between 1910

2.4 0.8

0.7

9.5 0.7 19.0 19.6 6.8 2.6 0.4

1900 11.1 0.8 21.9 30.5 24.7 0.0 11.7

1906

1915 37.7 17.7 15.0 44.9 35.6 16.6 17.0

1911 25.3 78.4 10.8 6.3 16.1 40.5 15.6

29.5 30.2 12.8 31.3 36.8 13.7 40.6

1920

19.7 22.7 26.8 19.6 42.1

21.3

1928 28 21 28 24 28 25 27

# obs 8 4 5 7 9 6 12

Annual debt service >25% annual revenues

21 22 14 21 20 15 30

Average debt service % revenues 1894– 1928

Source: Elaborated by the author from published financial statements. São Paulo, Anuários estatísticos, balanços de receitas e despezas, 1894– 1928. Note: Debt service is amortization of the principal plus interest payments. Figures are debt service for the year in the header divided by three-year average revenues ending with date in the header. For example, debt service paid in 1928 is as a percentage of 1926– 28 average revenues. Bolded values indicate where debt service exceeded legal limits. Annual debt service is annual debt service divided by same-year revenues.

Amparo Araraquara Campinas Franca R. Preto Rio Claro São Carlos

1896

table 4.9 Debt service as percentage of three-year average revenues (nominal milréis)

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and 1912, when economic expansion resulted from the coffee valorization program of 1906, whereby the State of São Paulo financed the purchase of excess coffee to hold it off the market in order to support its price. This policy protected the incomes of the coffee sector and prevented that area from experiencing the negative price effects caused by overplanting. It also led to a loosening of the credit markets.64 Statewide, the peak years for debt service as a percentage of expenditures were from 1910 to 1920. While much borrowing was specifically to pay for large capital projects like water and sewer or lighting networks, over time it was increasingly done just to cover the bills. If we look at every instance of borrowing in the republic and compare it to the deficit recorded in the same year, we find that just six of the fifty-six total loans recorded by the seven municipalities were for purposes other than paying the bills. Four of these loans were contracted in years that recorded a surplus (probably taken out for capital projects rather than to meet cash flow needs). Another two exceeded the value of the deficit by orders of magnitude, indicating that they were for purposes other than to merely cover the current account deficit. The mandated right to incur debt, then, more often than not skirted the provision that it be incurred in funding major public works. Rather, indebtedness was a function of revenue shortfalls. We know this because the detailed financial reports located in municipal archives tell us so. Franca’s loans, for example, often came from a private party and were incurred quarterly as the need arose. In 1909, Ribeirão Preto’s municipal council approved a loan for two million milréis, backed by municipal revenues, because its finance committee determined that the enormous debt incurred by the previous mayor prevented future revenues from covering projected expenses. The council voted to float a bond that would refinance past debts and raise enough money to pay for a new slaughterhouse, while doubling tax rates on businesses located outside the urban perimeter.65 In 1914, Amparo’s municipal council authorized the mayor to contract a loan of 30,000 milréis, “to complete the payment of the second installment on the debt service of the loan for 1300 contos” in a year when the municipality’s debt burden approached 40%.66 Ribeirão Preto’s loans in 1927 and 1928, which no doubt contributed to debt burdens of 32% and 27% in those respective years, were for “paving, revenue anticipation, and installments due on past paving.”67 These debt burdens demonstrate that financial resources available to municipal administrators were insufficient to cover the costs of running, maintaining, and improving the municipal space.

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Conclusions When we consider the financial resources available to municipal administrators to fulfill their mandated responsibilities, it is difficult to argue that municipal councilors governed with indifference to the public administration of local welfare. The historical record attests to a chronic shortage of funds that might have been enough to fund the predictable expenses, so long as they were modest, but were usually insufficient to fund extraordinary or major projects. In the face of this shortfall, municipal administrators used other means at their disposal to augment the financial resources. In the empire, this meant submitting appeals to the provincial legislative assembly to fund the basic services they deemed essential to the economic and social well-being of their communities. In the republic, this meant deficit spending and contracting loans to pay for public works. Despite their apparent autonomy during the republican era, under neither regime did municipal governments have the financial resources to cover the expenses of local administration. The volume of appeals during the imperial era reveals how inadequate local sources were for providing the fundamental infrastructure of urban life. It also indicates how local administrations remained subordinate to the provincial government. These problems immediately and directly affected Brazilians’ quality of life at their first point of interaction with the state. They also demonstrate how little the system of patronage and clientelism affected the financial aspects of municipal life. If local elected officials in average-to-large communities— those experiencing rapid economic and demographic growth in a province that was politically and economically ascendant— could not capture the necessary funds to invest in infrastructure and social overhead capital, we can reasonably assume that governance in smaller municipalities or in poorer regions of Brazil fared worse still. Municipal finance in the empire shows that municipalities had far more mandated responsibilities to provide local public goods than they had revenue to pay for them. Even though the municipalities showed occasional surpluses, the evidence from their councils’ appeals to the legislative assembly compared with the municipal balance sheets shows that these projects could not be financed through local revenue. The actions taken by municipal councils to appeal for funds to finance large public works projects suggest that local administrators sought to meet the needs of the municipalities despite the limited resource base.

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Beginning in the late empire and continuing in the republic, debt replaced subventions as a means to cover the gap between ordinary revenues generated through an extensive host of regressive taxes, fees, and fines and the expenditures required to maintain and expand public services. The shortfall required municipal administrators to make decisions about how to spend their scarce resources. The next three chapters examine how financial straits shaped spending decisions by the administrators in three key areas: physical infrastructure, public health, and cultural life. Together, they offer a picture of the difficult choices faced by municipal leaders, and also reveal what they prioritized in times of financial crisis.

chapter five

Bricks and Mortar Building Essential Infrastructure To the most illustrious and most excellent President and Members of the Legislative Assembly of the Province of São Paulo: There are so many taxes, whether General or Provincial, that municipalities have difficulty finding taxable material to increase their revenues, and in doing be able to attend to the many and important services in their responsibility. Taking this into consideration, the Municipal Council of S. João do Rio Claro, desirous to promote the improvements that most interest its municipality, in the session of 8 February, resolved to request of this Assembly that the Provincial tax on buildings of this municipality revert to the favor of the municipality’s coffers.1 S. João do Rio Claro, 12 February 1877 — Request from the municipal council of Rio Claro to the provincial legislative assembly, 12 February 1877 [Public lighting] continues to operate with the usual imperfections.2 — Intendant’s report, Franca, 1903

I

n 1832, in a fit of local initiative and the glimmering spirit of municipal autonomy, a group of men formed the Common Good society to attend to matters of public and religious life in their small but growing settlement of São João do Rio Claro. The needs of this parish were being neglected by the municipal seat of Constituição (modern-day Piracicaba), which the members of the Common Good sought to remedy. Immediately, the society took on the characteristic actions of a municipal government: it wrote statutes that established the construction of a church as its first priority, followed by other public works that would serve the public good. The society oversaw the sale of lots from land donated from one of the colonial sesmarias, or land grants, to raise money for the church. It appointed a procurador to collect donations for the construction, hired a contractor, and by the end of 1832 had named the eight streets comprising Rio Claro’s urban footprint. The society negotiated with contractors,

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the local priest, and the district judge to get the best deal for the church construction, move and enlarge the cemetery, and build a local jail. It was effective at establishing Rio Claro’s essential public and religious infrastructure, root elements for it to thrive. By 1844, the parish was raised to the status of villa, and in 1845 it became a municipality.3 This story of Rio Claro’s growth from sesmaria to settlement to parish to village to municipality was repeated across Brazil as the population expanded and sought new lands to acquire and farm. When settlements grew, they could petition to break away from their municipal seat to establish a new administrative district. It was in this manner that São Paulo’s municipalities increased from 40 at independence to 89 by 1872 to more than 250 by 1930.4 As settlements grew into municipalities, they accumulated all the responsibilities of the municipal mandate. First among those was to tend to the basic urban infrastructure of the municipal seat. Therefore, some of the oldest and most enduring forms of investments were in the bricks and mortar of the municipality. As we saw in chapter 4, public works comprised the most important category of spending by municipal councils in Brazil’s first six decades as an independent nation. In the early years of every municipality, only salaries consumed more of its annual expenditures, but the weight of salaries declined as the municipalities developed and expanded. Over time, a municipality’s resources increasingly went to physical infrastructure. The municipal councils’ appeals to the provincial legislative assembly for supplemental funds highlighted the types of public works projects municipalities wanted to pursue but often could not afford— public water fountains, bridges, streets and roads, municipal headquarters, jails, and so on. When revenue was insufficient to meet the unanticipated needs brought on by a public health or public safety crisis, investment in these public works projects was routinely deferred. Such uncertainty introduced sizable swings into investments in public works, yet this was the area of spending that the citizenry depended on the most to go about daily life. Public works in the empire focused on providing the basic infrastructure essential to the circulation of goods and services. Because of the newness of these settlements, which had attracted their first settlers between 1773 and 1857, their focus on bricks-and-mortar projects to serve residents and enterprise was both logical and necessary. In addition, the emphasis on basic infrastructure was all the more important given the municipal fiscal endowment. Municipal finances depended on local commercial transactions, making the circulation of goods, people, and services critical to fis-

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cal health. Once the basic skeleton of these modest settlements was laid out, public works spending focused on expanding existing services and providing new ones. Lighting and water and sewer systems were installed, streets were paved, markets and slaughterhouses were constructed. By the end of the nineteenth century, swelling populations and new ideas about urban life eventually turned planners’ attentions to the beautification of public spaces, as we will see in chapter 7. The municipalities’ capacity to deliver these major projects was predicated on their revenue, which, as we saw in chapters 3 and 4, was drawn from the local economy. The differential revenues produced by the taxes, licenses, and fees generated widely varying levels of investment per capita. Of the seven municipalities in this study, for most of the nineteenth century, Campinas was in the strongest financial position from generating funds from the circulation of people, goods, and services. It also had the largest, most diversified, and most dynamic local economy of the seven. Other municipalities that benefited early on from the coffee boom, Rio Claro and Amparo, were also able to generate the revenue that allowed them to invest in physical infrastructure. Indeed, spending per capita on public works was the greatest in these three municipalities in the empire. In the 1870s and 1880s, Campinas outspent the least endowed municipalities by factors of 10 to 1 and 15 to 1 on a per capita basis (table 5.1). Rio Claro and Amparo outspent them by as much as 7 to 1. These differences

table 5.1 Public works spending per capita, 1835– 1928 (nominal and real milréis)

Amparo Araraquara Campinas Franca Ribeirão Preto Rio Claro São Carlos Highest/ Lowest Highest/ Middle Second lowest/ Lowest

1830s

1850s

1870s

1880s

1890s

1900s

1910s

1920s

0.052 0.088 0.031

0.645 0.108 1.146 0.240

2.740 1.274 3.959 2.332 2.677 2.337 2.511

4.109 2.053 4.204 2.707 1.606 1.559 2.679

2.018 4.936 4.211 1.666 3.290 1.405 2.425

2.728

0.005 0.053 0.002

3.1× 1.6× 1.8×

2.7× 1.6× 1.0×

3.5× 2.0× 1.2×

3.6× 2.1× 1.0×

9.9×

0.154

0.668 0.118

1.301 0.463 3.585 0.682 0.242 1.273 0.781

5.0× 2.9× 1.7×

10.6× 4.8× 1.1×

14.8× 4.6× 1.5×

3.248 1.581 5.714 1.626 2.760

Source: Elaborated by the author from manuscript and printed financial statements. ALESP Império Municipal collections, 1835– 89; São Paulo, Anuários estatísticos, 1894– 1928, balanços de receita e despeza; Camargo, Crescimento, vols. 2 and 3, tables 4, 5, 6, 14, 15, and 6; Relatório Bookwalter, 9. Deflator is Catão, “A New Wholesale Price Index,” and Haddad, “Growth,” 1913 = 100. Note: Spending is nominal for 1830s and 1850s, real after 1870. All spending is actual except for 1870s and 1880s Campinas, 1880s São Carlos, and 1880s Ribeirão Preto, which are budgets.

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in spending on public works narrowed in the republic, but the top revenue generator per capita continued to spend the most on public works in per capita terms. For much of the time, that continued to be Campinas. By the end of the republic, though, Ribeirão Preto was emerging as a wealthy community with far more resources than the other municipalities, and it poured those resources into public works. Araraquara, one of the oldest municipalities and consistently among the lowest producers of the seven cases in the empire, invested the least per capita in essential infrastructure until the 1910s. Rio Claro, which had expressed the exuberant civic sprit that opened the chapter and which was one of the top revenue generators and investors in the empire, fell to last place in both categories by the 1920s as the vibrancy of its coffee economy faded. This chapter looks at the evolution of investments in public works projects beginning when settlements were founded, constructed, and expanded in the empire, and continuing into the municipality’s increased role as provider of public goods in the republic. The public works transition— from work by the common hand (by which locals interested in the improvement contributed to its finance) and donated labor from local notables to municipally provided, funded, and staffed institutional services— was emblematic of the worldwide rise of the fiscal state in the nineteenth century. In Brazil, it had unfolded fully by the end of the empire. The reports, requests, and minutes generated by municipal administration clearly show that the public increasingly expected the municipality to provide these services, and demanded expanded or improved public goods.

Public Works in the Empire We know from the subvention appeals discussed in chapter 4 that municipalities struggled to build the basic infrastructure required of them. Every settlement when raised to the status of municipality had to invest in three institutional structures: the main church, the municipal headquarters, and the municipal jail. The 1874 minutes from the first meetings of the brand-new municipal council of Ribeirão Preto show how the limitations of public finance hindered this foundational work of public administration.5 After the inaugural meeting in the home of the president, José Gonçalves dos Santos, council members began to establish the buildings, laws, and finances of their new municipality. The minutes from the second meeting record the creation of a public works commission and a finance

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committee. The public works commission was tasked with demarcating the locations of the jail and the church. The finance committee was to report revenues and expenditures, formalize salaries for employees, and present the council president and secretary with a key to the coffers. In the third session, councilors named the streets and asked the public works commission to indicate locations for the public corral and slaughterhouse. In the fourth, they decided on the location of the main square, jail, and other installations. The fiscal agent handed in forty-two milréis he had collected, the total revenue of the young municipality. The works committee then reported that the provisional jailhouse needed one hundred milréis’ worth of repairs, which included putting bars on the windows. Thus, in its very first act of public finance, Riberião Preto was already in arrears. As was common in the early days of public administration, a local notable paid for those repairs out of his own pocket. In the fifth meeting, the council decided on furniture for its meetinghouse and jury. And so it went. Public works and finance committees dominated the meetings, identifying infrastructural needs and the means to pay for them. Ribeirão Preto’s experience was shared across the province. Other municipalities spent the majority of their revenue on the same projects as need arose and funds allowed. Franca’s public works expenditures for the 1840/41 fiscal year went entirely to repairing the building that served as the jail.6 In 1872/73, almost half its budget went to repairing the three municipal structures.7 The meetinghouse, jail, and church were the starting points of municipal life, but other major capital projects provided the municipal lifeblood and consumed much of the councils’ attention. The roads and bridges connecting municipalities and making the flow of people, goods, and services possible were the earliest and most consistent concerns of municipal public works. Franca’s request to the provincial general assembly for a subvention to construct a bridge, which we read about in chapter 4, could have come from any of these municipalities. In fact, in one of Franca’s earliest financial reports from the 1830s, the entire budget for public works went to bridge repair.8 Minutes from Rio Claro’s municipal council meetings in 1863 and 1864 recorded bridge-related business on multiple occasions, all regarding the need to construct or repair the bridges that led to the municipalities of Araraquara and Brotas and the parish of Itaquery. In some deliberations, officials drafted petitions for financial aid from the provincial government. In others, they discussed whether it was better to repair the bridges in bad shape or to build replacements.9 When the bridge over the Ribeirão Preto River needed repairs, labor was supplied

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by the common hand, while the council picked up the costs for the wood planks.10 The council later petitioned the province for funds to reconstruct another vital bridge, this one over the Rio Pardo, and additional funds for a boat to cross a river to neighboring Batatais. These were just two of many such petitions; neither one was approved.11 The financial straits of the province meant that responsibility for essential infrastructure fell to the municipalities, while a recurring theme in municipal documents was the lack of money to pay for it, at least not without provincial support. We know from annual budgets and financial statements that the provision of public works was a mundane business in nineteenth-century Brazil. Funds went to weeding the streets and public waterways; eradicating the massive anthills that were and still are ubiquitous in the São Paulo countryside; and attending to the myriad repairs of the physical infrastructure, such as opening up new streets as the settlements expanded, paving roads, building sidewalks, constructing and repairing bridges, digging and lining the simple ditches that carried potable water from springs to fountains, and filling potholes. Campinas, the oldest of the seven municipalities, spent its inaugural budget for public works on building a municipal corral for the slaughterhouse, repairing streets, and building sidewalks. It painted; repaired gates, buildings, and public fountains; installed and maintained a public clock; filled potholes; and hung lanterns. These services were typically outsourced to contractors. Araraquara’s financial statements from the 1830s show that its small public works budget went to paying day laborers to clear weeds from the ditch that channeled water to the city’s fountains. Franca’s financial statement for 1859 likewise shows spending for a laborer to build a waterway to the city’s fountain, as well as for the five dozen boards needed to line the ditch. As municipalities matured, their public works projects grew in number and complexity. Campinas’s balance sheets for the 1860s show much higher public works expenditures than the decade before, usually to pay a contractor for services related to various construction, repair, and upkeep projects. An itemized financial statement from the 1868/69 fiscal year shows that the municipality made payments to Francisco de Camargo Penteado for the macadam paving on Rua Direita; two separate payments to citizen Joaquim Texeira Nogueira for various other streetpaving projects, including construction of a new street and installation of sewers on that street; a payment to Engineer Constatino for overseeing public works that year, with additional payments for transporting materials from Santos to Campinas to pipe water to the city’s fountains; and

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finally, money spent on paving a new street and drafting plans for the construction of a new street and a bridge built of bricks.12 A cache of receipts in the municipality of Amparo reinforces the pervasive nature of public works spending in municipal financial life. In October and November 1875, the procurador paid out bills to contractors for services rendered by ten day laborers to construct the Rua da Princeza in October 1875 (110 milréis) and for a day’s labor by ten men to repair water damage to the same street a month later (22 milréis ). Another 78 milréis were spent to pay for repairs to the jail, while 29 milréis were spent on the slaughterhouse.13 Public accounts for many places in many years were rudimentary, lumping “works” together in a single large expense. As accounting practices were better established and municipal accountants became more experienced, we see details emerging on itemized lists that invariably included repairs and upkeep to the slaughterhouse and market. All municipalities had public slaughterhouses and markets of some form or another; these were essential and ubiquitous public institutions in Brazil from colonial times onward. Sometimes the spending was for upkeep or repairs; sometimes the spending was substantial, signaling a major capital investment to build new facilities. Campinas embarked on the latter in the late 1850s and early 1860s, when it constructed a new slaughterhouse and a new market. The slaughterhouse cost 990 milréis, consuming 13% of total spending in 1858, while the market cost 4,320 milréis, almost 30% of total spending in 1861. In 1864, Rio Claro approved a report from its public works committee that provided the first plan and budget for a public slaughterhouse, projected to cost 880 milréis or about 15% of all expenditures for that year.14 Ribeirão Preto, the youngest of the municipalities, was late in improving its slaughterhouse facilities. The municipal inspector alerted the municipal council to the urgent need for a fenced-in block paved with rocks in the place serving as the slaughterhouse in 1884, ten years after the municipality was founded. The council responded quickly: within a month, it approved those improvements, along with an angled rock or tilelined ditch to carry the wastewater to the canal.15 The municipal slaughterhouses and markets also required oversight, so inspectors and facilities managers as well as janitors and veterinarians began to appear on municipal rolls by the 1860s. A sensitive aspect of the local state’s expanding role in daily life concerned what to do about the dead. In colonial times, the dead were buried in shallow graves under the church floors, a highly unsanitary prac-

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tice that was replaced in imperial ordinances by burials in municipal cemeteries.16 Whether because of the space limitations posed by a suddenly growing population and its certain fate to join the ranks of the deceased, or because of a growing sense that the old ways were hazardous to public health, municipal administrators took on the responsibility for cemeteries. This was a typical expansion of state reach in the nineteenth century. Under the new codes, existing church cemeteries fell under municipal oversight, and new public cemeteries were built with municipal funds.17 Some municipalities, like Franca, outlawed burials in any place other than the public cemeteries. Some posturas included stipulations for the distance between graves and their proper depth. In 1871, Rio Claro councilman Dr. Cerqueira Cezar moved that all public works projects be suspended so that the municipality’s revenue could be spent on the construction of the cemetery. The measure passed unanimously.18 Ribeirão Preto’s rapid population growth meant that its cemetery was running out of space. The same municipal inspector who had raised the alarm about Ribeirão Preto’s slaughterhouse also wrote to the council in 1884, informing it of the urgent need to move or expand the cemetery.19 As with markets and slaughterhouses, budgets for cemeteries ranged from the initial costs of acquiring property with adequate space for expansion to spending on maintenance and administration. Such a budget became a regular item in Campinas’s finances in the 1870s, when the municipality began employing a zelador, a cemetery watchman. In the late 1870s and early 1880s, it added two full-time grave diggers to handle the heavy increase in burials, a by-product of the midcentury population boom. Araraquara and Rio Claro also employed a regular cemetery administrator beginning in the 1870s, while Amparo and Franca began budgeting for a cemetery overseer and grave diggers in the early 1880s. Another emerging area of public works investment was incipient street lighting networks. Before the 1870s, we see little reference to public lighting other than a passing mention of lanterns hung around the municipal jail. During the 1870s, however, regular investment in lighting systems became a feature of public spending. Amparo began investing in public lighting in 1876. In the first eight years, the lighting system averaged 14% of total municipal expenditures and 25% of the public works budget. Campinas first included expenses for a public lighting network in its budget for the 1875/76 fiscal year. The value was a staggering 19% of total projected expenditures and almost half the public works budget. In 1885, the Campinas council despaired that the cost of lighting was over-

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whelming its finances.20 In the early 1880s, spending to install and expand the gas lighting system had already grown to account for almost half of all budgeted expenditures. Most of these municipalities approached public lighting in incremental steps that suggested trial runs. Rio Claro had kerosene lamps, which it wanted to replace with another system in the late 1870s, so the local finance committee approved a trial experiment with two new lamps placed in the main church: “an experience that produced satisfactory results such that the committee understands that the system be accepted.”21 In a public-private arrangement that signaled the shift from “common hand” to publicly provided public services, Ribeirão Preto first assumed municipal responsibility for public lighting when a councilor moved that the council supply kerosene to the residents of the Rua do Comércio and the main church square, who would themselves supply the lanterns.22 São Carlos committed to public lighting in 1882 and created a formal position for an employee to oversee the lighting network the following year, when Franca was also budgeting a lighting system into its spending plans. Araraquara, the municipality that generated the least revenue and invested the least in public services in most years, only began to spend money on street lighting at the end of the empire. These incremental experiments fairly quickly became a steady municipal service: by the mid-1880s, most municipalities spent 10% or more of their budget on lighting networks, a commitment that in some years consumed one-third to one-half of all public works spending. In the final decade of the empire, when population increased at a rapid rate driven by immigration programs to supplement and then replace slave labor, public works spending jumped in both absolute and relative terms for most of the municipalities. The real per capita growth is especially impressive, given that the denominator for these municipalities was at least 50% larger than it had been in the 1870s. In Amparo, public works investments increased from just under half to almost two-thirds of all spending, while more than doubling in real per capita terms from 1880 to 1889. Araraquara, which had been particularly stingy in public works spending until then, increased spending more than fivefold in real milréis per capita over the 1880s. This represented an increase from 35 to 65% of total spending. Budgeted funds for public works in the newest municipality, Ribeirão Preto, jumped from 12% of total spending more than 50% of total spending, and grew fivefold in real per capita terms in the mid-1880s.23 Even as municipal administrators increased their funding for public

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works in relative and absolute terms in the waning years of the empire, documents submitted by the residents of their settlements indicate that this enhanced spending still fell short of need. In January 1885, an abaixo assinado, or petition, from the residents of Nossa Senhora do Carmo parish in Franca to the president and members of the São Paulo legislative assembly asked, “with all respect and deference,” for the body to recognize their dire need for piped water. They had already built a local jail through private initiative, but their poor water system was “causing illness that distances a great number of people from this place, people that otherwise would be able to settle here.” With a modest subvention from the administration, they believed they could provide this essential public good. 24 Campinas saw varied and endless demands for public works in 1885 that were petitioned for or promised by its municipal council. The weekly newspaper O Correio de Campinas, which covered the council meetings, published the typical range of calls for or promises of public works.25 The residents of Aquidaban Street asked the council to install gas lighting in the streets, as did the residents of the Botafogo neighborhood. The council requested repayment by the province for repairs made to the jail and authorized studies for repairs to São Carlos Street. Citizens asked the council to widen the gutters on Imperador Street and to make the promised repairs to Rosário Street. An official request from the council to the provincial assembly asked for reimbursement for expenditures to repair the jailhouse roof. The council engineer reported on repairs to a public fountain. A petition was submitted by residents of one street asking that it be paved. An official request asked for support for the smallpox hospital and for a vehicle to transport smallpox victims. The cemetery administrator reported that the cemetery was almost full, and requested that municipally owned lands be designated and walled to create new space for burials. The council noted the urgent need for a sewer and the construction of a bridge before the arrival of the rainy season, and announced that it would clean private ditches with public funds, billing the owners as it saw fit. The urban tram company, C. Campinas Carris de Ferro, requested road leveling where it planned to install tracks. Tax receipts were presented to the council, as were accounts due to the gas company that provided the public lighting. The council approved a contract to supply sixty marble panels for the counters in the new market. It also approved a proposal for the taipa walls of the new cemetery, enacted stiff fines for everyone who failed to receive the second dose of the smallpox inoculation, and appealed to the provincial assembly for money to handle the smallpox

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outbreak. The year closed with a report that the municipal council was saddled with “colossal debt” that it had tried to pay down by selling municipal property. The report concluded that “the municipality is rich, but does not have the wealth to support so many expenses. . . . We do not believe that with similar levels of expenditure there is any council capable of finding balance of the municipal budget. The deficit might be permanent and the growth of the debt will be in constant progression.”26 It was in this environment of tension between the demand for services and the ability to pay for them that municipal planners prioritized their expenditures. In established municipalities with mature economic bases, like Campinas, these demands were largely expansionary, such as the extension of lighting and water and sewer networks to newly settled neighborhoods. But for many municipalities that had experienced little change for most of the nineteenth century and whose sudden population growth and urbanization was driven by the coffee boom of the 1880s, these demands included the implementation of basic infrastructure to accommodate the swelling citizenry.

Public Works in the Republic In the years of the republic, public works continued the endeavor of building, expanding, and maintaining the essential infrastructure of Brazilian towns and villages. Such projects meant spending on materials to build and repair bridges, streets, and interurban roads; planting trees in public spaces; investing in gutters and storm drains; and maintaining and repairing municipal buildings. A municipality’s Division of Public Works was responsible for inspection and oversight of other municipal departments with physical structures that might require renovation or repair, such as the market, slaughterhouse, and fire station. It also inspected private contractors who provided public services such as electricity, lighting, water, sewer, and transportation. These works continued to absorb the most funding of any category of municipal investment (tables 4.1 and 5.2). We saw in chapter 4 that the fiscal structure of the republic gave municipalities the right to borrow money in the capital markets to pay for large, expensive public works projects.27 Some of the new projects, which continued to be the most important destination for municipal investments in the republican era, were in fact financed via loans, but another approach taken by municipal councils, particularly in the early years of the republic,

63.1%

16.5% 20.4%

100%

Subtotal, % Total

Miscellaneous Debt Service

Total

100%

28.6% 22.2%

49.3%

7.1% 31.9% 8.1% 2.3%

Araraquara

100%

37.5% 14.7%

47.8%

5.5% 20.7% 19.6% 2.0%

Campinas

100%

29.1% 22.9%

47.9%

6.7% 19.6% 19.5% 2.1%

Franca

100%

29.5% 22.5%

48.0%

8.3% 30.8% 6.6% 2.2%

R. Preto

100%

27.9% 16.4%

55.6%

12.3% 30.0% 9.7% 3.6%

Rio Claro

Source: Elaborated by the author from published financial statements. São Paulo, Anuários estatísticos, 1894– 1928, balanços de receita e despeza. Note: Public Works includes cemetery, market, and slaughterhouse. SP state is the average of all municipalities in the state, net of the seven cases under study.

11.3% 36.2% 11.0% 4.6%

Salaries Public Works Public Health Education

Amparo

table 5.2 Municipal spending by category, 1894– 1928

100%

33.4% 24.6%

42.0%

5.9% 20.7% 14.1% 1.4%

S. Carlos

100%

25.2% 26.5%

48.3%

11.2% 26.6% 9.1% 1.4%

SP state

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was to leverage public finances by contracting with private companies to provide public services. Municipalities had contracted services out in one way or another since the empire, but not on such a large scale. Now councils were engaged in formal public bidding for the construction and operation of major public works projects they had been unable to afford previously: public markets and slaughterhouses, public lighting networks, and public water and sewer networks.28 Ribeirão Preto is illustrative of the flurry of new services inspired by the ordinary law of 1891 that gave municipalities the authority to borrow. That year, the municipality announced open bidding for construction of the municipal slaughterhouse and for a network of streetlights.29 It eventually signed a contract with a Dr. Rufino Augusto de Almeida in 1898 to install the lighting network. The contract, granting a concession for twenty years provided the concessionaire inaugurate public lighting service within twelve months, stipulated everything from who should receive illumination (all residing within the urban limits and some in the suburbs), the type of technology to be employed (incandescent lamps of thirty-two candles’ intensity), who was to determine the distribution and spacing of the lampposts (the intendant’s office), the hours of public illumination (one half hour before dark, ending at dawn), and the rate table for the service. In exchange, the municipality was to expropriate the necessary properties and provide tax exemptions to the company.30 Almeida formed the Empreza Força e Luz de Ribeirão Preto, which had monopoly rights to the lighting network. Ultimately, it exercised its duties poorly. A mayoral report for 1904 complained that the company had committed “all sorts of abuses,” provided bad service, and was the subject of “entirely justified” public complaints.31 The company had been slow to replace the old voltaic arc bulbs with incandescent bulbs and had only recently installed the large steam engine to power the system. Ribeirão Preto’s water and sewer system and street construction also were contracted out under the new law. Manoel Tapajós, who signed a contract in the late 1890s to construct the water and sewer network, petitioned to transfer the contract to the civil engineer Flavio de Mendonça Uchoa, who built and managed it.32 Once it was installed, he successfully bid for the contract to pave the central district of the city. In 1905, Ribeirão Preto authorized a one-million-milréis bond to pay Uchoa to install gutters, curbs, storm drains, sidewalks, and macadam paving for twelve thousand meters of city streets, as well as to plant trees along the streets and in two public parks.33

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If some public services were arranged through bidding, other public contracts were obtained through barter or negotiation in public-private partnerships. For example, the Mogiana Railway proposed to broaden existing streets and build new ones near its Ribeirão Preto station, and renovate existing municipal warehouses in exchange for the municipality agreeing to build a bridge where São Sebastião Street had been extended. The company also sought permission to park wagons on the street by its warehouse to facilitate unloading merchandise. The land for the new streets had been donated by a private citizen, Manoel Francisco de Carvalho, and the work would be done “without onus on the municipal coffers.” The proposal, approved, held obvious benefits for the private company, but was pitched as being equally good for municipal interests by improving the circulation of goods.34 A mayoral report years later reflected that many improvements resulted from this deal at minimal cost to the municipality.35 Public goods were understood by local governments to be essential to their economic, and therefore financial, well-being. In one example, the municipality of Jardinópolis approached the municipal council of Ribeirão Preto to propose financial cooperation in constructing a bridge over the Rio Pardo, as it would benefit both municipalities. The state’s Office of Public Works had estimated a cost of 13,000 milréis for this project, and because of its public utility offered a 5,000- milréis subvention. Jardinópolis made its own study and concluded that the bridge could be built for 9,000 milréis. It asked the municipal council of Ribeirão Preto to consider splitting the 4,000-milréis balance of the project cost, given that both would benefit from the bridge in equal measure. The council president agreed, suggesting that Ribeirão Preto commit 2,000 to 3,000 milréis, although a handwritten note from the finance committee cautioned that the council’s financial conditions did not permit a contribution greater than 1,000 milréis to this joint venture.36 Overall, most public works spending continued as it had begun in the empire: juggled to attend to the urgent, and maintain the mundane as revenue allowed. By the time of the republic, however, the mundane had become the urgent, as we would expect when populations swell suddenly, and annual reports became exhaustive accounts of unrelenting maintenance, repair, and unfunded but identified need. Public works projects to build and pave roads, install sidewalks and gutters, and install lighting increased exponentially and consumed the bulk of municipal resources. Municipal financial accounts published in the São Paulo Statistical Yearbook

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table 5.3 Public works spending as percentage of total municipal spending, 1894– 1928

Amparo Araraquara Campinas Franca Ribeirão Preto Rio Claro São Carlos São Paulo state

High

Year

Low

Year

Average

N

86 65 60 75 57 52 85 59

1901 1913 1901 1894 1894 1899 1901 1901

15 11 4 4 10 13 5 14

1906 1912 1911 1912 1908 1900 1909 1908

36 32 21 20 31 30 21 27

28 21 28 24 28 25 27 34

Source: Elaborated by the author from published financial statements. São Paulo, Anuários estatísticos, balanços de receitas e despezas, 1894– 1928. Note: São Paulo state is the average of all municipalities in the state, net of the seven cases under study.

confirm that spending on public works for most municipalities as a percentage of total spending peaked between 1894 and 1901, when it ranged between 52 and 86% of all municipal expenditures, a trend driven by the expansion of the urban settlements within the municipalities37 (table 5.3). On a per capita basis, public works investments for our seven municipalities were at their highest between 1896 and 1914, except for Ribeirão Preto, whose sustained investment in works after the 1910s grew in real per capita terms. Of all the public works projects vying for funding, the constant need to build and maintain municipal streets and roads dominated mayoral reports. When urban settlements grew, streets were plotted, opened, graded, and named, but they were not always paved. People, horses, and oxcarts shared the dirt roads. Oxcarts were a particular bane, because they destroyed the streets in good weather and bad. São Paulo’s heavy seasonal rainfall also caused its fair share of destruction, including potholes, mudslides, and washouts. Maintaining urban streets was essential to the circulation of people, goods, and services, yet the never-ending effort to facilitate traffic and preserve roads year after year gave the whole endeavor a decidedly Sisyphean quality. In 1894 Araraquara, a newspaper editorial bemoaned the lack of progress on street repairs during the dry season, demanding to know who was at fault— the contractor or the municipality. (That the same paper carried a report that the city had been unable to pay its employees because of a shortage of funds may offer a clue to the work stoppage.)38 Reports from all the municipalities included extensive passages citing the need to pave the streets to give them greater durability, but paving

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was an expensive proposition. When Ribeirão Preto first paved its roads, it had to buy cartload after cartload of rock for cobblestone pavement. To save money, it bought its own quarry in 1901.39 The contractor did an excellent job, because many of the cobblestone streets from the turn of the twentieth century still exist. A later contract with the engineer Uchoa called for him to pave the city center using macadam paving, an expensive and not entirely successful technology. The contract also called for him to install the attendant water abatement infrastructure: storm drains and gutters. But other municipalities, such as Franca, foreswore paving, installed gutters and storm drains, laid down gravel, and hoped for dry weather. Franca’s constant struggle with water damage from torrential rains that regularly overwhelmed infrastructure and damaged the streets offers an example of the futility its administrators confronted. In early 1894, the intendant ordered the installation of gutters to control the water during rainy seasons. So urgent was the need that he undertook these works without prior approval of the municipal council, meaning no funds had been appropriated to pay for the project. As a result, the laborers he contracted for street repairs did not get paid.40 Financial straits in 1898 caused all street repairs to be suspended as a mountain of unpaid bills— to employees, workers, contractors, and material suppliers— was crushing the municipality. In 1904, the intendant advised the municipal council that “the municipal debt is now elevated . . . , given that the rainy season has caused considerable damage to almost all the streets of the city. The majority of them have been repaired. Any thought to do otherwise would have doubled the expenditures and caused difficulties in public transit.”41 Campinas, too, began paving its streets by the early 1890s, but suspended the expensive project in 1894 so it could get its finances “in a better situation so that we did not pass on a heavy burden to the next administration.”42 Its accumulated loans by the end of 1894 stood at almost double the year’s revenue. From 1893 to 1895, Campinas spent almost 475,000 milréis— more than 20% of all spending— on paving alone. Other projects demanding attention and funding in those years included completing a municipal warehouse, repairing municipal properties, procuring materials and equipment for the slaughterhouse, completing a bridge project, moving the municipal coach house, and maintaining hospital facilities. Sometimes, citizens of a municipality brought public works to the attention of the council through petitions. Franca’s neighbor, Ribeirão

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Preto, was also awash in the rains of 1894, prompting the inhabitants of one street to demand that the council do something about the mud that invaded the street “on which we unhappily live.”43 Given the epidemics that pervaded the era and the taxes the residents paid, they refused to believe that council members would willingly consent to live with the “putrid and filthy” conditions of their street, which often caused them to construct catwalks to cross “this source of miasmas.” Ninety-five people signed this petition, which included the helpful suggestion that the council spread moisture-absorbing sand on the street and install gutters to improve the flow of water. The petition succeeded in prompting action, because less than a month later the city inspector delivered a report that the street needed the requested repairs and more. Sand would not suffice given the amount of traffic on this particular street; it needed to be paved. But paving would have to wait until the rainy season was over. And then there was the matter of the sewer system that was to be installed. In the end, the council approved the application of truckloads of gravel as a short-term fix until the structural solution could be made. Another citizen group circulated a petition in 1895 asking for a bridge over a brook where a dam caused water to pool, cutting off the residents and merchants of one side from the other. This area, a recent settlement that had attracted “not so few dwellers as well as merchants,” relied on low water to cross, but the dam had made that impossible. In addition, the dam was in the middle of the settlement, and the pooled water could become a source of illness. The city inspector agreed that a remedy was needed, and recommended that the dam be removed and the brook straightened. The work was authorized.44 Transit was the justification for many street works, and not just in the central districts of the cities, where the wealthy might disproportionately benefit. Routine road repairs in Ribeirão Preto’s central district included a plan to open additional streets to the working-class Vila Tibério neighborhood to improve public transit between the two locations.45 Campinas made street paving “in locales distant from the Center” a priority in 1894. It wanted to facilitate transport between the main urban settlement and the new peripheral neighborhoods that had developed in response to population growth.46 Companhia Mac Hardy, an important machinery and metalworking firm, donated cobblestones to pave “streets located at some distance from the center.” It sought to ease transit, prevent disease, and beautify the municipality, all of which were good for business.47 Amparo’s municipal council voted to expropriate the necessary land to extend one

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street, and approved the petition by residents to supply them with materials to repair the road from their neighborhood to Entre-Montes.48 This quest to promote the circulation of people, goods, and services extended to the interurban roads and bridges that connected their municipality to others. As with streets and roads, it was common for markets and slaughterhouses to be contracted out through public bidding. Reports suggest, however, that these contractors ran poor and unclean operations, so it was also common for a municipality to retake them. Ribeirão Preto contracted out its slaughterhouse for lack of funds to build and operate a municipal facility, but expropriated and ran it after 1897 because of the deplorable conditions. The municipal sanitary inspector had reported poor waste disposal, poor hygiene, conditions of animal cruelty, and structural safety violations. The initial remedy was to have the municipal works inspector force the concessionaire to comply with the dispositions of his contract, but the report also laid out a judicial path to void the contract.49 In the end, the slaughterhouse was absorbed into municipal administration, and the poor conditions were remedied. The 1902 report listed improvements made to equip the slaughterhouse “to the standards in the main cities of the state,” including improving the water supply and rigorously observing hygienic practices.50 Ribeirão Preto did the same for its municipal market. The same report recalled that while the market was a potential source of revenue for the municipality, it had been built by a private contractor, because the council had lacked the money to construct it. A concession was extended to a private group to construct the market in exchange for income from the market for fourteen years, at which time it would revert to the municipality. The municipality had the right to expropriate the market at any time via indemnification, which it sought to do in 1908 in response to poor hygienic conditions.51 Public ownership and management of slaughterhouses in other municipalities suggest that the problems of private management were widespread. Araraquara owned, administered, and improved its slaughterhouse in the republic. It reported in early 1909 that “all the areas were finished with cement and stone inside and out of the main building, as well as around the sties.” Used water was piped to the canal, and hot water was installed. In addition, a salting shed was built to replace the old one, which had been used to cure hides inside the slaughterhouse.52 In Franca also, the slaughterhouse was owned and operated by the municipality. This setup guaranteed a reasonable state of hygiene relative to the

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alternative, but public ownership exposed the slaughterhouse to the vagaries of public finance. The 1895 intendant’s report stated that the slaughterhouse operated regularly, but that it was not always staffed due to the low pay budgeted for this facility.53 A 1904 report found that the service of supplying meat to the population was done with the highest scruples to maintain the public health, but admitted that the facility did not meet the demand of the consuming public. In 1912, the mayor urged the municipal council to appropriate funds for a new, larger slaughterhouse and a new market to increase the food supply. At the beginning of World War I, however, reports concerned with food scarcity explicitly mentioned capacity problems. Municipal financial constraints affected the food supply and therefore the cost of living in Franca. In 1916, these constraints caused the municipal council to sign a contract with two partners, William Fowles and Ricardo Guimarães, who received a monopoly concession to build a modern slaughterhouse and beef chilling plant ( frigorífico). The mayor of neighboring Ribeirão Preto called it a “model” facility that he hoped to emulate.54 The larger facility did not result in lower prices to the consumer, however, nor did its public market guarantee a sufficient food supply for the poor. The mayor’s office, responding to citizens’ complaints in 1920 about the elevated price of meat, signed a contract with the butcher Rodolpho Toze to sell meat at established prices in exchange for an exemption from the Industries and Professions tax.55 In 1923, the mayor reported that while a variety of fruits, vegetables, and meats were sold through the market, some of the “goods of primary necessity,” like rice, beans, potatoes, and cheese, had been virtually absent because of unusually high inflation that year.56 Amparo, too, faced the problem of food insecurity. As in Franca, the price of basic foodstuffs rose almost immediately with the outbreak of World War I, which caused grave concern for the municipal council. In August 1914, it announced that it would adopt “measures to lessen the effects of the war on the Amparense population,” and subsequently issued a call for contractors to operate and administer the municipal market for a period of five years.57 Campinas’s mayor sought to remedy the precarious position of the poor during wartime shortages by permitting the free sale of goods of primary necessity. He contracted with twentyfour merchants to sell meat at a fixed price in exchange for a reduction in taxes paid per head slaughtered. He reported that this measure did, in fact, reduce scarcity in 1914.58 The potential for food shortages erupted

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again in the immediate postwar period when rinderpest, or the bovine plague, swept São Paulo state. This often fatal disease threatened cattle herds, which, in turn, threatened to create meat shortages. In the end, containment measures kept the disease from spreading and the Campinas slaughterhouse was spared, but the mayor’s office had undertaken emergency planning to counter the shortage had the spread of the disease not abated.59 At the end of the republic, Campinas addressed the urban food supply by instituting, on an experimental basis, that most iconic of modern Brazilian gatherings: the feira livre, or weekly farmer’s market. Thirty-one vendors participated in the first feira, held in the city’s Rui Barbosa Plaza, and by the twelfth week had increased to more than two hundred.60 To accommodate the needs of a growing urban population, public works departments oversaw the replacement, maintenance, or expansion of old infrastructure. A citizen of Ribeirão Preto petitioned the municipal council in 1895 to designate an area for a new cemetery in her suburban district of Santa Cruz da Boa Vista, located some fifteen to eighteen kilometers from the urban perimeter. She wanted “to avoid difficulties in the transport of cadavers due to the distance” to the existing cemetery. Without proper transportation, a person she had known had lain dead for three days before burial. In response to her petition, the council dispatched its inspector, who found burial plots “here and there” and determined that a new cemetery was indeed necessary. He then worked with the petitioner and other nearby residents to identify an appropriate location.61 Araraquara’s municipal council reported in 1909 that an old cemetery was to be closed and another was undergoing expansion. It also reported that its public works budget was targeted to give “special attention to the central streets of the city,” to purchase land to increase the public spaces that served the train station and other plazas, and to expand the public space around the renovated cemetery. New streets and avenues, tree planting, and water abatement were also pending.62 It was not just population growth that prompted new investments in municipal bricks and mortar. New technologies also created new public works projects. When electrical lighting was introduced, for example, municipalities made a major push to update the old gas and kerosene lighting networks. They sometimes took advantage of new street projects or repairs to install or extend public lighting. Weather occasionally disrupted these updates, but the major expense came from the technology itself. In 1907, Araraquara reported the need to replace the old kerosene lighting network with electric lighting. Two years later, it promised that electri-

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cal light would be installed soon “for the public’s comfort, increasing the days with illumination from 18 to 24.”63 By 1917, the network had been vastly expanded. The original wooden lampposts had been replaced with iron ones, and the number almost tripled from 39,000 to 112,000.64 Campinas’s reports on public works began to include a table on the number of streetlamps replaced in a given year— well over one thousand annually by the mid-1920s. Each municipality’s mayoral reports include a careful accounting of the type of lamp and its lumens. Whether lighting networks were financed through municipal budgets or contracted out to private, for-profit businesses, the arrangement was clear. The fee for service to private buildings was to be negotiated and indexed; the fee for service for public illumination was to be reasonable or negligible in exchange for the monopoly. Where lighting was installed, and at what capacity, was laid out in contracts between company and municipality. All municipalities reported that electrical service was essential to public safety and modern urban life, but the path to its successful implementation depended on the ability to finance the project and the skill of municipal leaders to negotiate with contractors and utility companies. In other words, sometimes the obstacles were financial, and other times the obstacles were confrontational. For Franca, the difficulties in building out its lighting network fell into the financial category, illustrating the tension between demand for a service and the municipality’s ability to supply it. The cost of the service was prohibitive. In 1896, the intendant reported that he was working to improve lighting service: “With great difficulty and expense, ordered the repair of majority of lamps and increased number of lamps. Now Lighting is more or less regular. Still, I continue to receive requests for more lamps.”65 The demand for the installation and expansion of public lighting was greater than the financial ability to pay, forcing the intendant’s office to invest in the service a bit at a time. This piecemeal approach to lighting proved unsatisfactory and unpopular with the general public. A decade later, the mayor uttered the complaint that opened this chapter: “[Public lighting] continues to operate with the usual imperfections.”66 For Ribeirão Preto and Campinas, obstacles to expansion of lighting networks were of the confrontational sort. Ribeirão reported on the installation of its public lighting in 1899, a service that “provides the urban population with a public service of inestimable value” and that resulted in “improved conditions of traffic at night by carriages.” But by 1902 the network was no longer adequate. The mayor reported that while light-

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ing service “continues to be supplied with regularity by Empresa Força e Luz de Ribeirão Preto, [which is] always attentive to complaints,” urban growth necessitated the extension of public lighting beyond the area currently served. This expansion, to be completed in 1903, would allow the company to meet the demand for public lighting and supply electricity to “industries already in town and those to come.” But the report for 1904 expressed great frustration that the company had not been responsive to the municipality’s expanding needs.67 Campinas’s experiences with lighting were especially confrontational, fraught with accusations of poor service and failure to provide contracted services. Conflicts with the electric and light company occupied substantial municipal council time over the years. The arrival of telephone service required another major new investment in technology similar to that for the lighting networks. Telephone companies linked the interior towns to one another through municipal contracts. Franca signed a contract to install a telephone network in its urban center and throughout the municipality in 1902, and it inaugurated limited telephone service by the end of the year.68 In early 1903, Franca’s intendant confirmed he had ordered one phone line for his office and another for the police station, using money from the public works budget to pay for it.69 The municipal council of Araraquara announced in 1909 that a new contract with its phone company would soon link its urban center with the neighboring municipalities of Mattão, Jaboticabal, and São Carlos.70 Rio Claro’s phone services, established in 1910 to link the city to neighboring São Carlos do Pinhal, were developed enough by 1926 that they were worth taxing. The municipality added “firms that provide telephone service” to its Industries and Professions tax rolls.71 Campinas complained in 1924 that its telephone company, Companhia Telephonica Bragantina, continued to provide an insufficient network to attend to the requests for new installations, and that its service to existing customers left much to be desired, because of not only the limitations of the network but also the old equipment. By 1927, Campinas had replaced the contractor with a new company, the Companhia Telephonica Brasileira, which promised to have service up and running within eighteen months. In an abundance of optimism that seems unwarranted given the municipality’s many documented troubles with private-party providers of public services, the mayor wrote that “soon, Campinas will be endowed with perfect telephone service.” Indeed, the service, once inaugurated in 1930, was deemed “flawless.”72

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In addition to executing infrastructural projects and overseeing new technological networks, the public works department of a municipality was charged with new-construction inspection and oversight. Municipal codes informed by the 1894 public health code set building standards such as height, width, and distance from the street. The Department of Public Works issued permits for new buildings and for renovations to existing ones. Sometimes its reports complained of stylistic variances or haphazard placements, but unlike the public works administration involved in Rio de Janeiro’s urban renewal, the authority of the department did not seem to extend to demolition. If anything, the rate of urbanization kept planners busy with basic infrastructure as growth of new neighborhoods reinforced the relentless need for street paving, gutters, and storm drains to control flooding. The urbanization of Ribeirão Preto offers a case in point. In the last decade of the nineteenth century, it had the fastest-growing population of the seven municipalities. From 1874, just after it was founded, to 1920, it grew more than 550%, double the rate of population growth for the state of São Paulo. By 1934, it was the second-largest of the seven municipalities at almost 82,000 inhabitants, more than half of whom were urban dwellers.73 From 1900, when the fastest growth had already occurred, to 1934, the number of buildings in the city of Ribeirão Preto and its surrounding urban districts grew from 1,460 to 6,730, with most of this growth taking place in the neighborhoods that grew to absorb Ribeirão’s expanding population.74 The proportion of buildings in the original city district to all buildings in the urbanized area fell from more than three in four at the turn of the century to less than half by 1930. Vila Tibério, which recorded just 100 structures in 1905, counted more than 1,400 in 1930. Retiro’s buildings did not register on the city’s property rolls until 1919 (close to 200 buildings), yet it was the third-largest neighborhood in Ribeirão by 1930 (1,100 buildings). City officials in Ribeirão complained about the messy urbanization of the newly settled Barracão neighborhood, through 1920 the second-largest district after the city center that provided working-class housing for Ribeirão’s expanding economy, but they worked with residents to achieve the aesthetic goals of the urban planners. A retrospective report on the 1910s published in 1920 explained that because there was a housing shortage and urban planners did not want to discourage construction, the building codes regulated only the internal structure for hygiene and safety; no official prohibitions were imposed on outward appearance. In cases where the administration feared

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that new construction would be unattractive, it worked with the owner to propose modest and affordable changes. The realities of housing supply and demand trumped the tastes or ideals of the Europeanized Belle Époque, or beautiful era, of the turn of the century— at least in this hinterland municipality.75 It was not uncommon for urban administrators’ reports to highlight how growing demand for housing in the context of revenue shortfalls caused great challenges in providing adequate public works. Ribeirão Preto’s municipal council committee on accounts and budgets issued a report on the 1897 fiscal year budget that recognized the need to provide services for the municipality’s “natural and moral” development. At the same time, it declined to increase tax rates, which it recognized as already onerous and directly affecting the “least protected classes.” To support the merchants within its borders, it doubled the taxes on roadside businesses that were prejudicial toward the municipal businesses. It sought to streamline the tax roll categories to eliminate confusion and duplication, and urged more efficient collection of all rates due. Finally, it increased budgets for streets and sanitation, public hygiene, and lighting systems, all of which were of high priority.76 Franca’s mayors regularly reported that the financial state of the municipality had not permitted them to undertake the improvements it deserved. The mayors either put off nonessential public works for lack of funds or reported modest projects, noting that insufficient tax collection prevented more substantial ones. In report after report, we see Franca operating— to use a modern phrase— from paycheck to paycheck. We sense dismay in the 1906 year-end report of the intendant, Dr. Francisco da Silveira Gusmão: “I have little to say about these two months given the very small tax collection that occurs at the end of the year. My office could not initiate any work worthy of note, limiting itself only to completing small services already under way . . . along with other urgent services.”77 As usual, expenses exceeded Franca’s revenues in part because of the difficulty of collecting money owed to the municipality. The intendant himself had turned creditor of the municipality, making provisional loans totaling more than 18,000 milréis to satisfy some payments that had come due. Araraquara’s mayor informed the municipal council in 1907 that it had to put off all but the most essential works that could not be delayed. The municipality had bigger problems that called for urgent attention, such as reacquiring its water and sewer system (see chapter 6). It would not be in

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a position to address public works “until the municipality is entirely free of these obligations.”78 The mayor’s report expressed concern about all the projects on which it was in arrears while listing the projects it faced in the near future: construction of a bridge in the city, construction of the municipal market, and filling and grading streets and avenues. The municipality was considering a loan to pay off all its bills and undertake these new projects. Two years later, the new mayor complained of inherited budgets “with exaggerated values that did not correspond to reality.”79 He, too, looked into a loan to cover the municipality’s bills, but decided not to follow through on it: “Truly, it seems to me, it will be much more honorable to close out our term, endowing the municipality with improvements without [incurring] large debts and at the same time enabling the Council that succeeds us to continue with the work for progress of the municipality.”80 Rio Claro’s annual report for 1909 from the mayor to the municipal council talked expressly about the difficulties that arose from reliance on local commerce for municipal revenues. In the preamble of his report, Mayor José Jacyntho de Moraes wrote: Revenue continues to be scarce and of the most difficult collection, for, as the councilors well recognize, the crisis that the State of São Paulo is in, and, principally, the agricultural class and the deficiency of funds, that is felt in all of the republic, have reflected their effects on the economy of municipal ratepayers. Add to that the circumstance of the declining value of the agricultural product, cutting off expenditures by the producer and, in consequence, restricting their credit in financial markets also reduces commerce in general in a state of apathy that produces in the municipality a not small sum of harms to its finances.81

He explained that the 1909 revenue fell short of the budget, but that expenditures could not be reduced because the mayor’s office had a duty to fulfill the needs of the municipality. The year’s finances ended up in deficit. The strategy, he confirmed, “was just to put a brake on expenditures, and economize as much as possible on the funds that were consigned to the different public services.”82 By the 1920s, Brazil was experiencing an escalating rate of inflation that was wreaking havoc on municipal accounts (fig. 5.1). Ribeirão Preto reported its struggles to pay the bills in 1923, a result of double-digit inflation that rendered useless its previous budgeting for that year. Revenues, based as they were on local commerce, were generated from fixed rates

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figure 5.1 Inflation rates, 1870– 1930 Source: Catão, “A New Wholesale Price Index”; Haddad, “Growth,” Leff, “A Technique.” 1913 = 100.

established in budget laws that were only rarely updated or altered. Expenditures, however, were driven by the price level and rose at an alarming pace. The mayor wrote, “Spending overages due to the rise in prices of all materials, some of which rose by 30% after the 1923 budget was organized and approved, later grew another 50% during the year.”83 This inflation extended to primary foodstuffs, which the municipality subsidized, and to the salaries it paid for its public works day laborers. The municipality turned to loans to cover the overages. Better collection practices improved Ribeirão Preto’s revenue the following year, but the persistence of inflationary conditions kept prices high and caused the municipality to cut back on planned spending in order to balance its budget. The pressing need to pave city streets— the essential ingredient in the local economic exchange that provided its revenue— had been addressed by the municipal council in early 1923 by creating a special five-year fund to raise 200,000 milréis in loans each year, to be used exclusively for this service. But 1923 paving costs exceeded those in early 1923 by almost 150%. The excess was covered by additional loans, which turned out to be merely a stopgap, because paving costs more than doubled again in 1924. The council repeated this exercise— using loans to pay for paving— every year from 1923 to 1928. Then it took out even larger loans in the following two years to pay off the accumulated debt.84

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Each year, mayors reported that the commitment to the paving project was having the expected outcome: many dozens of streets were being paved, with the expectation that the five-year commitment to this works project would successfully pave all roads in the city. Despite the 1927 declaration that “our financial situation is magnificent,” the mounting debt from this project was staggering.85 By 1930, more than one in three milréis went to making payments on the short-term loans raised for the paving fund and other loans taken out against anticipated revenue to cover the overages. The growth of urban populations in the first decades of the twentieth century made expanded services a priority of municipal governments, but the pace of growth itself posed challenges. The ordinances described in chapter 2 called for neatly laid-out urban areas with orderly traffic patterns to accommodate growth, but evidence suggests that growth was chaotic and disorderly. Enterprising private citizens used their understanding of this problem to their advantage. In 1914, a trio of civil engineers approached the municipal council of Ribeirão Preto with a proposal: they would draw a plan of the city for five hundred milréis per kilometer of street. This plan would show streets, lots, water and sewer networks, public lighting, lists of property owners by name and address, and lists of businesses with detailed descriptions. The rapid development of the city was taking place without urban planning criteria, which made it impossible to trace the alignments and leveling of streets, expropriations, and other considerations that could bring future trouble to the council, especially if there were ownership disputes. The tax base, moreover, depended on this information. Transit, building, wall, and sidewalk taxes were all being levied on property owners, but the municipality lacked the necessary documents to prove that people owed those taxes. The problem was especially acute in the places with the fastest urban growth— regions far from the center where there was no street plan at all. The engineers promised rigorous measurement of the urban space to regulate these taxes.86 Franca, for the same motive, had passed a law in 1909 to clearly demarcate the perimeters of the city center and the suburban districts to improve collection of the transit tax.87 The mayor of Campinas proposed to the municipal council in 1929 that it elaborate a detailed plan to bring order to the municipality’s urban growth: What I desire, most excellent councilmen, it to organize a plan of slow execution in accordance with the available resources. It is clear, it is evident that

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Campinas progresses with the tendency to be a grand city, cut out to be a privileged industrial center with its location and communications infrastructure. Once the great effort to [improve] the supply of water is concluded, which is under way, this will be evident to all. That being the case, this city cannot remain with its narrow streets, without the indispensable public spaces and other improvements that it currently lacks.88

A census of its urban plant was vital in order to know where to allocate its many services. These growing pains raised discussions about the need for more accountability and professionalism in public administration. The sheer size and weight of the demands on public works made this necessary. Campinas publicly aired its shortcomings in a 1911 report that attempted to resolve a nasty three-year period from 1908 to 1910 plagued by power struggles, blurred lines of authority, and poor delivery of public services.89 The outgoing mayor, author of this report and defensive of his reputation, cast blame on the unclear distribution of authority between the office of the mayor and the municipal council. He called the council confused and inexperienced. This conflict was an outcome of a major overhaul of municipal organization law. The original law, Law 16 of 1891, had placed all legislative and executive authority in the hands of the municipal council, while executive power rested with an intendant elected from among the council members. Law 1038, the 1906 law that replaced Law 16, instituted separate elections for the office of the executive, now called prefect or mayor.90 Under this new law, the municipal council retained legislative authority, and the mayor took on executive authority. Law 1103, passed a year later, returned the election of the mayor to the council, though the council still acknowledged the legitimacy of the first directly elected mayor, who had assumed office before the law went into effect and held the position from 1908 to 1910.91 Nonetheless, he charged in the retrospective 1911 report that under his three-year mandate, the council regularly overstepped its authority and illegitimately challenged the mayor’s prerogative to do his job. Of the twelve council members elected, eight ended up renouncing their position. Five of the eight elected to fill those positions also resigned. The inexperience and turnover of councilors who granted favors like tax exemptions, forgiveness of fines, use of municipal funds for private favors, and intervention in the public bidding process— favors they did not have the right to give— created great tension between the council and the mayor. The council then investigated all contracts

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the mayor had signed with public utilities firms. And so went the power struggles between the two bodies. Public services suffered. While this type of mess is emblematic of the poor nature of public administration associated with municipal governance, rightly or wrongly, it served as a catalyst for professionalization of municipal public administration. The subsequent mayor’s report for 1911 detailed the solutions taken to remedy the underlying causes. The lack of clear regulations of each administrative division and employee in Campinas had resulted in disorganized service, so the mayor asked the council for new regulations. Several divisions were reorganized and regulated: Firefighting, Public Works, and Fiscal, and the Secretariat. An audit— the first conducted in twenty-two years— revealed corruption of the accounts, so the treasurer’s office also underwent major reform. The subsequent report, for 1912, detailed the work undertaken by the mayor’s office to present a closer and more detailed look at each division and secretariat than in the past, with greater delegation of responsibilities and greater clarity of organization than before. By this time, the financial apparatus of the municipality had also undergone the needed reforms. These reforms, coupled with Campinas’s growing prosperity, allowed for greater spending and surplus funds to be carried forward.92 Municipalities dealt with the growing administrative complexity by creating subdistricts or subprefectures. These administrative districts were foreseen by state law 1038 of 1906 that reorganized municipal administration. The ability for mayors to create subdistricts with submayors extended back to the empire, but this new law gave each subdistrict its own budget, tax collection agent, and inspection agent.93 The besieged mayor of Campinas created five such subdistricts to give local officials control over the collection of their revenue. According to the provisions of law 1038, half the revenue generated in each subdistrict could be used only for its own benefit, which prohibited resource grabbing by a hungry central urban district. The mayor’s report lists the basic infrastructural needs of these newly urbanizing subdistricts: bridge repair, electrical lighting, a slaughterhouse, water and sewer networks, a cemetery. One of Franca’s newest subdistricts made a petition in 1922 for the construction of additional municipal slaughterhouses in newly (and densely) settled areas, based on the need to improve the public health. Animals were being slaughtered quite near dwellings, given the absence of an appropriate locale for this service.94 The 1925 mayoral report confirmed that the slaughterhouse had been constructed in the subdistrict and was now op-

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erational. The same report confirmed the extension of the water network to outlying neighborhoods. Growing populations and expanding urbanization went hand in hand with expanding bureaucracies. As public administration became more professionalized, the apparatus to oversee complex public services— whether publicly or privately provided— expanded apace. In 1922, Campinas added two new offices to handle administrative demands: Contracts Inspectorate and Municipal Public Aid. Contracts Inspectorate reviewed contracts between the municipal council and private firms that supplied public services. This had been the responsibility of the Public Works Division, which did a reportedly poor job because of the large and ever-growing number of contracts. The office was largely inspired by years-long difficulties with the water and sewer company, but it was also pragmatic to centralize all contract review under one staff. The report for 1926 shows that this office oversaw eighteen new contracts for services ranging from telephone connections to the maintenance of municipal roads.95 The office of Municipal Public Aid was responsible for public health services to the poor. By 1924, it served almost two thousand residents, Brazilian and foreign alike.96 That same year, Ribeirão Preto created a new division, Woods and Gardens, to oversee its growing municipal green spaces.97 The international economic crisis of 1929 introduced serious financial strains for municipalities. It was not uncommon for them to note that they had not always collected all the revenue due to them, but these shortfalls were noted only in inflationary times, when prices rose and tax rates that were fixed by law could not be easily modified. In one year when expenditures were lower than expected, Ribeirão Preto’s municipal council had to defend its decision to fully undertake revenue collection even though it was certain to generate a surplus. It explained that it would use the excess revenue to pay down street-paving-related debt. The council’s response suggests that taxes and licensing payments were ordinarily viewed through a short-term lens, and that municipalities did not seek to establish a financial cushion for future years in which they might have a shortfall. This financial crisis, however, was different. Ribeirão Preto engaged in deficit spending in 1929 because it had been unable to effectively collect the revenues normally due to it: The Mayor’s office did not want to force the receipt of these taxes, preferring, with the authorization of the municipal council, to delay payment on spending overages, and putting off, with the same authorization, receiving late taxes, so

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as not to cause affliction for the overburdened rate payers in such an ill-suited moment with the shortage of cash, the deficiency of commerce, and the retraction of circulating medium.98

Despite the revenue shortage, the public works department forged ahead with expenditures, repairing eroded roadways and bridges, some of which had been badly damaged or destroyed by heavy rains and flooding in the preceding years. The centrality of these works to the circulation of goods and services— the predominant revenue base of the municipality— justified their expense even in times of severe financial constraint. The Revolution of 1930 summarily replaced all state governors and municipal mayors to recentralize federal control, a move which led to an extensive review of Ribeirão Preto’s finances. The newly appointed interventor blamed the excessive paving and street construction works, especially the debt incurred to pay for them, for creating a precarious situation. But how would he get the city out from under this crushing debt load? New taxes were impossible, he decided, because the taxpayers already faced very high contributions and could not support additional taxes. Cutting expenditures was also impossible, because they had already been reduced to the bare minimum to still fulfill basic public works services. The only option, ironically, was a new loan at a longer term and lower interest rate than the short-term, high-interest loans the municipality had been relying on to cover its current account deficit.99

Conclusions This final episode in Ribeirão Preto’s public works experience is emblematic of the entire period. While technologies changed the nature of works projects, and major capital investments in major new projects such as markets and slaughterhouses introduced occasional spikes in works outlays, the most constant theme through it all, year in and year out and across all municipalities, was the investment in basic bricks and mortar of municipal infrastructure. Streets were widened, straightened, lengthened, named, and numbered; new gutters and storm drains were installed, repaired, or replaced; public buildings were repaired and renovated; lampposts were repaired or replaced; utilities networks were extended to new neighborhoods; walls were built and whitewashed; cemeteries were maintained; anthills were removed; bridges were repaired; and interurban roads were

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maintained. The number of projects completed in a given year depended on financial capacity and abrupt crises. Without progressive taxes on the major sources of wealth and income, municipalities faced three possibilities year in and year out: underinvestment in public goods, depressing the local economy on which their tax code rested; appeals for private contributions to pay for public goods; or turning to the capital markets and incurring debt levels that far exceeded the legally allowed maximums.

chapter six

Pests and Pestilence Paying for Public Health All municipal residents who have not been vaccinated must appear at the place set by the municipal council, on the designated day and time, to receive the vaccine, under penalty of 10$000 per free individual adults, and on the parents, tutors, curators or masters, when the person is a child or a slave.1 — Amparo municipal ordinances, 1865 The municipal council will supply the necessary isolation hospital to poor persons, to those that declare to lack the necessary accommodations to remove their ill from the settlement, with the latter paying the corresponding rent to that which the council expends with the hospital.2 — São Carlos municipal ordinances, 1866

T

here was a rhythm to the ebbs and flows in municipal finance of public health, a rhythm that accompanied the great surges of disease and the advancements in knowledge about its origins and its spread. For much of the nineteenth century, folklore and scientific knowledge competed to explain the upsurge of the diseases— smallpox, yellow fever, tuberculosis, cholera, leprosy, and measles— that periodically swept through the country. By the turn of the twentieth century, urban reformers had either identified the scientific causes and treatments of these diseases or they had stumbled upon practices that stemmed new eruptions.3 Regardless of the state of knowledge of their cause and spread, disease devastated Brazilian communities. Campinas, one of the most important economic centers in Brazil in the 1880s due to its rich coffee economy and rapidly diversifying urban and industrial profile, was assailed by wave after wave of yellow fever beginning in 1889. This was shocking on two fronts. First, yellow fever was considered to be a coastal disease, and Campinas was safely located on São Paulo’s high plateau. There had been repeated outbreaks in the littoral ports, but the cities at higher elevations had largely been

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spared. Second, Campinas was the epitome of modernity, progress, and planning. It had convened a committee of medical professionals in 1886, the Comissão de Higiene e de Saneamento, or Commission on Hygiene and Sanitation, to identify preventative measures to ensure the public health of the city. There had been a number of suspected cases of yellow fever in 1876 after two men recently arrived from Rio de Janeiro were hospitalized with the disease, but the local press debated whether this had been a case of mistaken diagnosis.4 By 1889, however, there was no denying it: Campinas was sick, and its population was terrified. Officials eventually traced the outbreak to a Swiss immigrant, Rosa Beck, who had contracted the disease in the port of arrival and traveled to Campinas, where she was employed as a French teacher. Before she died, she passed the yellow fever to her landlord, most likely through a shared mosquito bite. He died two weeks later, one of hundreds to perish in the 1890s from the disease. As the city’s inhabitants fled to the countryside, business ground to a halt. Municipal institutions, from schools and shops to courthouses and warehouses, shuttered their doors. The types of rains that normally gave administrators fits for the destruction they caused were now eagerly awaited to wash away the disease. Municipal spending on the 1889 outbreak reached 122,978 milréis, ten times the public health budget for 1888, not counting the subsequent public works projects to drain swamps and eliminate cesspools to prevent additional outbreaks.5 The flight of residents, the paralysis of the local economy, the immediate containment measures, and the massive works projects all meant major financial and economic consequences for Campinas. But Campinas was not alone. Its story was repeated throughout São Paulo, indeed throughout all of Brazil’s municipalities. The literature on public health and medicine in Brazil suggests that its public health initiatives were concentrated in the era surrounding the turn of the twentieth century, when public health policies brought together the discoveries of science with the desires to modernize a largely unmodern population. Nancy Stepan traced the beginnings of Brazilian science to the pioneering health codes written in São Paulo in the 1890s and implemented in the capital city of Rio de Janeiro as part of the urban reforms undertaken by President Francisco de Paula Rodrigues Alves during his 1902– 6 presidential term. Sidney Chalhoub found that while disease outbreaks and inoculation practices were known in Rio throughout the nineteenth century, their increasingly negative association with that city’s

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enslaved, poor, and poorly housed populations was a function of a midcentury yellow fever outbreak. From then on, disease and poverty, both feared for their contagious character, were intertwined in the Brazilian imagination. Jeffrey Needell and Teresa Meade analyzed how the working class overwhelmingly opposed the implementation of Rio de Janeiro’s modern health codes in the early 1900s, many of them suspicious of the motives of the health reformers who invaded their homes and condemned their way of life.6 This “invasion” gave rise to the famous 1904 Revolta Contra Vacina, or Vaccine Revolt, in which lower classes pushed back against the actions of modern, scientific, social Darwinist, and positivist reformers who imposed imported notions of progress on public hygiene during the Brazilian Belle Époque. The reformers adopted a public health campaign of mosquito eradication and forced vaccinations, which served to frighten the impoverished tenement-dwelling urban populations. Insensitivity to cultural norms, such as the modesty of women, characterized the hated “mosquito inspectors.” Research on municipal services in São Paulo’s hinterland reveals that neither public administration of hygiene and sanitation nor the specific provisions to guide their administration were new to the late nineteenth century.7 The vaccine for smallpox, for example, was introduced to Brazil as early as 1804. Vaccination in general, the flashpoint of the 1904 Vaccine Revolt, was first mandated in the ordinary law of 1 October 1828.8 In fact, vaccination and other elements of the 1894 São Paulo health code were compiled from components of municipal ordinances dating back to the 1860s. And municipal councilors’ acknowledgment of their responsibility to provide this public service has an even longer history. So, long before the 1904 revolt, public health inspections and vaccinations were known elements of daily life.9 Well-developed public hygiene codes date back to the mid-nineteenth century, contrary to the long-held belief that they were a product of republican modernization programs. This chapter analyzes their impact on municipal public spending. We will find that public health bore little weight in municipal accounts for much of the nineteenth century, because public health demands remained contained by the infrequency of epidemics and the small size of settlements. In the absence of health crises, municipalities felt a far more urgent need to construct physical infrastructure. Toward the end of the empire, however, when populations expanded and towns and settlements enlarged, bringing more people into greater proximity, public health concerns became pressing, and the financial requirements expanded accordingly.

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Providing Public Health in the Empire We saw in chapter 2 that Brazil’s foundational documents included an extensive mandate of municipally provided public services. A key component of the mandate was to preserve and promote public health. The codes of ordinances to that end varied from municipality to municipality and changed over time, but all reflected the same preoccupations with threats to the public health. Ordinances were intended to prevent the spread of disease through mandatory vaccinations, quarantines of the ill, safeguards on the water supply, and regulations on the food supply (particularly beef).10 They prohibited throwing trash and dirty “water” in the streets, improperly disposing of goods that might rot, and improperly burying dead animals. Anything that emitted miasmas, from pig sties and latrines to tanneries and trash dumps, was illegal inside the settlements. Many municipalities included provisions to ensure the integrity of the medicine supply by threatening pharmacists and apothecaries with jail time and fines for selling altered or falsified drugs. They also required that physicians be properly licensed. Lepers were not allowed to beg on city streets, in parks and plazas, or along roads and highways; city inspectors were directed to transport compliant lepers to the hospital and to take recalcitrant lepers to jail. Municipal inspectors had the right to enter homes, yards, and businesses to ensure compliance with the public health code. From the beginning, municipal councils regulated actions and financial commitments that affected disease containment and prevention. Mandated responsibility and active investment were not one and the same, of course, and investment in public health under the empire remained sparse and sporadic. During that period, only Campinas and Amparo spent a significant sum on public health investments— around 5.5% of all spending on average (see table 4.1). The other municipalities spent around 2% or less of their budget on health.11 This was partly a function of their great and constant need to dedicate scarce resources to public works of physical infrastructure, especially given the newness of the municipalities. But the lack of regular spending on public health may have also been a function of the municipalities’ small size. Before 1870, these settlements lay beyond the state transportation network. While all had some commercial agricultural or pastoral base, their distance from ports and markets kept economic and population growth modest.12 Their location also helped prevent the spread of disease by limiting contact between

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municipalities. So spending on municipal public health was sporadic at best, and occurred in only a few municipalities before 1870. When disease did strike, most public health spending went to preventing further outbreaks, usually by isolating and treating the poorest members of the communities. It was common to require that families isolate their sick relatives at home or remove them to the country. Those that could not afford either option sent their family members and afiliados to the isolation hospitals built to house the indigent sick. Families were expected to pay a fee for this service, but we know from financial records that some of the costs were borne by public coffers. A smallpox outbreak in 1864 forced Rio Claro to spend almost 7% of its budget on the care of the sick, funds it was able to use thanks to a grant it received from the provincial government.13 The municipal council contributed 200 milréis to construct a charity house for the ill, and received another 720 milréis from the province to treat the victims of this disease.14 Campinas spent about 2% of expenditures in the 1866/1867 fiscal year on care for the poor ill and to build a lazaretto, or isolation hospital, for people with infectious diseases. The following year, about 5% of municipal spending went to the facility.15 From 1875 onward, this asylum received steady financial support from the municipal treasury, usually about 2% of spending. São Carlos spent almost 8% of its revenue on a lazaretto in 1877/78 in order to comply with municipal regulations on patient isolation after a major smallpox epidemic in 1874 almost doomed the new city.16 Nearby Araraquara invested in its own lazaretto just two years later, undoubtedly to contain the disease as it spread.17 In the 1887/88 and 1888/89 fiscal years, Amparo spent 5% and 8% of its funds, respectively, on aid to poor people afflicted with smallpox.18 If spending on disease containment and prevention was sporadic, proactive measures to protect the public health were even more so. Most municipalities spent money on services like street cleaning, animal control, and trash removal, but it was rarely obvious what had triggered the expenditures. The historical record offers no clue as to why the municipality of São Carlos spent money on streets and sanitation in 1878/79 but in no other year; why Ribeirão Preto dedicated 10% of its budget on streets and sanitation from 1878 to 1883 but no further; or why Rio Claro limited its spending in this account to the period from 1874 to 1876.19 Amparo spent nothing on trash removal until the 1880s, but then provided funds for the service in almost every subsequent year.20 After 1884, it also paid a modest sum for land to pen loose animals, which were often cited as a

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threat to public health. Araraquara periodically spent money on street cleaning and the extinction of stray dogs in the 1840s and 1850s.21 Only Campinas regularly paid for trash removal, street cleaning, and animal control.22 The absence of consistent funding for public health appears to be more attributable to municipal poverty than to an absence of need. As we saw in chapters 4 and 5, municipalities regularly requested additional funds from the provincial authorities. When Ribeirão Preto experienced a smallpox outbreak in 1885— one of many in the 1870s and 1880s— the lack of financial resources to combat the outbreak led the municipal council to appeal to the provincial government for aid and to solicit private citizens for additional funds.23 These expenditures were later reimbursed by the provincial government, making them some of the few subventions municipalities could count on. Funds to repair a leaky church roof were easier to veto than funds to stop an outbreak that could spread throughout the region. This willingness of the provincial government to fund after-thefact containment but not its prevention may have been the product of a flawed understanding of the cause of disease, but it is more likely that the government supported disease containment only when the financial need became undeniable. As we have seen, the majority of subvention appeals were for municipal infrastructure, but some of these requests were for projects related to public health, such as systems to provide piped drinking water. Water systems were costly— two to three times annual revenue in an era with no capital market to facilitate long-term borrowing— so municipalities were reliant on provincial subventions to build them. Franca received 6,000 milréis from the provincial treasury to bring clean drinking water to the town in 1873, an amount almost twice its revenue that year.24 Rio Claro asked for but did not receive 50,000 milréis to pipe water to the city in 1877, a sum worth double its total budget in that year.25 Araraquara received subvention funds of 10,000 milréis for piped potable water in 1882, or more than twice its annual revenue.26 Before 1891, a municipality’s borrowing money to pay for capital projects required approval by the provincial legislative assembly, something it rarely granted, especially before the 1880s. Of the seventeen loans authorized for our case study municipalities in the empire, more than half were for water projects (see table 4.5). Five of these seven municipalities borrowed money to install water infrastructure. Campinas received permission to borrow escalating sums of money in 1866, 1875, and 1889.

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Rio Claro was first authorized to contract a loan— for 15,000 milréis in 1873— for piped water and public fountain construction. It was approved again in 1881, this time borrowing money from the state treasury, for the same purpose.27 Amparo borrowed 40,000 milréis to pay for piped potable water and the construction of public fountains in 1879, and was authorized to raise another 100,000 milréis in 1889 by issuing a municipal bond. Araraquara and São Carlos issued bonds to pay for water in 1889, something made possible by the increasingly active but not yet formal São Paulo stock exchange.28 The recourse to debt authorizations rather than subventions, as we saw in chapter 4, was an elegant solution, because it tapped the loanable resources from the private sector and smoothed large capital requirements across a number of years while reducing strain on the provincial treasury. From the perspective of the municipalities, however, it eliminated supplemental grants and added the burden of debt service to their financial responsibilities. In the empire, then, public health spending was fairly limited because disease had not yet become a crisis the way it would in just a few short years. Before the arrival of the railroads, municipalities were relatively isolated from rapidly spreading disease such as yellow fever. Moreover, the urban centers were relatively small and not yet densely populated. Spending to meet the public health responsibilities mandated in the foundational documents seems to have occurred only in response to sporadic outbreaks or in the context of improving water supplies. The limited revenue was spent on infrastructure first and foremost. If resources were invested in public health, it was usually an act of response and containment, not prevention.

Municipal Finance and Public Health in the Republic The specter of disease haunted municipal administrators during the republic, their fears palpable in contemporary reports. The coffee boom generated an economic boom in São Paulo that attracted tens of thousands of immigrant laborers to its hinterland. The resulting economic and demographic expansion of the 1880s had accelerated the pace of urbanization, bringing a growing proportion of the population into closer proximity and straining the incipient public health infrastructure. The movement of goods and people along newly constructed rail lines also facilitated the rapid spread of disease. This new technology, which had produced so

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much wealth for the region, had foreshortened the natural disease buffers of time and distance, pushing municipal administrators to work proactively to protect the health of their settlements. Prevention became paramount. Clearing streets of trash, keeping water supplies free of contaminants, and managing the waste of people and animals consumed a growing proportion of municipal resources. Throughout Brazil, a new understanding of the causes and spread of disease created the impetus for urban renewal through “improvements” intended to bring haphazardly constructed, poorly supplied, disease-ridden, dirty cities into a progressive era of light and health.29 In our municipalities, public health became the third-largest category of municipal spending after public works and debt service (see table 5.2). Yellow fever was the catalyst for a new, urgent public health campaign in São Paulo. We saw in the opening of this chapter that it originated in Campinas with a Swiss immigrant and led to scores of deaths. The waves of yellow fever that swept through the state put municipalities on high alert. A yellow fever outbreak in 1895 in São Simão, a municipality in the northwestern corner of the state near Ribeirão Preto and Franca, prompted authorities in Ribeirão to send health workers to offer assistance in an effort to keep the disease from spreading to its own settlements.30 This self-preserving act of charity was unsuccessful, for Ribeirão was later hit by a “terrible epidemic of yellow fever that laid waste to this city.”31 This time, it was Franca that sought to protect itself. Its intendant observed, “Yellow fever in the advanced and opulent city of Ribeirão Preto spread, naturally, great panic in all the zone served by the Mogiana [railway] line, obligating this intendancy to put the most rigorous measures in practice in order to keep our city from becoming a victim to the invasion of this terrible scourge.”32 Municipal officials, now armed with the science behind yellow fever transmission, worked to remove all possible sources of threat. They destroyed banana trees, covered wells, disinfected latrines, and prohibited pigs inside the city. The one action Franca refused was to “disrupt the free transit of persons seeking out this city, the contrary of what is happening in other places.”33 This telling statement suggests that other municipalities were closing themselves off to strangers during the outbreak. The authorities’ response to this outbreak was wholly reactive, but in intervening years, when the disease was in remission, councils began to approve proactive measures to sanitize the disease environment. After the 1895 yellow fever outbreak had abated, Ribeirão Preto undertook a

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number of improvements related to hygiene. It constructed a quarantine hospital for disease containment, built new roads and curbs designed to channel water runoff in city streets, and eliminated stagnant water in the municipality’s eponymous river by rechanneling its flow and drying out its banks. The 1899 inaugural address by the municipal council president praised the work of the outgoing council to curb pestilence and appealed for continued vigilance on this front: “With the competence, skill, and patriotism of which you [new council members] are endowed, the municipality hopes that you will do all you can to attend to the necessities and improvements this city lacks, keeping in sight above all its sanitation and hygiene.”34 The intendant’s January 1902 report again emphasized the need to dedicate resources to disease containment and eradication, even though the work was expensive. This work included eradicating the old outhouses that were “draining into our porous soil” and providing “excellent allies to yellow fever.”35 The mayor’s report delivered the following January noted no change in the number of fatalities in 1902 despite the increase in population, a success credited to the efforts of the hygiene inspector’s office.36 Rich historical resources from this era allow us to look inside municipal public health accounts to see how administrators viewed their evolving responsibilities and made their decisions in prioritizing projects and allocating scarce resources. Administrators allocated expenditures on public health into three divisions: Hygiene and Aid to Indigents (Hygiene e Assistência), Streets and Sanitation (Limpeza Pública), and Water and Sewer (Água e Esgotos). All three divisions consumed a major share of public spending. Statewide on average, about 9% of all municipal spending went to promoting and protecting public health in the republic, reaching as high as 17% in some years (table 6.1). Health expenditures in most of the seven municipalities in our study exceeded the state average for the republic. For individual municipalities, peaks came sporadically throughout the period as crises appeared and opportunities for capital improvements arose. Hygiene and Aid to Indigents The frontline defense of municipal public health was in the hands of the municipality’s Division of Hygiene and Aid to Indigents, responsible for disease containment and eradication. The State of São Paulo created an infrastructure to oversee public hygiene in 1892, and passed a compre-

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table 6.1 Municipal public health spending as percentage of total municipal spending, 1894– 1928

Amparo Araraquara Campinas Franca Ribeirão Preto Rio Claro São Carlos São Paulo state

Highest

Year

Lowest

Year

Average

No. observations

27.7 16.0 39.8 45.1 33.1 31.0 39.2 17.4

1905 1902 1919 1914 1895 1903 1902 1909

2.5 2.6 2.4 2.9 3.6 0.4 3.6 0.8

1920 1920 1911 1905 1894 1920 1910 1920

11.0 8.1 19.6 19.5 6.6 9.7 16.2 9.1

28 21 28 24 28 25 27 34

Source: Elaborated by the author from published financial statements. São Paulo, Anuários estatísticos, balanços de receitas e despezas, 1894– 1928. Note: Public health is the sum of hygiene and aid to indigents, water and sewer, and streets and sanitation. São Paulo state is the average of all municipalities in the state, net of the seven cases under study.

hensive health code in 1894 that prompted most municipalities to write their own ordinances, resolutions, or laws to regulate it.37 Public hygiene entailed, at least on paper, a massive undertaking. According to the intendant of Franca, there was no greater pursuit. He wrote in 1898, “Hygiene undoubtedly shows societies that they seek scientific bases for their consolidation through laws that guarantee the most noble and sacred of all proprieties— health, life!”38 The motivation was the constant threat of epidemic disease and the effect that threat could have on the economy. The health of the economy depended on the ability to attract immigrant laborers to work on the coffee plantations. Reputations of poor sanitation and hygiene could divert this essential resource from a municipality or region. Public health went hand in hand with economic well-being.39 The 1895 health code of Campinas typifies how municipalities regulated public hygiene through the work of “delegates,” or inspectors.40 These inspectors were assigned districts and authorized to issue fines for infractions of hygiene ordinances, and the chief inspector reported directly to the intendant’s office. They visited homes in their district and reported on the conditions they found. They also visited hospitals, maternity wards, private nursing wards, rooming houses, hotels, and multifamily housing (cortiços). In addition to inspections, they held vaccination clinics at least once a week in a set location or in the homes of patients, and they supplied professional aid to indigents with contagious diseases. They inspected restaurants and other establishments that sold foodstuffs (slaughterhouses, public markets, butcher shops, fruit stands, and so on), and seized deteriorating food if they suspected it of being in poor condition or prejudicial to public health.

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The inspections were meant to quickly identify cases of infectious ailments and to determine containment measures. Inspectors checked the water supply and sewer service, trash collection, and all other services related to public sanitation. Then they reported on problems to be remedied. They verified the isolation conditions of patients in hospitals and private homes, and determined the need for disinfections and oversaw them, noting the locales and the chemical substances used. Moreover, they assessed buildings to determine if the structures presented risks to the public health, established a time frame for making improvements where health issues existed, and removed materials considered noxious to public health. And, via inspections and communication with principals, the inspectors prescribed measures for school hygiene. They had extensive powers to impose fines for failure to comply with any of Campinas’s health ordinances. Most important, they had the power to identify unhealthy buildings for demolition.41 The amount spent on hygiene and assistance by the seven municipalities in this study was similar to statewide averages for all municipalities: around 2% of total expenditures. Only Amparo’s was higher, at 4% for the republican period. While average outlays for hygiene and assistance were small, outbreaks sometimes made this the largest spending category in a given year. Campinas, Franca, and São Carlos, for example, all registered their greatest percentage of spending in 1895 or 1896, during epidemics. São Carlos was one of the hardest hit by disease in 1896, when it suffered a devastating outbreak of yellow fever, as we saw in chapter 4. Its spending percentage on hygiene and assistance, normally about 2% of total expenditures, jumped to 27% because of outlays for hospitals, medicines, inspections, and medical personnel. The municipality registered a huge deficit in its finances as a result.42 The elevated spending persisted for several years as it struggled to get disease under control and establish regular services to improve public hygiene. Its regional neighbors Ribeirão Preto and Franca also experienced yellow fever scares in 1895– 96. Campinas suffered five separate outbreaks in the 1890s, pushing its hygiene and assistance spending close to 20% of all spending in that decade.43 Much of the spending on hygiene and assistance went to construct, maintain, and repair the public isolation hospitals that helped contain outbreaks. The Campinas intendant’s report for 1894 noted that the municipality had three hospitals, but that only the Asylo de Morpheticos, or Leper Asylum, was able to accept new patients. A second, the isolation

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hospital Lazaretto de Fundão, was in need of repairs, and the third, Hospital dos Variolosos or the smallpox hospital, needed to be relocated because it was open under improper conditions in an improper location.44 In the following year, the intendant reported that the first hospital underwent improvements and cleaning and was supplied with new furniture; the second was painted and its floor repaved; and the third received seven new patients but no improvements. But the report also cited several areas of need: constructing new rooms for the first hospital; providing new gowns and mattresses and a pharmacist for the second; and transferring the third to a new location. The fate of the third hospital was especially urgent; it was deemed inadequate and a danger to local citizens.45 The 1896 intendant’s report for Ribeirão Preto noted that construction had begun on an isolation hospital to attend to the city’s health needs.46 In his 1896 report, Franca’s intendant lamented the need to burn down its isolation hospital to purge the smallpox infection of 1895.47 Araraquara periodically maintained a municipal isolation hospital in addition to the one it subsidized, but only in times of outbreak.48 Municipalities that did not operate their own hospitals provided health infrastructure to their citizens through regular financial support of hospitals operated by charitable organizations. In 1908, Rio Claro’s municipal council approved a special 4% surtax on all existing taxes above 5,000 milréis to support the hospital Santa Casa de Misericórdia and the charitable organization Amparo aos Lazaros, which maintained the Hospital dos Lazaros. This municipal funding continued in future years, enabling expansions to the Santa Casa facility.49 Araraquara also depended on— and subsidized— a Santa Casa de Misericórdia hospital to serve as the site for disease containment. It covered the pharmacy bills for treatment of the indigent and paid for the burial of those who did not survive.50 When the Spanish influenza hit these municipalities in 1918, spending on hygiene and assistance more than doubled in some communities. In Ribeirão Preto, the Great War had disrupted trade and a June freeze had harmed coffee production, so its coffers were already threatened when a sick homeless man was found in the municipal woods at the end of October and taken to the isolation hospital. He was diagnosed as having the flu. Within a month, Ribeirão Preto had spent more than four times its usual annual outlays in battling the ensuing epidemic.51 The close contact between cities and the easy movement of infected people made it impossible to contain the virus, which raged through Rio de Janeiro, São Paulo city, and nearby São Simão. Ribeirão Preto’s authorities, citizens,

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and charities came together quickly to address the crisis. Merchants, taking stock of medications on hand and finding them insufficient, asked the mayor’s office to intervene with the state’s interior secretary to procure more supplies. Charitable organizations offered buildings to serve as isolation hospitals to treat all those who lacked family to care for them at home. In turn, the municipality hired nurses to staff the hospitals, where more than one hundred indigents were treated, mostly successfully, in the month of November.52 In his accounting for the extraordinary circumstances, the mayor of Ribeirão Preto noted that the municipality could not have denied aid to these sick poor, but it never would have been able to acquire and staff a municipal hospital without the assistance of charitable organizations, the Red Cross among them. In the end, the bill for that one month of intensive intervention cost the municipality 30,000 milréis, almost 4% of its total annual spending. Streets and Sanitation Outbreaks of disease elicited the most concern, but the campaign for improved public health was also being waged, albeit in a more fundamental and ongoing fashion, by the Division of Streets and Sanitation. Its services encompassed trash removal, street sweeping, weeding, animal control— including nighttime poisoning of stray dogs and the removal of dead animals from the streets— and cleaning of public urinals. In the republic, the streets and sanitation expenditures exceeded those for hygiene and assistance, and were more reliably steady because they represented ongoing efforts rather than impromptu response to crises. In the seven municipalities in our study, this division accounted for between 3 and 6% of expenditures on average over the republic; statewide, municipalities spent just over 5% on streets and sanitation. Of the seven, Campinas was second only to Rio Claro in spending on streets and sanitation.53 Financial statements from the last decade of the empire show that it had budgeted from 4 to 7% of its spending on this service.54 By the 1890s, its streets and sanitation service was well established if not entirely satisfactory. A report from 1894 stated that “street cleaning continued as usual, with the usual complaints from the citizenry.”55 Complaints of inadequate service were no doubt partly due to the difficulties of managing the contractors, but it was also a function of financial shortfalls. Campinas received some help from a private benefactor when the Mac Hardy Company, a locally based major machinery and metalwork-

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ing firm, donated a vehicle to transport trash in the hopes of improving its collection.56 Still, the number of carts for trash removal (fourteen for a population of approximately 64,000) was insufficient.57 Campinas experienced rapid population growth after the turn of the century, a response to the economic upturn from the 1906 coffee valorization project that introduced state purchase of excess coffee stocks, thereby guaranteeing planters’ income.58 A consequence of this growth was that streets and sanitation services could not keep up. In 1912, the contractors “exerted great effort to fulfill their contract,” but were unable to supply adequate services to keep up.59 In the wake of citizen complaints, Campinas authorities forced the streets and sanitation contractors to give up their contracts and issued a call for proposals for trash removal service. Receiving none, the municipality was compelled to reabsorb trash service as a municipally provided good. The city inspector’s 1913 report to the mayor noted that the failure of streets and sanitation to keep pace with urbanization was but one of the many shortfalls that could be blamed on rapid population growth. A new neighborhood might have new restaurants, but no water and sewer service or adequate trash dump site. Better cleaning of public urinals and the installation of water spigots were also listed as priorities for newly settled urban areas. As a result, most extraordinary expenditures in 1913 were dedicated to streets and sanitation, far beyond the budgeted funding.60 Similarly, in Ribeirão Preto, expansion of its urban settlements required investment in extending public services like street cleaning and trash removal. An 1895 report by a representative of the State Sanitation Commission had praised the prosperity and prospects of this region, calling Ribeirão Preto “one of the most important” cities in the state of São Paulo due to its place “as the center of an extraordinarily rich municipality of coffee culture based on top quality soil,” and hailed the various works of sanitation already undertaken.61 But it found that urgent improvements were needed “for its daily progress” to become “a city of first order in the near future.” These improvements included paving the streets; cleaning and draining the riverside lands; methodically organizing the collection and removal of trash from the streets, homes, and waterways; introducing a regular system of channeling sewage; and improving the water supply.62 Ribeirão had grown from a population of 5,000 to more than 55,000 in just twenty-five years, challenging administrators to keep up with not only the physical infrastructure— they also had to manage the waste produced by such a rapidly expanding population. A major challenge was figuring out where to put it. We learn from the 1920 mayor’s report that histor-

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ically, urban trash had been sold to surrounding farmers, but the rural dumps created breeding grounds for flies and produced terrible odors that were offensive to neighbors. By 1916 it had become increasingly difficult to find a farm far enough from the city to receive the trash. Consequently, Ribeirão Preto decided to invest in a machine to grind up the trash, which could then be sold as fertilizer. Street hygiene had also been improved with the installation of public bathrooms near the public market.63 Ribeirão Preto continued its investment in streets and sanitation as the population grew throughout the republic. In 1924, it purchased a mechanical street sweeper and installed a new public bathroom in the Plaza 13 de Maio.64 Franca’s administrators made regular mention of the sanitary state of the municipality beginning in the late 1890s, when the sudden influx of population put pressure on limited public services. In an 1896 report, Franca’s intendant noted “no improvement in this category, no enterprise; everything is yet to be done.”65 Perhaps the lack of improvement was a function of the slower pace of expansion. Among the latest of our seven municipalities to be drawn into the coffee boom, its population had merely doubled in the twenty-five years between 1874 and the turn of the century. Franca finally solicited bids from contractors in 1900.66 The winning contractor was responsible for trash removal, street cleaning, and street and gutter maintenance. Renewal of such a contract was contingent on the quality of the services received, so when administrators complained about the quality of work performed by the contractor a few years later, alleging that it was not up to the conditions demanded in the contract, they were laying the groundwork to cancel the arrangement. The contractor retorted, however, that the price he was getting did not allow for perfect service.67 Franca’s intendant seems to admit as much. He had complained in 1905 that the insufficient work by streets and sanitation was a by-product of the lack of funding, and acknowledged that the work was complicated by private disdain for public health.68 The lack of direct control over the service led Franca’s municipal leaders to complain that it “leaves much to be desired, in spite of the great effort on the part of the Mayor’s office to improve it.”69 Water and Sewer The third component of public health services, water and sewer networks, was the most costly, yet it was also the most essential public good provided by municipalities. Some municipalities paid for the waterworks them-

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selves, others contracted private enterprises to construct and maintain the systems as profit-seeking ventures, and still others received state aid to construct their systems.70 Because of these various funding schemes, the weight of water and sewer expenses on municipal finances varied broadly from less than 1% (Ribeirão Preto) to 17% of average expenditures (Franca). Unlike other public health initiatives, water and sewer accounts did not regularly receive funding, so the averages reflect occasional significant expenditures in some years and virtually no expenditures in others.71 The major outlays were for the capital required to construct, expand, and repair these systems. In the years when investment occurred, spending on water and sewer service could consume anywhere from 20 to 40% or more of a municipality’s finances. Campinas initially chose to contract out its water and sewer service, keeping its outlays fairly low. The Companhia Campineira de Águas e Esgotos, or Campinas Water and Sewer Company, formed in 1887, secured the rights to install, maintain, and profit from the water and sewer network.72 Less than a decade later, however, administrators complained of poor water quality due to its contamination by heavy rains. They also made note of the “friction” between the company and the mayor’s office.73 There were multiple causes of this friction: the company refused to exempt public school buildings from water fees; it neglected to expand the network to keep up with urban expansion as the settlement and number of consumers grew (a study included in the 1913 mayoral report verified that insufficient water supply, not excessive consumption, was the root cause for water shortages); and it failed to address multiple complaints about the inadequacy of its sewage treatment. These problems continued for another thirteen years before the license was finally rescinded in 1924 and the water company returned to municipal control.74 Rio Claro also privatized the installation of its water and sewer network, although it had more success in this realm than Campinas. The initial contract with the Empreza de Água e Exgottos de Rio Claro, signed in July 1904, was updated and renewed in 1909 to secure the monopoly rights of the private firm through 1930.75 As part of the arrangement, the company agreed to expand the water supply as urbanization of an area reached a density of fifteen buildings per one hundred meters. In exchange, the municipal council acted as enforcer for the payment of water rates. Citizens who failed to pay their water bill were pressured by the council to do so or face fines. Whereas the council had been on the hook for this bill before the 1909 renegotiated contract, it was now only liable

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for unpaid water rates if it took no action to enforce their payment. The new contract to privatize this public service freed Rio Claro from a crushing liability.76 In what we can only infer was the result of tension between municipality and contractor, Araraquara issued a loan in 1907 to acquire the municipality’s subcontracted water and sewer service. The urgency to do so must have been great, because the municipal council’s annual report clearly stated that the loan for this acquisition took place in a year when finances were tight and all other public works were put on hold.77 Later reports make clear the motivation for the dramatic move: severe drought. This drought, the mayor reported, had left the water supply insufficient, the sewer system deficient, and the public canal “a true mosquito hatchery.”78 In 1909, Araraquara reported that demand for water outstripped supply. In the short run, it cut the allocation of water to the railways, saving 120,000 liters, and installing an electric pump in its Pinheiros reservoir. These measures alleviated the water supply shortage while the municipality moved to identify and tap new springs.79 In Franca, the need for a piped water and closed sewer system was identified long before finances were available. Implementation took place in fits and starts, and supply almost always fell short of demand. In 1895, the municipal council asked the intendant to look at the feasibility of installing a modern water system, but soon found out that the municipal coffers lacked the funds to even pay for the study.80 At that time, water was supplied from small existing springs and piped to a public fountain in a central plaza. By the middle of 1897, a new contract to supply piped water stipulated expanding delivery by increasing the number of public fountains or spigots to ten, but the intendant judged this plan inadequate and appealed to the municipal council to authorize spending for an additional ten fountains.81 A new potable water supply was inaugurated at the end of 1902 to serve the urban area. It “suffered no shortages” even during the “rigorous drought” the region experienced. Urban growth remained steady, however, and by 1911 the municipality was again appealing for new sources of water. The mayor wrote that “the need to augment the supply of potable water cannot be put off any longer, given that the current supply is completely insufficient to supply our population in times of drought even though we possess three springs of the precious liquid.”82 Ironically, the water Franca’s mayor so urgently needed in drought years could easily become devastating in times of heavy rains, wiping out streets and bridges. As we saw in chapter 5, public works projects on gut-

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ters, curbs, and storm drains were undertaken to channel water during the torrential downpours. Every year, street reconstruction consumed the public works budget (or was put off for lack of funds). Franca’s mayor suggested in 1911 that the municipal council place a moratorium on new gutter construction until a modern sewer system could be installed. When the project began the following year— which would also increase the potable water supply— it was funded by a massive loan and accounted for between 40 and 43% of total expenditures in 1912– 14.83 It was so expensive that the average weight of water and sewer expenditures in Franca’s accounts across the period was 17%, which includes the much smaller annual outlays after this peak period of construction was completed. For the municipalities that managed their own networks, the water and sewer service turned out to be a good investment. By 1920, Franca’s water and sewer network had become a profit center for the municipality, taking in more than four times the amount spent on its maintenance that year and contributing more than 20% of total revenue through the end of the republic.84 The other municipalities that ran their networks publicly, rather than through private contract, also ended up profiting from the venture. Once Campinas regained control over its water and sewer service, the revenues from services went from barely covering costs to making a net contribution of 16% of total revenue in just three years. São Carlos’s water service turned a profit in all years but one, when its expenditures were three times the revenues due to capital investments. The investment in water and sewer networks, then, made good business sense. It reduced the conditions that promoted disease, which reduced overall public health costs, and generated surplus revenue from usage fees. There is some indication that administrators were responsive to the need to extend public services throughout their municipality regardless of the socioeconomic position of the eventual consumers, usually in the context of public health needs. In 1910s Amparo, for example, the mayor directed the municipal council to extend a sewer beyond its projected terminus in response to a petition from residents. The council approved a similar petition from the Anna Cintra hospital, setting aside funds to install a sewer there. The water network was extended to connect a school to the municipal service, and a new water spigot was to be installed on Bernardino de Campos Street, where, as we saw in chapter 5, lighting was also to be installed. Urban growth spurred the council to authorize the appropriation of private property to expand the sewer network to a developing neighborhood.85

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In Campinas, when authorities constructed a new market and slaughterhouse to meet the expanding community’s needs, these new workingclass neighborhoods also received extended water and sewer lines to reduce the precariousness of their infrastructure.86 This was true as well in Ribeirão Preto, where water and sewer service was introduced thanks to a generous 1895 subvention from the State of São Paulo. By 1902, this service had to be expanded again to extend beyond the city center and to put an end to the system of cesspools, a known public health threat. By 1904, water and sewer service was installed in all but a few homes in the recently established neighborhoods of Vila Tibério, República, and Barracão, and was extended to the settlement of Vila Bomfim.87 In 1908, merchants and industrialists in Itirapina, a settlement about forty kilometers from Rio Claro’s municipal seat, complained to the municipal council of their lack of water, prompting the public works department to order a study of the water supply conditions.88 The council eventually authorized a loan to pay for the expansion of water service in the Itirapina district more than a decade later.89 When water service failed in these regions, as it did in Vila Bomfim in 1908 because of a devastating drought, neighborhood representatives went to the mayor’s office to complain. The mayor responded immediately with an urgent request to the water company, communicating that he had “received a complaint signed by more than fifty inhabitants of Vila Bomfim regarding lack of water” and asking the company to remedy the problem at once. A series of letters was exchanged between the mayor and the manager of Empreza de Água e Exgottos, with the mayor reminding the company of its contractual obligations to extend water and sewer service to new neighborhoods, provide the requisite volume of water around the clock, and reduce its rates to consumers, given that its revenues exceeded the returns specified in the contract. The vigorous and heated exchanges between municipality and public utility, in which increasingly pointed barbs and defensive positions were stated and rebutted and each side accused the other of bad faith, always ended with a complimentary close: “Health and brotherhood.” This colorful correspondence shows, nevertheless, that municipal officials took public complaints seriously and worked to satisfy the needs of their citizens.90 Thus far, we have seen that after 1889, spending on public health was more evident and urgent than in the empire, and that municipal administrators devoted considerable thought and attention to the threats to public health and to their remedy. Planning, vigilance, and maintenance

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184 table 6.2 Public health spending per capita, 1835– 1928 (nominal and real milréis)

Amparo Araraquara Campinas Franca Ribeirão Preto Rio Claro São Carlos Highest/ lowest Highest/middle Second lowest/lowest

1830s

1850s

0.0004

0.0011 0.0012

1870s

1880s

1890s

1900s

1910s

1920s

0.902 0.748 2.371 0.129 1.178 0.872 1.038

1.220 0.982 3.294 0.950 0.618 0.933 2.195

0.957 0.968 3.810 4.684 0.597 0.254 1.882

0.457

0.1061

0.158 0.003 0.451

3.740 0.357 0.626 0.469 1.376

18.5× 2.6× 5.9×

5.3× 3.4× 1.5×

18.4× 4.8× 3.8×

10.5× 6.0× 1.3×

0.031 0.0043

3.9× 1.1×

0.0003 0.0114 14.5× 2.8× 11.2×

Source: Elaborated by the author from manuscript and published financial statements. ALESP Municipal collections, 1835– 1889; São Paulo, Anuários estatísticos, 1894– 1928, balanços de receita e despeza; Camargo, Crescimento, vols. 2 and 3, tables 4, 5, 6, 14, 15, and 16. Deflator is Catão, “A New Wholesale Price Index,” and Haddad, “Growth,” 1913 = 100. Note: Spending is nominal for 1830s and 1850s, real after 1870. All spending is actual except for 1870s and 1880s Campinas, 1880s São Carlos, and 1880s Ribeirão Preto.

were heightened, but the financial vulnerability of the earlier period remained. An epidemic could greatly disrupt municipal services, because administrators had to immediately shift resources to combat and contain the outbreaks. This was particularly true for the municipalities that were less endowed with financial resources than others. Table 6.2 shows that the disparity in per capita public health spending between municipalities was great. In part, this is a function of the uneven capital expenditures occurring when water and sewer networks were installed and extended. Not every municipality invested at the same moment as every other, so average real per capita spending fluctuated quite a bit in public health categories, and some municipalities outsourced their public health spending while others provided services themselves. Even bearing these caveats in mind, the disparities were enormous. The wealthiest municipality, Campinas, spent anywhere from ten to eighteen times the per capita amount spent by the poorest municipality in most decades. Even the difference between the two municipalities paying out the least was wide. In the republic, the sixth lowest spent from 130 to 590 milréis per capita on public heath for every 100 milréis invested by the lowest spending municipality. This disparity in spending was driven by the disparity in revenue each municipality had at its disposal, which was especially problematic in times of crisis. A smallpox outbreak in Franca in 1895 resulted in many unan-

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ticipated expenses that placed tremendous strain on its finances.91 During the outbreak, it had to hire nurses to treat the ill. In the aftermath, state sanitary officials ordered its lazaretto that had treated the patients to be burned due to the impossibility of disinfecting the building. This imposed the new and immediate burden of funding a new hospital. A home of a smallpox patient was also burned, for which he was indemnified by the municipality. And the cemetery where the smallpox victims were buried needed wire fencing. The expenses for treatment of the ill, compensation of nurses, purchase of supplies for the hospital, and so forth “were enormous,” forcing the intendant to take out a loan to pay for them.92 These expenses meant that most public works projects were suspended that year. A repeated outbreak in 1911, which thankfully spared the lives of all infected, again drained Franca’s coffers. According to the mayor, “The expenditures made by the municipal council on this epidemic were, as you know, almost greater than the financial resources of the municipality.” As was so often the case, the council had to wait for financial assistance from the state government to help it weather this crisis.93 A bigger problem in the provision of public health services, and a major reason why expenditures for it followed such an uneven pattern, was that administrators paid for what they could when they could, and funds were often low. When shortfalls occurred, particularly in crisis years, it was up to local administrators to find a solution to the imbalance. An 1897 report by the budget committee of Ribeirão Preto’s municipal council expressed concern about the growing financial needs of the municipality, needs which the budget proposed to meet via increased taxes “that are already onerous,” affecting commerce and “the classes least protected by good fortune.”94 The budget committee proposed various solutions to this problem, such as taxing businesses in rural areas and economizing on municipal personnel costs, which, it pointed out, consumed almost 20% of municipal funds. The one area it warned should be protected from cuts, however, was public hygiene given the repeated epidemics of the era. Instead, all planned public works projects and routine maintenance were canceled except those that could not be put off, such as road repairs in anticipation of the rainy season. Municipal employees went unpaid. Such tactics were repeated throughout the other municipalities as well: public health was preserved at the expense of other budget items. To keep the dreaded yellow fever at bay, money went to cleaning brooks— scraping, straightening, and widening their beds— and “sanitizing the extensive swamps that surround this city” by draining off stagnant waters.95

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When unpaid debts overwhelmed municipal finances, as they did periodically, the municipality’s chief executive and councilors turned to loans to cover the deficits. In 1903 Franca, the intendant called attention to the “precarious state of municipal coffers in consequence of the necessary, grand, and imperious improvements demanded by the highest concerns for the public good.”96 To alleviate the critical situation of the municipal finances, he recommended contracting a loan enough to pay for a series of small projects demanding prompt attention. He had already suspended the execution of all projects under way, even those of urgent need, and sought the loan to resume the most important ones. Yet despite these measures to balance the finances, a yellow fever outbreak required hiring public health personnel to address the problem, which further compromised the financial picture. The administration issued bearer bonds to pay down debt.97 As of the second quarter of 1904, public works remained suspended due to financial shortages, but the report noted that street cleaning was provided “with all energy,” and that “the city is in optimum hygienic state.”98 Ribeirão Preto had experienced similar difficulties in paying its bills. Its mayor convened a special committee in 1911 to look into the sources of the problem. The committee found that the greatest source of municipal revenue— the tax on industries and professions— was not being well documented. The same was true for the taxes and fees on rental properties, vehicles, and the public market and slaughterhouse. As a result, the municipality was going into unnecessary debt to cover its expenditures. The implementation of a double-entry bookkeeping system and thorough collection of taxes produced immediate results in improving annual revenue.99 Rio Claro had conducted a new census of its buildings in 1893 so that it could keep up with the changing urban footprint when collecting the taxes for street cleaning and maintenance.100 Better tax collection helped when a municipality faced unplanned expenditures, but it did not solve the problem of paying for capital projects whose cost far exceeded annual revenue. For those unmet financial needs, mayors and municipal councils required significant infusions of funds, so they turned to the capital markets. Ribeirão Preto raised such a loan in 1908 to expropriate its public market, which had been privately contracted and was judged to be lacking in services and hygiene.101 In the end, though, the full 400,000-milréis loan went to paying off debts in almost every budget category. So great was the need for financial relief to resolve past debts, that no money was left over for the expropriation. An-

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other example occurred in the same municipality just one year later. The municipal council noted that it could not balance revenues with impending expenses for the 1910 fiscal year due to the enormous debt the current mayor inherited when he took office in 1908. The council’s finance committee authorized the mayor to contract a long-term loan to consolidate all the debts of the municipality. This allowed Ribeirão Preto to remove the existing debts from its balance sheets and dedicate those funds to projects that could not be put off.102 The mayor’s report from 1920, a lengthy retrospective on his nine years in office, confirms that the money was raised via municipal bonds that “have always had high quotes on the Bolsa” thanks to the reputation and performance of the municipal council.103 Campinas also raised money via the bond market to refinance its debt and cover projected deficits. It issued one such bond in 1911. The 6% bonds paid down the 1907 8% bond issue, resulting in funds to cover the deficit and lower debt service.104 Given the fiscal structure that poorly provided for municipal investment in the public good, municipal finances were easily thrown into distress by epidemic diseases, natural disasters, and poor revenue collection up to World War I. Administrators responded by borrowing money from the state government, deferring spending on scheduled maintenance and upkeep, canceling or deferring spending on new construction and new projects, diverting funds from one budget line to another, borrowing money through bond issues, and seeking ways to generate revenue or cost savings through the provision of public services. The most pressing reasons for financial flexibility and deficit spending continued to be concerns about public health. Administrators responded to the threats and realities of outbreaks without consideration to the long-term financial ramifications. Immediate action could contain a threat, but it was usually followed by a financial hangover. Still, administrators defended their actions with statistics that boasted low mortality rates. Containment, control, and eradication of disease were prioritized, no matter what state municipal finances were in. By the 1920s, public finance for public health finally stabilized. Total municipal spending in 1920 was lower in real per capita terms than it had been at the turn of the century, but reports from all municipalities indicated that financial health and public health were at their strongest. For all the municipalities except Amparo and Franca, health spending per capita was relatively constant moving into this last decade of the republic. The return to normalcy after the disruptions of the war years and the

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influenza pandemic combined with long-fought improvements in revenue collection provided administrators with stable finances enabling continued investments in public health infrastructure and services. For the first time, indications of abundance appeared in the reports. The mayor of Ribeirão Preto reflected on nine long years in municipal administration and listed the many accomplishments of his administration, including improved revenue collection, important investment in the expansion of municipal services, and substantial reduction of the debt burden. As he stepped down in 1920, he affirmed, “We leave the municipal finances in a prosperous and favorable situation.”105 Franca’s mayor, engaging in positive hyperbole in his 1921 report, wrote, “It is with a heart overflowing in satisfaction that I can tell my colleagues . . . that the financial state of our municipality is very prosperous.” He cited better management of public revenue, combined with access to the capital markets to issue municipal bonds, as reasons for this abundance. The report for 1920– 22 attributed Franca’s financial health to revenue collections that exceeded the budget projections.106 “Unforeseen expenditures and services that could not be put off,” however, continued to weigh against revenues. The 1919 outbreak of Spanish influenza, for example, pushed Ribeirão Preto’s expenditures on hygiene and assistance upward from its usually negligible sum of less than 1% to almost 4% of total expenditures.107 But these types of health-related crises were increasingly rare. Imbalances in public finance were now almost entirely due to public works spending to address unforeseen needs. The only major health issue facing Franca officials in 1925 was the urgent need to expand the cemetery, owing to the rapid development of the city. The same was true for Ribeirão Preto in 1929.108 These needs, like other public hygiene needs, including better public restrooms and additional street sweepers, could be planned for and paid for out of annual revenue or through bond issues. Broad gains in public health from earlier investments in its infrastructure and services had reduced the weight of this good in public accounts and generated strong returns, social as well as financial. This positive correlation between public health and financial health was employed in a 1926 petition to the municipal council of Franca by the Instituto Biotherapico Brasileiro for a subvention to found a Pasteur Institute in that city. Representatives of the institute sought to eradicate rabies through a comprehensive vaccination program. The two-page request repeatedly acknowledged that the sum involved far exceeded the annual revenue of the municipality, but argued for the humanitarian nature of the project (the

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eradication of an always-fatal disease) as well as the positive financial externalities. The request invoked the historic investments in the sewer network, paving projects, and other large-scale improvements that had also been well beyond Franca’s annual income but nonetheless undertaken through loans backed by the municipality. Implicit was the argument that good health meant a good business environment: Note well, distinguished councilmen, that the subvention that we humbly request, beyond its highly humanitarian ends and its broad reach, will not unbalance the finances of the Franca Council; to the contrary, it will bring uncontested material benefits to this land that will result in greater income for municipal revenues.109

The message was clear: those prior investments, costly though they were, had reaped financial rewards for the municipality. The subvention was similarly costly but would have similar benefits.

Conclusions The historical sources on public health show that municipal councils were concerned with containing disease and promoting health in the empire, but that the newness of most settlements placed this type of service well behind the councils’ many foundational responsibilities. Over time, as the basic infrastructure fell into place and the population increased in numbers and density, spending on services to maintain the cleanliness and hygiene of these settlements became more common. The preoccupation with a hygienic environment assumed greater importance around the turn of the twentieth century, when disease had the potential to discourage immigrants from settling in the hinterland communities. Their labor was essential to sustaining and expanding the coffee economy, so municipal councils took public health seriously. The emergent understanding of the transmission of disease, first through casual observation of the relationship between stagnant or contaminated water and illness and later through scientific certainty, promoted local ordinances to identify possible sources of disease and contamination and spending to address those needs. As we saw in chapter 5, most municipal spending across the onehundred-year span went to public works projects like road building; street alignment, paving and repair; bridge construction and repair; and con-

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struction and upkeep of municipal buildings. But some public works projects, such as those to improve water flow through the cities by straightening out rivers and canals and those to upgrade the system of storm drains and gutters, directly benefited public health. Spending on public health in the later years of the empire and throughout the republic was budgeted with an eye toward preventative maintenance. It usually included sums for hygiene and aid to the indigent in order to inspect for and remedy possible causes of disease and for spending on streets and sanitation to haul the trash and control stray animals that contributed to disease. This spending was modest in importance relative to spending on public works projects and major infrastructural investments like electric lighting and water and sewer networks, and services were privatized when possible to lessen their strain on municipal budgets. Whether provided by public or private means, assessments by officials and complaints from citizens suggest that this spending fell short of what was needed to maintain an ideal hygienic environment. The importance of public health to municipal administrators became evident in times of crisis. Outbreaks of smallpox and yellow fever in the 1890s and 1900s elicited immediate responses in the affected municipalities and their neighbors. In the infected communities, spending on medical personnel, inspectors, medicines, medical transport, and hospital facilities soared in order to contain the disease. Spending on hygiene and sanitation likewise dwarfed normal annual outlays as municipal servants rushed to eradicate sources of stagnant and polluted water. In outbreak years, public health spending consumed one-quarter or more of municipal funds. The association between disease and water generated support for costly investments in water and sewer networks. These investments pushed the proportion of public health spending upward to almost 50% of municipal expenditures in the installation years. The irregular pattern between modest maintenance and crisis response spending in the public health accounts was driven by the inadequacy of municipal revenues to pay for public goods. This was true in the empire, when a series of restraints hampered local administrators from prioritizing spending to respond to an unanticipated need. It remained true in the republic. Because crisis and need could not await a more efficient fiscal apparatus, municipal authorities sought the means to pay for urgent projects like disease containment. The first course of action was to manage their available pool of resources. They suspended public works projects to divert money to public health goods; they suspended payments to

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public employees; they sought to improve tax collection; and they implemented cost-saving and revenue-generating programs. The second course of action was to borrow money. Loans from the state government and loans from the investing public provided the major funds needed to cover deficit spending and major capital projects like the water and sewer networks. There is some limited evidence that these expenditures were extended throughout the municipal settlements without discrimination based on the consumers’ social class. Financial constraints limited spending on all aspects of São Paulo’s municipal administration across the 1890s, when the coffee boom expanded urban settlements but recession dampened municipal revenues. In prioritizing municipal spending on public goods, officials budgeted resources to pay for expansion of infrastructure and services to new settlements, and acted quickly in the face of crisis to protect public health. Only after the turn of the century, thanks to stronger infrastructure and the application of science to contagion, did the provision of public health goods and services become financially predictable.

chapter seven

Order and Progress Investing in Education, Beautification, and Leisure The education of the people is the broad base on which democratic institutions are steadied and take root.1 — Franca, intendant’s report, 1896

I

n 1902, the state-run school in Ribeirão Preto was facing serious constraints in its ability to deliver quality education. The school building’s size limited the education offered to grades one through four, and the high cost of living in Ribeirão made it difficult to attract quality teachers. The mayor, declaring that public education was second in importance only to municipal financial well-being and public hygiene, reported that the municipality had to take several measures to improve the schools. First, its council elected to pay rent on a nearby building to house a fifthgrade class in order to extend schooling. Second, it financed salary subventions to ease the cost-of-living problem, the product of rapid population growth, rising land values, and constraints on existing housing supplies, in order to recruit and retain skilled teachers.2 This commitment to education was expanded in following years when Ribeirão Preto’s municipal council drafted a law to extend primary municipal education to suburban and rural areas. The intention behind this law was to serve all neighborhoods that had at least sixty students, boys and girls, between the ages of seven and fourteen.3 The council offered to provide the building, furniture, and materials for the school, and housing and salary for teachers. Ribeirão Preto embraced the ideal of the fiscal state, the notion that a state is responsible for investing in its citizens’ education to enhance wellbeing while also creating human capital. The newest of the seven munici-

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palities we have examined in this book, it established the education of its young as a priority in its first code of municipal ordinances. The 1883 posturas assured, “The municipal council will provide free paper, pen and ink to all students recognized as poor in the municipality and will strive by all means in its reach to propagate and spread primary education, counseling and persuading heads of family to matriculate their children in the municipality’s public classes.”4 Even more remarkable, Ribeirão Preto made this commitment at a time when it was building its basic urban footprint, constructing its physical infrastructure, and attending to its public health needs— and despite the Brazilian republic’s assigning the state government the responsibility of providing education. This sort of social concern for using public services to invest in human capital and promote citizenship was an important aspect of the state’s changing role in the nineteenth century, as discussed in chapter 1. The rise of the fiscal state was predicated on the new idea that the government played— or should play— an active role in promoting social and economic welfare by investing in large-scale projects with positive externalities for economy and society. As these investments in social overhead capital bore fruit, governments considered new roles to play, new services to provide. We see this expansion as Brazilian municipalities passed from the financial and administrative constraints of the empire to the relative financial independence of the republic, and from the long history of private beneficence to the expectation of public responsibility for social welfare. In response to public demands for new services, the civilizing mission in vogue among reformers at the time, and the adoption of new technologies, Brazilian administrators at the turn of the twentieth century settled into their municipal mandate and adopted an affirmative stance toward the provision of public goods. By the end of the empire, roads and bridges had been built that promoted the regional circulation of goods and services. Paved streets, sidewalks, and animal control had eased the same for local trade. Clean water, closed sewers, and somewhat regular trash removal had promoted and improved public health. Publicly licensed markets and slaughterhouses protected the food supply. These public goods never declined in their predominant consumption of municipal revenues. But we now see an emerging preoccupation with orderly living and progressive practices. With the advent of the republic and its fiscal federalism that gave their communities recourse to borrowing and local control over spending decisions, and as the state of São Paulo enjoyed the economic boom of the export economy,

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municipal leaders began to focus on the social and cultural interactions of their citizens. This chapter examines this shift from the government reacting to urgent needs to a government leading through proactive policies. It focuses on how municipalities in the late empire and early republic embraced the modernizing ideas of order and progress by promoting education and bringing publicly funded beauty and leisure to their communities. We will not find a great deal of spending on these goods in the larger scheme of public finance, but they became an integral part of the built landscape of the Brazilian municipality as administrators broadened their view of what they should or could provide to their citizens.

Enhancing Education in the Empire The Brazilian constitution of 1824 had embraced free and universal primary education, and the Additional Act of 1834 passed this responsibility to the provinces, so municipalities did not have a direct role in education before 1889. São Paulo’s public instruction code of 1854 mandated that every parish in every settlement, village, and town provide schools for boys and girls, and that education be provided at the primary, middle, and secondary levels.5 These schools were ideally public schools administered by the Director General of Instruction, who oversaw curriculum and textbooks, but private schools were granted a subsidy if no public school was available. The intent was to supply broad access to education. On the demand side, the law made primary education obligatory for all children from seven to fifteen years of age living within five miles of a school. Instructors were dispatched to find chronically absent students and allocate them into two groups: those who had the means to pay the school fees but did not attend, and those who were poor and could not pay. Private schools receiving government subsidies were required to accept these poor students. Whether the school was a public or a private institution was determined by whether the teacher was a public teacher employed by the state or a private teacher subsidized by the state. Private schools that received a public subsidy were required to admit poor students and adult learners. The only groups explicitly excluded from this comprehensive program were slaves and those afflicted with a contagious disease.6 On paper, then, the province expressed a serious commitment to public education, which it deemed essential to “the progress of the civilization of its people, and its future destiny.”7 It was the provincial govern-

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ment’s responsibility to supply a school building or to provide funds for the rental of a private house to serve as a school. The province also provided furniture, supplies, and teachers’ salaries. The implementation of this mandate required money, and all reports suggest that money fell short. Many scholars have noted that education was a priority only on paper during the empire, with no provision for revenue to pay for it.8 An 1870 treatise on the state of provincial education in Brazil was an exercise in pessimism and despair over school quality and funding.9 Under the unflinchingly direct subtitle An Effective Sys­ tem of Instruction Consumes Much Money, a leading proponent of fiscal and political federalism, Aureliano Tavares Bastos, proposed a new tax to increase the quality of public education, which he felt was in a deplorable state despite the constitutions and codes that professed its value.10 Through public education, Bastos sought to “combat the ignorance and rough character of the people,” which, over time, would meet the needs of a political regime based on almost universal suffrage.11 He argued that education should be funded through two taxes: a modest municipal tax in the form of a direct contribution paid by every inhabitant or family, and a provincial tax collected as an additional rate on an existing tax such as the décima urbana real estate tax. His goal was to get people used to paying taxes for education, something he had observed in the United States and Europe. The Province of São Paulo exemplified the problems identified by Bastos. The trail of official correspondence between municipal councils and the provincial body shows that the councils regularly pressed provincial governments to fulfill their obligation to provide buildings, furniture, and supplies for the schools. This was a highly bureaucratic and time-consuming process in which memos, reports, requests, and addenda passed back and forth between municipality and province for months, often with little result. In the newly elevated municipality of Rio Claro, a primary school teacher who urgently needed a proper schoolhouse and supplies to teach her pupils asked the municipal council to make an appeal to the provincial government. With this request, the bureaucratic wheels commenced spinning. The council prepared and sent the appeal to the provincial legislature, which replied by asking for a budget, which was in turn prepared by the council and returned to the province. The province agreed to budget some money for supplies, but refused to pay the monthly rent for a school building, leading the council to appoint a commission to study the possibility of purchasing a building. All told, the pro-

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cess took almost fourteen months.12 The eventual solution, that the municipality buy a building to serve as the school, was the same solution that municipalities arrived at when they needed to establish a meeting hall and a jail in their early years. The municipal imperative to fund education was driven by the state’s changing demographics. Immigrants, on whom the regional economy depended as the slave population dwindled, sought educational opportunities. The municipalities’ ability to attract these workers rested in some measure on the education each municipality could provide them. In the late empire, municipalities subsidized education when their finances allowed and when provincial authorities were unable or unwilling to provide the funds for the provincial goods.13 But during the empire, municipal spending on education was virtually nil— although the fact that municipalities debated its importance and included spending for schooling in their budget tells us it was part of their expanding notion of the state’s possible role in social and economic development.

Enhancing Education in the Republic Education in the republic continued to be the responsibility of the province-turned-state, and state investment in schooling continued to lag behind demand, so the advent of the republic did not improve funding for education at the level of government where responsibility rested. However, the state was willing to allow municipalities to take on the provision of this good. São Paulo’s State Law 16 of 1891 gave municipalities the right to “adopt resolutions on primary and professional instruction, creating schools, museums, and libraries.”14 Municipalities could also contract and pay teachers and provide assistance to private schools. Those that decided to organize a comprehensive system of primary education were free to dispense with the state schools altogether; they would then receive a subvention equal to the amount the state would have spent on its schools. Those schools, whether state or municipal, were governed by Law 88 of 1892, which reaffirmed the state’s institutional responsibility for education.15 This law was ambitious in its goals for São Paulo’s school system. It promised free and compulsory primary, middle, and secondary education provided by the state government, including night school for the working class, and offered financial subsidies to municipalities that provided professional or industrial education.

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Municipalities were acutely aware of the problems with state schools. In 1894, Campinas administrators noted a great need for improvement in education through tracking deficiencies and failures. The intendant’s office reported to the municipal council that education “is poorly distributed in spite of the large regulatory apparatus and legislation.”16 In 1899, an Araraquara news item pointed to the failures of public (stateprovided) education to serve the population. It criticized “islands of excellence” in the capital city that served the children of the powerful, while the majority of the school-aged population lacked access to “reasonable” quality education.17 Araraquara’s lament was the lead-in to a report that its council was stepping up where the state had let it down; the council was investing in the first municipal schools to address the supply-side problem.18 In 1898, Rio Claro voted to create two municipal schools for boys to supplement the single school supported by the state.19 The city’s population had grown by 50% in a decade, from around 20,000 in 1886 to more than 30,000 in 1897, but state investment in public education had remained unchanged. As we saw in the opening to this chapter, Ribeirão Preto’s intendant declared in 1902 that after finances and public hygiene, public education was the area of municipal administration that required the council’s closest attention. The intendant reported on several measures his administration took to expand access to and improve the quality of education. First, Ribeirão Preto supplied financial support to the state-run school, which it was not required to do, in order to extend schooling to the fifth grade. Second, it provided salary subventions to elementary schools to recruit and retain skilled teachers. The impediment to attracting teachers to the municipality, however, was the high cost of living at the turn of the century, the product of rapid population growth, rising land values, and constraints on existing housing supplies. These factors made land for new construction expensive and raised the cost of food. The subventions supplemented teachers’ salaries to ameliorate these pressures at least somewhat.20 In 1904, Ribeirão Preto acted to extend primary municipal education to suburban and rural areas, where schools would offer reading and writing, grammar and composition, civic education, geography, Brazilian history, mathematics, and physical education.21 It also offered subventions to schools whose pupils were the children of immigrants. Other municipalities followed Ribeirão’s example and expanded the subsidization of their own education system. The Ribeirão subventions, which went to six schools, came with two

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restrictions. The first was that all instruction in schools receiving subventions had to be delivered in Portuguese. Recall that Ribeirão Preto, like all the municipalities in this study, received a large influx of Italian workers in the 1890s to supplement the plantation labor force. The administration felt that this language policy “was the best and most suitable means to nationalize primary education in schools attended by children of foreign parents.”22 The second restriction was that every school receiving the monthly subvention must provide free instruction to fifteen students, who would receive schoolbooks at no cost from the municipal council. Local leaders explicitly identified these investments in education as a choice municipalities made to reap the benefits of having a well-educated populace. They expressed the importance of education as a means to attract immigrants, gain a higher-quality workforce, and uplift the poor. 23 Ribeirão Preto viewed schools as the crucibles to form new citizens, because instruction in all schools that received subsidies— many of them formed by Italians to provide education to their children in the absence of state schools— had to be delivered in Portuguese, and the teachers had to be Brazilian citizens, born or naturalized.24 Schools readily agreed to these conditions in order to qualify for the subventions. In addition, the subventions were explicitly intended to improve educational access for the poor: the municipal council provided schoolbooks at no cost to poor students studying in these schools. Finally, Ribeirão Preto wanted an educated workforce and made sure that schooling was available for working adults who lacked a formal education. Of the six schools that received these subventions, two were night schools and one was expressly for workers.25 This notion that schools played a fundamental role in forging the citizenry was reiterated in Ribeirão Preto’s 1920 mayoral report, which notes that the purpose of education is “to give all children rudimentary instruction that enables them to later seek out a greater intellectual development and to awaken the love of our nation in the children of foreigners.”26 The mayor expressed great frustration that immigrant parents held on to a stubborn, persistent quest to remain separate, to maintain their Italian identity rather than adopt a Brazilian one. In response to the problem that two-thirds of the population lived on the coffee farms where schools were entirely lacking, the mayor took the schools to the people, investing in rural schools that served the immigrants and working class. In some cases, local authorities’ enthusiasm to improve education was foiled by a lack of corresponding enthusiasm from local children to at-

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tend school. In 1905, six years after Araraquara increased its investment in public education sixfold to more than 10% of all expenditures, a local newspaper lamented the lack of attendance in many of the neighborhood schools, which led councilors to close the underperforming schools and shift their investment to regions of the municipality with greater demand for schooling.27 A new municipal school was announced just months after the underperforming schools were shuttered in mid-1905. Construction on another school began in 1907. A mixed-gender school opened in 1908. More schools opened throughout the 1910s, and the council continued to provide modest funding to the municipal schools every year.28 This example of fiscal federalism— the idea that local government bodies are best equipped to make decisions about the appropriate levels of investment in public services— was embraced by the State of São Paulo after 1907, the year it permitted municipalization of state schools. 29 A legislative reform that year gave municipal councils the authority to request that state schools be converted to municipal schools, and allowed municipalities to found new schools offering primary or professional education. It continued to ask municipalities to give financial aid to private schools, something they had been encouraged to do in the municipal code of 1891, and to appoint education committees or delegates to visit and report on all schools. The state still had primary responsibility for curriculum and school inspections, but municipalities had the ability to engage directly in public education. It is clear from municipal mayoral reports after 1907 that many municipalities declined to convert their state schools to municipal schools, for these reports show the coexistence of municipal, state, and private schools. Annual statistical yearbooks for the state of São Paulo also reported state schools coexisting side by side with the municipal and private institutions. Now as before, municipalities still provided schools where the state did not, increasingly in newer neighborhoods and rural settings. Educational investments, which had become a regular feature across most of the municipalities by the 1890s, increased by factors of 2 or more after the turn of the century, but the option to municipalize state schools did not affect average spending. If we look at how spending changed over time using spending levels in 1900 as our anchor, we find that per capita investments were already three to four times higher after the turn of the century in Amparo, Araraquara, and Ribeirão Preto, and in São Carlos in most years up to 1910. Spending in Campinas was between 1.2 and 2.6 times higher than its spending from the year 1900 even before the possi-

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bility to municipalize primary schools, while spending in Franca was regularly 6 to 8 times higher than its investments at the turn of the century. Only Rio Claro’s investment in public education lagged behind its 1900 spending, which was the high point in real per capita terms for every year but one in the republic. Annual real per capita spending on education in the 1910s continued at or above its 1900 level for most of the seven municipalities in our study. If we use 1906 as our anchor, however, measuring gains in spending after the 1907 reform law, we see that spending on municipal schools was more or less the same as it had been before 1906. Only São Carlos, which with Franca spent the least on education in real per capita terms, spent 1.8 to 2.4 times more per capita after 1906 than before it. Even in these cases, though, spending was higher than the average for other municipalities in São Paulo. Thus, local control over education allowed by the 1907 reform was already in evidence. Usually, the initiative to expand public education originated with the municipal administration. When Law 16 of 1891 allowed municipal governments to supplement state schools, Franca took immediate steps to expand primary education, calling it the “broad base on which democratic institutions are established and take root,” as we saw in the epigraph that opened this chapter.30 Franca spent relatively less on education than did other municipalities, but the importance of the municipal schools to its population was clear. Franca built schools in the new settlements outside its urban center and increased the number of municipal schools from four in 1896 to eighteen in 1914. At the time, the state maintained just three schools.31 Campinas, a much larger municipality with three times the population of Franca, supported a similar number of schools in the years leading up to 1914. Yet Franca enrolled more students in public school in 1902 than Campinas did in 1912.32 Araraquara opened and closed neighborhood schools as the population warranted and quickly overtook state schools in the total number of pupils served. In 1911, more students were enrolled in its nine municipal schools (315) than in its seven state schools (239), each enrolling 35 students on average.33 When the 1906 law and 1907 decree permitted municipalities to extend educational facilities beyond the primary grades, Araraquara’s municipal council organized Araraquara College, a “magnificent establishment of secondary instruction created here with the assistance of the mayor’s office.”34 Yet despite expanded municipal investment in schools, educational facilities continued to lag behind demand. Araraquara’s population had grown from fewer than 30,000 inhabitants

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in 1900 to almost 50,000 by 1920. The 1914 mayor’s report complained that “there are neighborhoods where the need for schools is patent given the density of their population.”35 The mayor reported in 1917 that more than 1,000 school-age children had no access to education because of the shortage of schools and teachers.36 Ribeirão Preto’s council complained that the state schools were concentrated in the municipality’s urban areas, doing nothing for the rural, immigrant workers. The mayor reported that Ribeirão had worked to remedy this “lapse” during the 1910s by creating rural schools and providing subventions to all schools that opened on the coffee farms.37 Municipal planners scheduled school vacation periods to coincide with the close of the agricultural year adopted by planters, when workers moved from one farm to another, so that their children’s education would not be interrupted. The school day was adapted to the necessities of agricultural work, with class hours restricted during the harvest. The number of class periods in both day and night classes was doubled to facilitate the average attendance required by law. Finally, the council voted to employ public funds in the service of public instruction every year. Sometimes the call for new schools came directly from the citizens. In 1908, representatives of Rio Claro’s Cachoerinha neighborhood requested that a municipal school be built in their neighborhood.38 A request for a neighborhood school in Rio Claro’s Serra d’Água neighborhood was approved by the municipal council’s Committee on Instruction in 1918.39 Residents of Franca’s rural Fundão farm wanted a school to educate the “large number of students living in this locale,” so they wrote to the municipal council in early 1922 to propose one. They agreed among themselves that “in view of the scholastic discipline needed by the children who have not yet received it,” they would construct a building if the municipality would finance the school.40 Franca’s Ribeirão Corrente district also wanted a new school. In that same year, it proposed turning the existing coeducational school into an all-boys school and opening a new school for girls. As in the case of Fundão, it sought growth in the schoolage population.41 Another citizen’s petition came from an existing school and asked the municipality for a subvention to help its poor students, who could not pay the monthly fee of 2.5 milréis.42 The state education codes gave municipal councils a great deal of responsibility for inspecting and reporting on the schools in their district, enumerating these responsibilities in law, but it was up to the municipality to administer these responsibilities. In 1912, Campinas created the admin-

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istrative position of Municipal Inspector of Public Instruction. Like other municipalities, its school system was a hodgepodge of public and private, state and municipal schools. The inspector’s job was to make sure that state schools were fulfilling their obligations to provide primary public education, and that private schools were offering instruction in Portuguese and the geography and history of Brazil. The inspector’s duties toward the municipal schools were more extensive: oversee the selection of locations for new schools and their construction, promote hygiene in the schoolhouses, make sure teachers did not relocate any schools, oversee the pay of municipal teachers and school employees, and work with teachers to organize the schools and propose the most modern pedagogical processes.43 Despite all the legislative hoopla surrounding responsibilities for educating the sons and daughters of São Paulo, whether native born or immigrant, the seven municipalities’ spending on public education remained modest. In all municipalities, the spending ranged from 1.4 to 2.3% of total spending with the exceptions of Amparo and Rio Claro, who spent proportionally more (table 7.1). In real per capita terms, investment in education followed an inverted U curve through the republican era, with the greatest commitment to public education spending occurring during the 1900s and 1910s. The highest investment throughout the period came from Amparo and Campinas (table 7.2). Even for these two, however, average spending levels in the 1920s fell below the per capita investments in the 1890s, when municipalities were first trying to figure out where and how to supplement the state schools. For others, education investments per capita fell below their 1890s levels by the end of the republic. Still, the 1891 constitution made municipal-funded schools optional, so the fact table 7.1 Public education spending as percentage of total municipal spending, 1894– 1928

Amparo Araraquara Campinas Franca Ribeirão Preto Rio Claro São Carlos São Paulo state

High

Year

Low

Year

Average

Total (N = 34)

9.8 10.1 5.4 7.2 7.2 8.9 4.3 3.6

1907 1904 1914 1911 1905 1910 1914 1903

1.8 0.5 0.5 0.9 0.4 0.3 0.1 0.3

1904 1898 1911 1899 1928 1899 1927 1894

4.6 2.3 2.0 2.1 2.2 3.6 1.4 1.4

28 21 28 24 28 25 27 34

Source: Elaborated by the author from published financial statements. São Paulo, Anuários estatísticos, balanços de receitas e despezas, 1894– 1928.

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table 7.2 Public education spending per capita, 1894– 1928 (real milréis) 1890s

1900s

1910s

1920s

Amparo Araraquara Campinas Franca Ribeirão Preto Rio Claro São Carlos São Paulo state

0.215 0.047 0.198 0.145 0.141 0.021 0.000

0.425 0.447 0.558 0.353 0.292 0.234 0.210

0.540 0.240 0.473 0.289 0.375 0.332 0.309

0.189 0.195 0.072 0.052 0.073 0.007

Highest/ lowest Highest/middle Second lowest/ lowest

10.0× 1.5× 2.2×

2.7× 1.6× 1.1×

2.3× 1.6× 1.2×

28.7× 2.7× 7.6×

Source: Elaborated by the author from Anuários estatísticos, balanços de receita e despeza, 1894– 1928; Camargo, Crescimento, vols. 2 and 3, tables 14, 15, and 16. Deflator is Catão, “A New Wholesale Price Index,” and Haddad, “Growth,” 1913 = 100.

that municipal schools existed points to a local decision to invest in this public good.

The Beautification of Public Spaces Improvements of the mind may have enhanced the well-being of municipal citizens during the late empire and republic, but the beautification of public spaces elevated their souls. Before the 1890s, beautification projects were not prominent in the hinterland municipalities, which were preoccupied with implementing basic infrastructure, routine maintenance, and containment of public health crises. Once basic urbanization was established, however, and the provision of public services had shifted from installation to expansion and maintenance, municipal administrators increasingly embraced esoterica. In the final years of the empire, an expansion in public works budgets allowed for new spending on beautification and leisure (no doubt fueled by the desires for such amenities by increasingly affluent elites, who were enjoying record coffee sales to the exterior). The rhetoric justifying these expenditures sometimes cited the need to improve public health, but increasingly reflected great relief that the hard work of urbanization was finished and the opportunity to indulge in pleasure had finally arrived.44 Public gardens were the first works projects whose purpose was to bring beauty to urban space. Rio Claro included money for a horto or

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public garden in its budget in the final year of the empire. In the 1890s, Ribeirão Preto invested in a public garden, as well as trees for planting along the streets. The intendant reported to his council in January 1897 that he had hired an arborist to care for eucalyptus trees sent by the state government, and that he had secured seeds of the best type of trees to plant in the streets and parks.45 In 1905, a contract signed with the engineer Uchoa to pave the city center included the provision that trees be planted “at a distance of 10 meters from one to the next.”46 To be sure, Ribeirão Preto had made small and pragmatic investments in garden and tree planting projects during the 1890s— a botanic garden was installed for the express purpose of controlling water runoff— but it was in 1901 that the municipality began to dedicate funds to public green spaces. It spent a significant sum that year— almost 4% of its total expenditures— to construct a public garden, because the municipality “did not have a single hygienic place for public recreation.”47 This oasis would be “a place where citizens can relax in a more pure environment, a reserve of oxygenated air.” A report indicated that the garden was built in response to public demand, offering us another indication that public requests and complaints had some influence on administrative priorities. The report described the resulting project as “small but enchanting.” From that time forward, the city saw beautification as a way to maintain its status as “the capital of the West.”48 Campinas had been the first of the municipalities to give aesthetics as the rationale behind a public works project. The oldest and most urbanized of the municipalities, its stated objectives justifying an 1894 streetpaving project in “locales distant from the [urban] Center” were to “facilitate transit, prevent illness linked to unhealthy soil, and beautification.”49 As in Ribeirão Preto, Campinas’s newer settlements initially sprang up spontaneously and with little planning. As population became denser, the municipal authorities began to budget for basic urban infrastructure such as street grading and pavement.50 Although the allusion to beautification in the 1894 report probably meant standardization in the ordained style of the municipality, the Ribeirão Preto case described in chapter 2 suggests that municipal administrators had limited ability to impose municipal ideals on property owners. Then in 1895, the Campinas administration reported that it had modestly improved public spaces by planting flower beds in one park, but admitted that citizens’ requests for trees and park benches there and at other parks went unfulfilled. Here again, we see public appeals potentially influencing spending priorities, even if un-

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successful. It is reasonable to presume that the reason some appeals went unfulfilled was due to financial constraints. At the end of 1894, Campinas had accumulated loans almost twice the value of its annual revenue.51 After the turn of the century, the meaning of beauty in Campinas reports was less ambiguous, and spending on esoteric public works projects gained ground. Whereas prior reports mentioned little spending on parks and leisure, the mayor now reported “general improvement in all public spaces” during his tenure from 1908 to 1910.52 Workers had been brought in from Rio de Janeiro to remodel the garden of the Visconde de Indaiatuba Plaza and to pave its streets with mosaics. The José Bonifácio Plaza received new tree plantings, new walkways, and mosaic paving on the surrounding streets. It also received updated lighting, from gas to electric. Three other parks benefited from reforms that included new pathways and new trees. A few years later, the municipal council acquired a park developed by a private citizen, Sr. Francisco Bueno de Miranda, which became the municipally owned and maintained Jequitibás Woods Park. In addition, the council planted more than five hundred plants from the municipal nursery around the city.53 Even the public cemetery received an aesthetic touch. Unlike past reports, these improvements were not linked to health or sanitation. The report on parks was about pure beauty.54 Ribeirão Preto suffered severe financial strain from a 1903 epidemic, but soon recovered and celebrated by enhancing its public spaces. In January 1905, its mayor wrote in his annual message to the municipal council, “This new city, born as if by enchantment from the abundant forests of the state of São Paulo and by the efforts of intrepid planters, still does not offer its inhabitants the desirable conditions of cleanliness and beautification to which they have the right, as a great center of commerce and agriculture.”55 The municipality already had good networks for lighting, water, and sewer, so the focus turned to cleanliness and beautification. The mayor’s office then expropriated lands from several parties to construct public parks in the city center. Araraquara announced its new jewel, a public garden, in a newspaper article published at the beginning of January, 1899.56 The garden was built by private initiative, echoing the regular contributions of local notables in Ribeirão Preto and elsewhere at the turn of the century. In short order, however, municipalities began to supply these public services with public finance. Accordingly, Araraquara’s mayoral report delivered to the municipal council in March 1907 spoke of the garden program in development.

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The mayor’s office had ordered stands of outmoded eucalyptus trees to be destroyed in public plazas in order to replace them with “plants of a small form and that are in keeping with the modern form of tree planting.”57 Under a 1908 news item titled “Beautification,” the municipal government promoted both urbanization and beauty by offering awards to the best new constructions in the city.58 The annual report for 1916 confirmed that this initiative had been robust, and that the “enthusiastic period of beautification” that had begun in 1912 had resulted in the construction of 145 new private buildings and the remodeling of public ones, including their façades, to the tune of “the voluminous sum” of two million milréis, more than one-quarter of which came from the public budget.59 The same report mentioned that the public garden inaugurated in 1899 had undergone a complete renovation. These improvements came in a year when revenue unexpectedly surpassed expectations by one-third of the budgeted value, a windfall that permitted repayment on the debts of the previous fiscal year while allowing spending on items absent from the original budget due to a lack of anticipated funds. This increased attention to appearance was the product of a recovering economy. The worst of a deep nationwide recession and deflation that had begun in the 1890s was ending by 1902.60 The state program to improve coffee prices by buying excess stocks and withholding them from the market, begun in 1906, was bearing fruit in the form of economic expansion.61 Campinas administrators in 1911 credited this prosperity with generating population growth, sparking an increase in housing construction and a gain in property values, and creating a general economic well-being. More to the point, it improved the demand for Campinas bonds in the market, allowing the municipality to raise a substantial loan at favorable terms that year. The proceeds helped pay for the beautification projects described above.62 Of course, not all spending was esoteric that year or any year. Public works projects related to health and hygiene continued, particularly those addressing flooding in the rainy season, and none of the reports from the newer districts of Campinas reported esoteric investments. Those reports were closer in content to the reports of the 1890s, consumed with details about basic street alignment, gutter and curb construction, and bridge construction and repair. But the improving health of the economy created the opportunity for nonessential spending in some parts of Campinas. In 1913– 14, the gardens project was extensive. The mayor reported that the municipality was employing six full-time gardeners, eleven assistant gardeners, and four garden sweepers among its employ-

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ees.63 In the mayor’s report for 1922, improvements to Campinas’s Jequitibás Woods were noted, including a protected retreat for women and improvements to its roads and surrounding wall. The municipality acquired “birds in great numbers” for the woods, and schoolchildren planted three thousand trees there in honor of the festival of trees.64 In 1926, the public works department was lauded for caring for the municipal cemetery “with tenderness” (carinho), paving its streets with stone mosaics.65 Now that beauty was being embraced as a public good, some spending on urban beautification endured even when financial conditions were less robust. In the early 1920s, when inflation challenged Ribeirão Preto’s ability to pay its bills, it still dedicated some very modest resources to planting trees along its streets. In 1924, it completed work on the garden of the Plaza 13 de Maio and began a new project for the Plaza Dr. Aureliano de Gusmão, both under the direction of the new Office of Woods and Gardens. Despite its financial troubles, the city continued to invest in tree planting along its streets and in its plazas. It also funded garden development, mosaic tile paths, and other types of improvements to public spaces. Even though municipalities introduced public gardens to improve their cities and by extension their citizenry, these public goods were not always treated with the respect and care their administrators hoped for. Franca’s mayor reported with great dismay in 1917 that the municipality had to contend with an influx of homeless people and with vagrant children causing great damage to places of public leisure, despite the presence of guards employed to ward off such disorder. These vagabonds, as the mayor called them, ruined the benches that adorned the gardens and cost the municipality to repair.66 Campinas, too, struggled to maintain and expand its gardens while coping with destructive use by the public. It reported that its main square had suffered from heavy traffic in 1927, making it impossible to maintain the landscape in good order. The municipal gardeners worked to tend to the plants, and then, “at the first gathering of population, whether for a religious festival or lay celebration, everything was destroyed, wiping out all [their] efforts.”67 To improve the park’s appearance and durability, the mayor widened the streets surrounding the space and installed mosaic stepping-stones throughout the flower beds. Planting additional trees, pruning trees, fertilizing gardens, and other services were recorded in following years as the municipality maintained its green space.68 These gardens became more than just green spaces in urban communities; they became places of entertainment and leisure for the municipal

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residents. Franca’s municipal government, for example, paid for Sunday afternoon plays and concerts in its renovated public garden to provide recreation for its populace. In 1902, the intendant reported negotiating with the municipal council to hire a band to play there on Sundays and holidays, the funding for which was eventually approved.69 The introduction of the music program to Franca’s public space was a point of great civic pride. Ribeirão Preto, which had built a kiosk in 1924 to offer shaded leisure space in its municipal woods, installed a band shell for public performances. It also added a drinking fountain, tables, and benches for public use.70 Campinas planned a pavilion for “dances and diversions” in its Jequitibás Woods in the 1920s.71 In addition to music and dance in the parks, we see a few mentions of public investment in historical memorialization in the public gardens and squares.72 In Franca’s mayoral report for 1922, buried in a long list of road repairs, gutter installations, and acquisition of land to corral loose animals rounded up on its streets was mention of the city’s installation of a granite landmark in the Praça do Rio Branco to commemorate one hundred years of independence.73 Campinas’s mayoral report for 1924 noted that the city was “beautified” with monuments honoring two recently deceased notable Brazilians: Rui Barbosa, one of the chief architects of the republic, and Dom João Baptista Corrêa Nery, who had served as archbishop of Campinas. The bust of Rui Barbosa, sculpted in bronze and mounted on a pedestal of pink granite, was placed in a corner of the public garden at the Praça Carlos Gomes. The statue of the archbishop was similarly placed in a public square. The mayor noted that his office had paid the sculptors with funds approved by the municipal council for these “two most beautiful monuments.”74

Conclusions The declaration of the republic and the turn of the century came at a time when the seven municipalities in our study were established enough and, thanks to the effects of coffee boom on the local economy, prosperous enough to begin turning their attention to the social and cultural wellbeing of their residents. The urban landscapes had been built, basic institutions like churches and jails secured, and public health needs addressed. Now municipal services could embrace the progressive possibilities of the fiscal state by investing in education, beautification, and leisure. These in-

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vestments were fairly modest in size and scope, and some were consumed by only a fraction of the residents, but for the most part they were cast broadly to reach the entire population. Education was offered specifically to the children of immigrants to turn them into citizens, but it was also offered to the adult learner and made accessible to the poor through subsidies. Municipally provided leisure was open to the public, requiring no fee to stroll the parks and gardens or attend the free concerts. These green spaces became sites of memorialization and of citizenship, a fitting conclusion to a century of the state’s increasingly inserting itself into everyday life through municipal finance.

chapter eight

Conclusion The Local Economy and the Vibrant Municipality

T

his book opened with the argument that public finance is crucial to social and economic development, because public revenue (ideally) pays for services that support and enhance the quality of life and standards of living beyond the capacity of family income. Beginning in the nineteenth century, governments consolidated central authority and secured the ability to assess and collect taxes capable of realizing this type of investment in social overhead capital. Increasingly, states viewed investments that promote societal development and economic growth as their responsibility. They created policies on generation and distribution of revenue among the various levels of government, as well as the responsibilities that each level of government should fulfill. In this way, they created the structure to determine how their society should invest in the public good. In Western nations, the rise of the liberal fiscal state and its impact on human development tended to take a virtuous path, as states invested in physical infrastructure, safety, health, and education to enhance economic growth and promote human development. How did Brazil fare? It gave the municipality the extensive responsibilities to promote the local economy, invest in physical infrastructure, secure the local food supply, protect public health, and promote public safety. Yet the municipality controlled but a small proportion of public revenue. Was the local Brazilian state able to fulfill its mandate? The evidence presented in this book says no. The discrepancy between policies on revenue generation and distribution and those on the responsibility for delivering services set the context for inequality that lasted through the empire and the republic. The fiscal structure of the Brazilian state produced a

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closed loop that reinforced both prosperity and poverty. Local revenue depended on local economic activity. Local investments in social and economic well-being depended on local revenue. The ability to supplement local revenue with loans from the capital markets was predicated on the value of local revenue. There was no mechanism to disrupt this closed loop short of an exogenous shock, so inequalities between municipalities were easily reproduced and reinforced over time. The facts are clear: the fiscal structures of the empire and the republic created conditions that made it difficult to invest in the public goods emblematic of the liberal state. Fiscal federalism, in theory, is an efficient structure. It places decisions regarding investment goods at the local level. But its ability to address those needs is predicated on the sufficiency of funds. I have shown throughout this book that funds were insufficient to meet the needs of local communities, largely because they relied on regressive taxes, fees, licenses, and fines on local circulation of goods, services, and people. For most of the nineteenth century, the modesty of the domestic economy kept revenue per capita low and compelled these communities to appeal repeatedly to the provincial authorities to supplement their coffers. The reforms of the republican era that doubled down on fiscal federalism did little to remedy the financial realities of the municipality. The republicans took the prized revenues generated in the export sector from the central government and reallocated them to the states, but municipalities were still embargoed from taxing these same sources, meaning they continued to depend on their local economy to generate their revenue. The major source of wealth produced by the men and women who worked in our seven case-study municipalities— the coffee exported to satisfy a seemingly insatiable world demand— was not available to the local governments as a meaningful source of revenue. São Paulo was more generous than most of the states in Brazil in that it reallocated some of its revenue sources to its municipalities, mainly the Industries and Professions tax after the declaration of the republic. As a result, São Paulo’s municipalities were better off than their counterparts in much of the country. Moreover, some communities benefited indirectly from the coffee economy through the related economic activity it generated: larger populations, more vibrant urban centers, improved commerce, diversified domestic manufacturing, and increased services by artisans and professionals. Yet even among the municipalities of the Paulista West, the center of one of the greatest commodity booms in Latin American history, the relative vibrancy of their local economies varied greatly. The capital

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markets played an important role in municipal investment by giving local governments access to long-term funding sources to pay for major capital improvements such as piped water and closed sewer systems. All seven municipalities took advantage of this new freedom to borrow against anticipated revenue and increased their per capita investments substantially. But their borrowing capacity was tied to local revenue, so the health of their domestic economy continued to influence their ability to fulfill their mandate. Thus, structural differences between municipalities persisted. What effect did these structural differences have on each community? This chapter draws together the threads developed throughout the book— revenue generation and spending patterns and priorities— to reflect on how they generated inequality across the hundred-year period. For this, we can use the concept of human development. Human development is a measure developed by the United Nations in the late twentieth century in an effort to capture a fuller picture of well-being beyond income per capita. It recognizes that investments in public goods, specifically health and education, exert powerful effects on lifetime earnings and the prospects for upward socioeconomic mobility. The paucity of municipal-level data for the components comprising the human development index— life expectancy at birth, expected years of schooling, mean years of schooling, and income— makes it difficult to directly measure human development for these municipalities. Nonetheless, we can ask what the investment trends were for the types of goods and services that contributed to human development— goods and services that made life healthier and more prosperous, including physical infrastructure, public health initiatives, and education. The liberal state on which Brazil modeled itself sought to invest in human development. The nation’s adoption of this model left much to be desired, as we have seen, but we can still use the relative levels of spending to draw some conclusions about inequality. Broadly speaking, investment in human development was low during the empire and improved during the republic. As municipal governance matured, economies expanded, and revenue sources changed, investment in human development goods also expanded, though unevenly, across the municipalities. The uneven character of this expansion was due to the local economies’ varying levels of success in generating revenue for municipal investments, which did not change from one era to the next. The Tiebout hypothesis, introduced in chapter 1, holds that consumers of local public goods will express their preferences by “voting with their

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feet.” That is, they will be drawn to communities that invest in the amount of goods they desire. Families with children, for instance, might seek out communities that invest in public education and parks. Retirees who no longer have children at home might choose to lessen their tax burden by living in communities with lower levels of investment in education. Fiscal federalism, which allocates investment decisions to local authorities, provides the mechanism for communities to tailor public goods spending to the preferences of their residents. The Tiebout model (and its extensions) argues that the level of investment in public services is observed in differences in property values and tax rates— more goods relative to neighboring towns generate higher property values, but incur higher taxes to pay for them; fewer goods generate lower property values, but tend to have lower tax rates— and that individual communities have specific preferences about optimal size that will cause them to expand or reduce investment in public services in order to attract or expel population. A community that underinvests (does not provide enough services) or overinvests (provides too many services, driving up taxes) relative to that set of preferences will lose population. A community that seeks to attract new residents will provide a richer array of services than its competitors to induce movement, and a community that has reached its optimal size relative to its residents’ preferences will stop investing in additional services. Population will move among the communities according to their individual preferences for services and tolerance for taxes.1 We know from the preceding chapters that the municipalities all relied on similar revenue sources and spent their revenue on similar categories in both the empire and the republic, but that the per capita values of revenues and expenditures were not similar at all. It is here that we see how placing the responsibility for investments in human development on municipal governments created disparities in public goods. Three characteristics stand out about per capita revenue (table 8.1). First, there was a wide gulf between the wealthiest and the (relatively) less well-off municipalities.2 Second, the coffee boom of the 1880s produced a substantial increase in real revenue for all the municipalities on the order of two to three times the revenue of the 1870s, driven by greatly enhanced domestic economic activity as populations swelled. Third, the relative strength of these municipalities in terms of their ability to extract revenue from the local economies shifted over time as the effects of the coffee boom moved through the province. Communities that integrated the earliest into the international sector—

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214 table 8.1 Municipal revenues per capita (nominal and real milréis) In order of founding date

1830s

1850s

1870s

1880s

1890s

1900s

1910s

1920s

Campinas Franca Araraquara Rio Claro Amparo São Carlos Ribeirão Preto São Paulo state

.273 .086 .035

.296 .131 .122 .389

1.966 0.555 0.504 1.132 1.029 0.299

6.391 1.445 1.193 2.192 2.181 1.192 0.630

12.659 6.353 5.567 6.443 6.247 4.157 7.523 4.798

19.513 10.441 8.727 5.974 8.907 10.286 9.245 9.476

27.762 17.311 14.347 6.793 8.800 13.107 14.183 10.060

13.432 6.294

Highest/ lowest Highest/middle Second lowest/ lowest

7.7× 3.2× 2.4×

3.2× 3.0× 1.1×

6.5× 3.5× 1.7×

10.2× 4.4× 1.9×

3.0× 2.0× 1.2×

3.3× 2.0× 1.5×

4.1× 2.0× 1.3×

3.1× 1.9× 1.1×

5.064 6.307 11.025 15.873 8.280

Source: ALESP Municipal collections, 1835– 89; Anuário estatístico de São Paulo, 1894– 1928; Camargo, Cresci­ mento, vols. 2 and 3, tables 4, 5, 6, 14, 15, and 16; Relatório Bookwalter, 9; Catão, “A New Wholesale Price Index”; Haddad, “Growth.” Note: Revenues are nominal for 1830s and 1850s, real for 1870s onward. All revenues are actual except for 1870s and 1880s Campinas, 1880s São Carlos, and 1880s Ribeirão Preto, which are budgets. 1920s include the years 1920 and 1926– 28. Comparisons of highest/lowest etc. do not include São Paulo state.

Campinas, Amparo, and Rio Claro— had the highest per capita revenue in the 1870s. As coffee production extended up toward the Minas Gerais border thanks to improved transportation networks by the 1880s, growing populations and rising incomes spurred growth in domestic enterprises, which swelled local revenue. Campinas had the largest and bestdeveloped urban infrastructure, which positioned it as the second most important city in the state. It remained dominant through both the empire and the republic. Ribeirão Preto and neighboring Franca surged with the coffee boom, but Franca, less strongly tied to the coffee economy than Ribeirão, eventually waned, while Ribeirão Preto was on its way to becoming one of the wealthiest municipalities in the country. Araraquara and São Carlos, neighboring municipalities, shared a similar pattern of domestic economic expansion and yielded similar incomes per capita. The local business environment of two of the older municipalities, Rio Claro and Amparo, had ridden the wave of the coffee boom, but by the twentieth century experienced a pronounced decline in their revenue as coffee moved into new areas of the state where the soils were not yet exhausted. These waves of growth and decline in revenue were the product of changes in local taxes, fees, and licenses (see table 3.8), which affected borrowing capabilities. The two most prosperous municipalities, Campi-

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nas and Ribeirão Preto, could borrow far more than the others. And when revenue from the domestic economy declined for the other municipalities, loans declined along with them. Whether from taxes or loans, these municipalities generated revenue on a per capita basis that varied greatly from case to case, which meant that their capacity to invest in human development also varied from case to case. The new revenue streams that improved revenue generation from empire to republic— like the Industries and Professions tax, the imposto predial, and loans— allowed total real per capita spending to multiply many times over (see fig. 8.1). Municipalities tended to spend on the same broad categories as one another in about the same order of importance— public works received the most, public education the least— but the relative weights and per capita investments varied greatly from one to the other (see tables 4.1 and 5.2). We know that public works captured the greatest amount of spending of any one category in empire and republic, and that spending on public administration fell across the century as a proportion of total spending. Spending on public safety was not reported separately in the republic, as it had been in the empire, but evidence from some municipalities indicates it fell to just a small percentage of spending at most. Health spending depended on disease outbreaks in the empire but grew

figure 8.1 Total real spending per capita (milréis, decade averages) Source: ALESP Império Municipal collections, 1835– 89; São Paulo, Anuários estatísticos, 1894– 1928, balanços de receita e despeza; Camargo, Crescimento, vols. 2 and 3, tables 4, 5, 6, 14, 15, and 16; Relatório Bookwalter, 9. Deflator is Catão, “A New Wholesale Price Index,” and Haddad, “Growth,” 1913 = 100.

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in importance in the republic. Education spending was close to nil in the empire, but even the small amount that was spent was remarkable considering that the state, not the municipality, was responsible for providing this service. All told, municipal spending on public services related to human development, including works, health, and education, accounted for between one-third and one-half of municipal spending in the republic (see table 5.2).3 While the broad patterns of what municipalities spent their money on were roughly the same, the per capita investments in these public goods varied greatly from municipality to municipality and decade to decade. This is not surprising, given the wide disparities in per capita revenue, but it is here that we most clearly see the effect of the fiscal structure on local development. With few exceptions, investments in the three broad categories absorbed between one-third and two-thirds of all spending in every decade, but the value of those investments in terms of population varied greatly (table 8.2). Take the comparison between the neighboring municipalities of Campinas and Amparo in the 1880s. Both invested around 60% of their resources in works, health, and education, but Campinas spent almost three milréis to Amparo’s one milréis on every man, woman, and child. In the 1910s, Amparo and Rio Claro each spent just under 40% of table 8.2 Human development investment per capita (milréis, percentage of total spending) 1850s

1870s

1880s

1890s

1900s

1910s

1920s

1.460 62 .466 39 4.036 61 .682 46 .273 43 1.273 63 .781 65

3.704 67 2.069 34 6.529 59 2.367 38 3.996 58 2.904 46 3.549 67

5.754 61 3.482 39 8.056 42 4.010 39 2.516 27 2.726 46 5.084 31

3.515 38 6.144 44 8.493 31 5.975 42 4.262 39 1.991 39 4.615 32

3.374 54

.053 32 .089 44 .031 23

.645 60 .108 21 1.252 64 .240 42

Amparo Araraquara Campinas Franca Ribeirão Preto Rio Claro São Carlos

.158 43

.668 60 .129 45

7.183 57 2.010 33 6.392 44 2.167 43 4.143 39

Source: Elaborated by the author from manuscript and printed financial statements. ALESP Império Municipal collections, 1835– 89; São Paulo, Anuários estatísticos, 1894– 1928, balanços de receita e despeza; Camargo, Crescimento, vols. 2 and 3, tables 4, 5, 6, 14, 15, and 16; Relatório Bookwalter, 9. Deflator is Catão, “A New Wholesale Price Index,” and Haddad, “Growth,” 1913 = 100. Note: Human development is public works, health, and education. Spending is nominal for 1850s, real after 1870. All spending is actual except for 1870s and 1880s Campinas, 1880s São Carlos, and 1880s Ribeirão Preto, which are budgets. Values in boldface indicate a decline in real value from the prior period.

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figure 8.2 Average per capita spending by category, 1899– 1901 (real milréis) Source: Elaborated by the author from published financial statements. São Paulo, Anuários es­ tatísticos, 1894– 1928, balanços de receita e despeza; Camargo, Crescimento, vols. 2 and 3, tables 14, 15, and 16. Deflator is Catão, “A New Wholesale Price Index,” and Haddad, “Growth,” 1913 = 100.

their funds on these categories, but Amparo’s per capita investments were almost double those of Rio Claro. The reliance on the local economy to generate revenue meant that the amount invested for each individual depended entirely on where they called home. Not only did the milréis value of investments for each Brazilian depend on the municipality in which he or she lived, but decisions on where to invest those milréis depended on the priorities of the local administrators. We have seen those decisions expressed in narrative form in the preceding chapters, but the decision making stands out when looking at them head to head. It was rare to find a window of time when spending levels were reasonably similar across the municipalities, given that some were much wealthier than others, but there was one three-year period when spending levels were close enough to give a glimpse into the differences between municipalities. Figure 8.2 shows the relationship between spending on public health, public works, municipal education, and all other budget categories in the three years from 1889 to 1901. In that period, we see that Campinas spent more than any other municipality on public health, followed by Ribeirão Preto. And while the values were very small,

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Rio Claro outspent everyone on education on a per capita basis, even wealthy Campinas. Franca spent the least of any municipality on health and an amount on education so negligible that it barely registers on the graph. Fully 70% of its spending was on accounts other than human development (administration, debt service, and extraordinary or diverse accounts). Amparo and São Carlos, in contrast, invested close to 80% of their expenditures in the human development categories, although most were dedicated to public works. Of course, this one period cannot stand in as representative of a century of spending decisions. Accounts like public works and public health were often driven by external forces (floods, epidemic outbreaks) that skew the values for any short period of time. But the general point holds: the proportions spent on projects that advanced human capital formation and economic development were different between communities and were predicated on the ability to free up funding from one need and apply it to another. Research on education in São Paulo has shown that these early investments made a big difference in standards of living over the long term.4 The short-term benefits, however, are less clear. We get an indication of whether these investments were prized by Brazilians if we ask the questions Tiebout would have asked: Did property values rise in communities that invested in human development? Did people choose to move to these communities? To measure the effect of investments in public works, public health, and public education on these municipalities, the imposto predial, the tax levied on the rental value of urban buildings, answers the first question. Population growth across the period answers the second. By comparing the differences in real per capita property values from 1900 to 1920, we see that changes in total spending, generally, and changes in human development categories spending, specifically, affected urban real estate values. The two municipalities that increased their investments in human development, Araraquara and Ribeirão Preto, experienced a rise in property values that was more than proportional to the rise in spending. In the two municipalities with the largest declines in total spending and human development spending, Amparo and Franca, property values also experienced the largest decline. These declines were roughly proportional to the decline in spending (table 8.3). The impact of human development spending on property values predicted by the Tiebout model is less clear for the other three municipalities, but close evaluation of their financial records shows that each had characteristics that help explain their apparent ambiguity. In Campinas,

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table 8.3 Changes in property values, total spending, and human development spending, 1900– 1920 (real per capita milréis, percentage change)

Araraquara Ribeirão Preto São Carlos Rio Claro Campinas Franca Amparo

Imposto predial per capita 1900

Imposto predial per capita 1920

Percentage change per capita total spending 1900– 1920

.494 .783 .366 .748 1.396 .759 .638

2.032 1.439 .427 .761 1.219 .409 .285

8 22 (10) (46) 26 (39) (46)

Percentage change per capita spending on works, health, and education 1900– 1920

Percentage change per capita revenues from imposto predial 1900– 1920

82 18 (55) (68) 0.0 (43) (71)

311 84 17 2 (13) (46) (55)

Source: Elaborated by the author from published financial statements. São Paulo, Anuários estatísticos, 1894– 1928, balanços de receita e despeza; Camargo, Crescimento, vols. 2 and 3, tables 14, 15, and 16. Deflator is Catão, “A New Wholesale Price Index,” and Haddad, “Growth,” 1913 = 100.

which increased total spending by 26% but kept human development spending unchanged, property values declined modestly. The municipality had been the leader in both categories on a per capita basis for decades, but had not increased its investments and was spending more each year on debt service and extraordinary and diverse accounts. The threeyear moving average of extraordinary and diverse accounts— accounts that lay beyond the budgeted expenditures and were by definition variable or unpredictable— accounted for between 20 and 40% of all spending after 1900, rarely dropping below that range and on three occasions reaching 65%– 75% of total spending. No other municipality of the seven cases had such a large proportion of its spending tied up in such volatile accounts. Moreover, Campinas was a hoarder. Where the other municipalities spent close to (or sometimes more than) the revenue they brought in, Campinas spent just 57% and 66% of its revenue in 1900 and 1920, respectively. It is possible that this unpredictability, lack of transparency, or perceived underinvestment in public services had a dampening effect on property values. The details of São Carlos’s financial history offer a similar interpretation of its paradoxical improvement in property values. Between 1900 and 1920, São Carlos decreased total spending by 10% and human development investments by 55%, yet its property values rose about 17%. This puzzle is explained by the fact that public works, one of the three

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components of human development, was at its peak as a percentage of total spending in 1900, consuming proportions of total spending that were double its normal investment to create vital infrastructure. The decline from 1900 to 1920 was not a secular decline, then, but the result of an unusually high initial value for the public works component of human development investments. If we look at the other two components of human development spending, health and education, we find that investment in both increased. The combined rate of growth in these two categories was an increase of 82% over spending in 1900. Finally, we have the quandary of Rio Claro. Rio Claro reduced total spending by almost half and human development spending by two-thirds from 1900 to 1920, but its property values were unaffected. Like São Carlos, Rio Claro’s spending on public works was more heavily weighted toward the earlier period than the later. Works investments had been particularly high at the turn of the century, accounting for half of all spending in some years, then falling in the post– World War I years, when it consumed just 20% of spending. Investments in public health and public education, however, were relatively steady across the period. The broad decline in human development investment did not affect Rio Claro’s commitment to the health and education of its population. If we look at the longer period of the republic, using the changes in spending from 1900 to 1928 to see their effect on property values, we see that the expected relationship in the Tiebout model held for São Paulo’s municipalities (table 8.4). Those that invested the most per capita in total spending, or had the smallest declines in total spending, had the greatest rise in the value of urban real estate, while those that reduced spending per capita, especially in the subset of human development categories, had the smallest rise in real estate values. After 1900, the construction of modern infrastructural systems was at its height, and the population grew at its fastest rate. But by 1928, years of inflation had eroded confidence in the economy, relative gains in population had slowed, and municipalities had reduced real spending per capita. The magnitudes of these reductions correspond to the relative change in property values. That is, the communities with greater reductions in spending experienced smaller increases in property values. If investments in infrastructure, health, and education contributed to rising property values, what of population flows? Did Brazilians vote with their feet? Did municipalities with higher investments in public goods draw more people to them than municipalities that invested less? When

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table 8.4 Changes in property values, total spending, and human development spending, 1900– 1920 (real per capita milréis, percentage change)

Ribeirão Preto São Carlos Campinas Rio Claro Franca Amparo

Imposto predial 1900

Imposto predial 1920

Percentage change per capita total spending 1900– 1928

.783 .366 1.396 .748 .759 .638

6.440 2.805 5.512 1.567 1.531 .959

40 17 (19) (53) (45) (47)

Percentage change per capita spending on human development 1900– 1928

Percentage change per capita revenue from imposto predial 1900– 1928

63 (38) (28) (50) (31) (61)

722 666 295 109 102 50

Source: Elaborated by the author from published financial statements. São Paulo, Anuários estatísticos, 1894– 1928, balanços de receita e despeza; Camargo, Crescimento, vols. 2 and 3, tables 14, 15, and 16. Deflator is Catão, “A New Wholesale Price Index,” and Haddad, “Growth,” 1913 = 100.

we consider the effects of public service investment on municipal population trends in São Paulo, there is some support, albeit very modest, for the idea that human development investment and its effect on property values had an impact on population movements— that Brazilians voted with their feet. Table 8.3 orders the municipalities by their change in property values from 1900 to 1920, highest to lowest, to see how this compares to population change to 1920 and beyond. The rate of change in population somewhat comports with the changes in investments in human development and their effects on property values. Araraquara and Ribeirão Preto, the communities with the greatest increase in investment in public works, health, and education, had two of the three highest growth rates from 1920 to 1928, the period immediately following increased investments. Amparo, which had the greatest decline in human development investment and property values from 1900 to 1920, had the biggest rate of population loss in the period following the decrease in investment. Amparo’s declines in investment and property values, and its subsequent decline in population, suggest that it reached its optimal size by the late 1920s relative to its local economic base. This may have been the case for three other municipalities as well. Rio Claro, Campinas, and São Carlos all had lower or flat investments in human development in 1920 than in 1900, a function of the very high rates of investment at the turn of the century, and all three had modest changes in property values from 1900 to 1920 compared with the other municipalities. The rates of popu-

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lation change in these three were similarly modest, on the order of singledigit percentage changes. São Carlos serves as an illustration. It reduced spending overall and in human development, had a modest increase in property values, and had a modest decrease in population. Its decline in human development investment was driven by a drop in its largest component, public works, possibly because its people were adequately served by its stock of works, or perhaps the people had reached their tolerance for taxpaying. Franca is the paradoxical case. It reduced its modest per capita spending on human development from 1900 to 1920, primarily through a decline in works, and experienced the second greatest decline in property values. Yet it had the second highest rate of population growth after 1920. This discrepancy might be explained by the fact that it was the last of the seven municipalities to surge in response to the coffee boom (it was located the farthest from the port city of Santos) and the only one of the seven whose rural economy was still expanding in the 1920s, generating demand for agricultural workers. The two municipalities that had increased human development investment in the 1900– 1920 period, Araraquara and Ribeirão Preto, also experienced among the fastest rates of population growth in the preceding period from 1886 to 1900 (see table 4.7). It is possible that Franca’s relative decline in spending was the result of a suddenly large denominator, and that it was poised to improve its development investments in the subsequent period. Table 4.7 also shows that while its population growth from 1920 to 1928 was among the highest of the seven, Franca had the largest drop in the rate of population growth from the prior period, 1900 to 1920. This slowing, by far the most dramatic of the cases, may be the signal that Tiebout was operating.

Concluding Thoughts Chapter 1 argued that the question of who pays and who benefits is central to our understanding of inequality. To paraphrase Joseph Schumpeter on the power of public finance, the answers to these questions reveal the priorities that shaped the contract between state and citizen. Who paid for investments in the public good in Brazil’s first century? There are two answers to this question. The first answer is all Brazilians who engaged in the formal domestic economy. The foundation of municipal public finance was revenue derived from taxes, licenses, and fees on the transactions

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of daily life. Goods bought and sold in local shops, merchandise transported from here to there, peddlers hawking their wares, vehicles transiting the streets and highways, artisans exercising their craft, professionals rendering their services— all paid a rate on their economic activity which either came out of their pocket as providers or was passed along via prices charged to their consumers. Because rates were paid on hundreds of categories covering every manner of domestic goods, services, and professions, including the essential consumption categories universal to humankind— food, shelter, and clothing— Brazilians were certain to pay on one end of the transaction or the other. These rates formed the basis for half of all revenues available to municipalities to invest in public goods. When we consider that those revenues directly conditioned the borrowing capacity of municipalities, the importance of the local economy becomes even greater. Taxes, licenses, and fees combined with loans produced two-thirds or more of all municipal revenues. The second answer to the question of who paid is the non-elite, for the revenues that formed the municipalities’ financial base were regressive in nature. The wealthy were more likely to engage in the formal economy than were the middling and lower groups, particularly in the nineteenth century, when Brazil was overwhelmingly rural and many Brazilians only occasionally engaged in formal exchanges, but the weight of these rates on elite income was far lower than on the income of the non-elite groups. As Brazil urbanized in the late nineteenth century, it drew proportionally more of its population into the formal economy and increased their participation in the fiscal regime. Its government chose not to entertain taxes on wealth or income as a source of revenue for investment in social overhead capital. This reliance on regressive revenue generation was apparent at every level of government, but was most important for the local state. Who benefited from this arrangement? Again, there are several answers. The first is the elites. They used the investment in public goods to attract immigrants to their municipalities in the waning days of slavery and the height of the coffee boom in order to guarantee themselves a sufficiently large labor force. We know this because the historical record tells us so. From physical infrastructure to public health to public education, municipal councilors expressed their concern that their communities might be unattractive to immigrants unless improvements were made. The second answer is the residents of the municipalities that made these investments. The competition among communities for labor meant that investment in human development could not go unattended. The commu-

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nity that failed to address the infrastructural or health needs of its local economy and population risked being bypassed by another municipality that took an active stance in developing those goods. This also ensured that spending on public goods was directed to recently settled neighborhoods of the municipal cities, neighborhoods where population growth outstripped the water supplies, waste abatement, or disease eradication efforts. Public investment was not guided by elite consumption of public goods, in other words. There was an articulated sense that improvements in health conditions and education attainment of the non-elite groups were good for the municipality as a whole. Because of the uneven levels of investment in these goods, though, Brazilians benefited unevenly. This brings us to the final answer to the question of who benefited from the fiscal structure of the Brazilian state, the answer that has the most importance for this book’s contribution to our understanding of Brazilian underdevelopment: the economically vibrant municipality. The feedback loop between local economic conditions, local revenues, the ability to borrow, and the capacity to spend produced vast differences in per capita investments between municipalities in the same region of Brazil experiencing the same commodity boom. They each caught the wave of the boom at a different moment, however, and that appears to have conditioned their ability to grow their local economy and achieve a momentum that outlasted the boom. This may help us understand the bigger patterns of boom and bust, rise and decline, vibrancy and dormancy, experienced over and over again throughout Brazil’s history. It may not be the case that municipalities failed to thrive because they failed to invest in their future, an argument that has been made elsewhere. It may be more accurate to understand the failure to thrive beyond the years of an economic boom in the context of the fiscal structure of the Brazilian state: municipalities invested to the capacity allowed by their local economy. Absent an exogenous shock that provided new vibrancy to the local economy, their ability to invest in the public good was limited. The independence of Brazil and the rise of the fiscal state coincided in the nineteenth century. The new nation adopted the notion of the fiscal state, that it bore a responsibility to provide investments in social overhead capital that promoted standards of living and quality of life of its citizens— but failed to back it up with resources adequate for fulfilling the municipal mandate. Each community thrived or struggled accordingly.

Data Appendix

T

he data used in this book were compiled by me from manuscript and print sources that were incomplete series and employed both budgeted and actual financial values up to 1889. This appendix explains both the nature and the treatment of this data. It offers the caveats the reader needs to be familiar with in order to utilize these findings in reference to his or her work and the work of others. An appendix containing the revenue and expenditure data for the seven municipalities may be found at press.uchicago.edu /sites /hanley.

Data for the Empire The financial data for all levels of government was reported in two forms: ex ante budgets and ex post financial results of the fiscal year. Luciana Lopes and I have shown elsewhere that budgets are not a reliable source for municipal-level data in nineteenth-century São Paulo, as actual financial results bore little similarity to their ex ante budgets, and there are no observable patterns that can compensate for the discrepancies.1 The difference in historical interpretation that results from the use of budgets as opposed to actual results is staggering. This point cannot be stated strongly enough. Table 4.2 indicates for each municipality the number of fiscal years that yielded only budgeted data, and the number of years for which I have reported results by municipality. In all tables that calculate per capita revenues and investments, I used actual results. The only exceptions are 1870s Campinas and 1880s Ribeirão Preto, where per capita values are based on budgets. For tables averaging categories of revenue and expenditure across the empire, I used

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all data available to me, including budgets and actual results. As for the general and provincial levels of government, data are actual for the former and budgeted for the latter. The provincial-level data figure hardly at all in this book, and are offered in chapter 2 merely to demonstrate the order-of-magnitude difference between general and provincial resources. Still, the reader should be aware of this discrepancy and use budgeted values only as an approximate guide to relative weights of revenuegenerating and expenditure-absorbing categories.

Data for the Republic In the republic, all revenues and expenditures are actual results drawn from the state statistical yearbook, the Anuário estatístico, which was published for the period 1894 to 1928. “São Paulo state,” when included in tables, represents the sum of all municipalities net of the seven cases under study to show what the financial profile of the remaining 110 to 240 municipalities in the province looked like in the aggregate.2 There is one major issue with this data that the reader needs to be aware of: not all municipalities reported their financial results in all years. The sum of all municipalities is actually the sum of all municipalities that turned in their forms in a given year. A quick glance down the rolls of the consolidated balance-sheet data printed in the yearbooks confirms that many municipalities failed to deliver their data in any given year. Therefore, these São Paulo state numbers should not be interpreted as an absolute and factual representation of the collective revenues and expenditures of São Paulo’s municipalities. As with their peers, the seven case-study municipalities had occasional lapses in reporting data. These lapses were most common in the 1890s, when the State of São Paulo was initially organizing the collection and publication of public statistics, but they occurred occasionally after 1900. There are no municipal-level financial data published for any municipality in the yearbooks for 1897 and 1921– 25. Aside from these years when no municipal data were published, the seven cases lack data for the following years: Amparo, 1909; Araraquara, 1893– 95, 1900– 1901, 1926– 28; Campinas, 1894– 96; Franca, 1894– 95, 1900, 1902– 3, 1917, 1926; Ribeirão Preto, 1926; Rio Claro, 1896, 1901– 2, 1904; São Carlos, 1926, 1928. Where I employ three-year running averages, I adjust the calculation to compensate for the missing years, averaging the available data by the number of annual observations.

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The Fiscal Year The fiscal year underwent four modifications during the first century of Brazil’s independence. The original fiscal year ran from 1 October to 30 September and was in place from October 1834 to September 1850. After a transitional fifteen-month fiscal year, reported for 1 October 1850 to 31 December 1851, São Paulo municipalities moved to a calendar fiscal year that ran from 1 January 1852 to 31 December 1861. In 1862, municipalities reported results for the January– June period, and then transitioned to a new fiscal year that ran from 1 July to 30 June. The fiscal format began in July 1862 and was in effect through June 1890. The fall of the empire and declaration of the republic created something of a black hole for municipal-level data, as national- and state-level governments reorganized their fiscal structure and reporting protocols, so we lack data for the years 1890– 93. By 1894, the State of São Paulo had organized a new state agency, the Repartição de Estatística e Archivo do Estado de São Paulo, as the state’s statistical and archival department. The department was responsible for soliciting, gathering, organizing, and publishing statistical data about the state of São Paulo, the first of which appeared with results from 1894. From 1894 through the end of the republic, the fiscal year returned to the calendar-year format.

Population Population figures are from Camargo except for two municipalities in a single year. For 1874 Araraquara and Franca, I used the population data from the 1872 census as reported in the Relatório Bookwalter.3 Camargo’s figures for these two municipalities were much higher than the census data, and implied a population decrease from 1874 to 1886, a time when the region was expanding. All of Camargo’s remaining values match Bookwalter and the census of 1872. Aside from this exception, all other population data are taken from or based on Camargo. His is the most comprehensive source of population data for the province and state of São Paulo, but it is episodic, capturing snapshots at specific points in time. Namely, he provides municipal-level population for 1836, 1854, 1874, 1886, 1900, 1920, 1934, and 1940. Because many of the investments I study are lumpy in that huge single contributions were made in one or more years

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data appendix

rather than made more evenly in installments, and were paid for at discrete moments in time that differed from place to place, the absence of spending in a year for which we do have Camargo’s population data or the absence of population data for a year of major capital investments signified a lost opportunity to compare per capita spending between municipalities. Therefore, I used linear interpolation to fill in the twentyyear gaps between Camargo’s figures to estimate population. All per capita data for revenues and expenditures include some years of estimated population. Rates of population are calculated from Camargo except for tables using 1928 as an anchor year. In those instances, 1928 is interpolated from 1920 and 1934 populations.

Nominal versus Real Milréis There is no good price index for the Brazilian economy before 1870, so tables that contain data from the empire reflect nominal values before 1870 and real values after. I used a hybrid index that splices the indices developed by Catão and Haddad, using estimates by Leff as a check.4 Leff and Catão both offer indices for the period 1870– 1913. Haddad’s index begins in 1908 and runs to 1939. Figure 5.1, which sets all three to 1913 = 100, shows that these estimates track well with one another. All real figures in this book are deflated to 1913 = 100 using Catão and Haddad.

Per Capita Revenues and Expenditures I used balance sheets and budgets to create Excel spreadsheets of revenues and expenditures for the empire, and year-end financial data from statistical yearbooks to create spreadsheets for the republic. In the empire, where the available data were from budgets and actual reported results, I chose year-end figures wherever available, and used budgeted values only to fill in where gaps in actual values spanned a decade. Tables with per capita values are calculated from actual reported revenues and expenditures only, except in the following cases where budgets were the only documentation available: Campinas in the 1870s and 1880s, except for 1880, which is actual; in São Carlos in the 1880s, except for 1880, which is also actual; and Ribeirão Preto in the 1880s. In all tables with per capita values from the empire, then, the calculations reflect the amount collected

data appendix

229

and expended. In the republic, all data reflect actual revenues and expenditures. I deflated total nominal revenues and expenditures using Catão and Haddad, and generated per capita values with the interpolated population data. I then averaged the data by decade beginning with the “0” years, for example 1870– 79, 1880– 89, 1890– 99, and so forth.

Abbreviations AEL

Arquivo Edgard Leuenroth da Universidade Estadual de Campinas

ALESP

Acervo Histórico da Assembleia Legislativa Estadual de São Paulo

AMA

Arquivo Municipal de Amparo

AMC

Arquivo Municipal de Campinas

AMF

Arquivo Histórico Municipal “Capitão Hipólito Antônio Pinheiro” in Franca

APESP

Arquivo Público do Estado de São Paulo

APHRC

Arquivo Público e Histórico do Município de Rio Claro

APHRP

Arquivo Público e Histórico de Ribeirão Preto

APHRT

Arquivo Público Histórico “Prof. Rodolpho Telarolli,” Araraquara

BCMRP

Biblioteca da Câmara Municipal de Ribeirão Preto

MHF

Museu Histórico de Franca “José Chiachiri”

Notes Chapter 1 1. “O Município quer queiram, quer não, os adeptos ferrenhos dos regimes centralisadores, é a célula mater da nacionalidade, é a verdadeira fôrça propulsora da grandesa moral e material das nações politicamente organisadas, no regime democrático.” Sampaio, “O município em face da discrimimação de rendas,” 5. 2. In practice, most revenue generated for municipal public finance came from the urban settlements, and the concerns of the municipality as expressed by the municipal council often referred to problems in the urban areas within its borders. 3. Schumpeter, “The Crisis of the Tax State,” 7. 4. Velez, Paes de Barros, and Ferreira, Inequality and Economic Development in Brazil. 5. Adamo, “Race and Povo.” See also Thorp, Progress, Poverty and Exclu­ sion; Oliveira and Roberts, “Urban Development and Social Inequality in Latin America”; Reygadas, “The Construction of Latin American Inequality”; and Blofield, ed., The Great Gap. 6. Carvalho and Colistete find that municipal investment in local schools occurred only in the coffee-growing regions of São Paulo State, and that investments in 1904– 7 had persistent positive effects on long-term economic development, expressed in higher-than-average secondary school test scores and per capita incomes in 2007. Wegenast’s research on the relationship between concentrated landownership, willingness to spend on education, and the perpetuation of inequality suggests the same. Mariscal and Sokoloff find a strong relationship, both positive and negative, between investments in human capital formation via education and long-term income. Martínez-Fritscher, Musacchio, and Viarengo explain investments in education beyond elite circles in terms of political competition: states gained leverage in a regime where voting was based on literacy by increasing the number of literate adult males. Carvalho and Colistete, “Education Performance”; Wegenast, “Cana, Café, Cacao”; Mariscal and Sokoloff, “Schooling,

234

notes to pages 3–6

Suffrage, and the Persistence of Inequality”; Martínez-Fritscher, Musacchio, and Viarengo, “The Great Leap Forward in Education in Brazil.” 7. Some of the goods and services I study here exhibit the nonrivalry, nonexcludability characteristics of public goods as economists conceive them, but some do not. The term public as used in this book refers to that which is provided, sponsored, or incentivized by the government. 8. There is an extensive literature on public finance that studies these issues, their extensions, and more. Classic texts include Samuelson, “The Pure Theory of Public Expenditure”; Tiebout, “A Pure Theory of Local Expenditures”; Lindahl, “Just Taxation— a Positive Solution”; Musgrave, The Theory of Public Finance; Oates, Fiscal Federalism; and Head, Public Goods and Public Welfare. 9. Lazzarini and Musacchio, “Leviathan as a Minority Shareholder”; Hanley et al., “Critiquing the Bank.” 10. Cardoso, “Monetary and Fiscal Reforms”; Matijascic and Kay, “Pensions in Brazil”; “Tick Tock,” Economist, March 24, 2012; Margolis, “Will Retirees Bankrupt Brazil?,” Bloomberg View, November 20, 2014; Romero, “An Exploding Pension Crisis Feeds Brazil’s Political Turmoil,” New York Times, October 20, 2015. 11. Dillinger, Brazil: Issues in Fiscal Federalism; Rodden, Hamilton’s Paradox; Alston et al., Brazil in Transition. In a recent remarkable and discouraging example of old-style tendencies, Rio de Janeiro’s governor declared a state of financial calamity in June 2016 and called for a bailout from the federal government to secure the funding to complete preparations for hosting the Olympic Games. At least two other states were in the same precarious situation. Phillips, “Financial Calamity Declared in Rio Weeks before Olympics, but Games Will Go On,” Wash­ ington Post, June 17, 2016. 12. Garcia, “Brazilian Police Greet Tourists with ‘Welcome to Hell’ Sign at Rio Airport,” Independent (London), June 28, 2016. 13. Both Rodden and Alston et al. see important reforms under the Cardoso administration that lessened the incentives that lead to this type of overborrowing. Alston et al. have faith that this tumult will strengthen, rather than undermine, Brazil’s democracy. Rodden, “Federalism and Bailouts in Brazil”; Alston et al., Brazil in Transition. 14. Some premodern tax states bore a resemblance to some features of the fiscal state. Indeed, scholars argue that the evolution of political institutions and fiscal regimes went hand in hand in the rise of modern nation-states. But the broad adoption of the fiscal state in which a centralized authority mobilized public revenue and destined some of them for human development was a feature of the nineteenth century. Benedict, Cities and Social Change in Early Modern France; Bonney, ed., The Rise of the Fiscal State in Europe c. 1200– 1815; Dincecco, Political Transformations and Public Finances; Hohenberg and Lees, The Making of Modern Europe, 1000– 1994; Levi, Of Rule and Revenue; Monson and Scheidel, eds., Fiscal Regimes and the Political Economy of Premodern States; Schumpeter,

notes to pages 7–11

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“The Crisis of the Tax State”; Webber and Wildavsky, A History of Taxation and Expenditure in the Western World. 15. Yet the nature and level of support is often driven by philosophical differences over taxation within and between political parties. The rise of the Tea Party in the United States is but one example of this phenomenon. 16. Cardoso and Lains, eds., Paying for the Liberal State; Duffy, The Sanitar­ ians; Monkkonen, The Local State; Yun-Casalilla and O’Brien, The Rise of the Fis­ cal States. 17. Note that the phrase “voting with their feet” never appears in his article, but it is how people colloquially sum up his main contribution. Tiebout, “A Pure Theory of Local Expenditures”; Stiglitz, “The Theory of Local Public Goods”; Stiglitz, “The Theory of Local Public Goods Twenty-Five Years after Tiebout”; Oates, Fiscal Federalism; Rodden, Hamilton’s Paradox. 18. Russell-Wood, “Sulcando os mares.” 19. There is a rich literature on Brazil’s history of the colonial response to shifting economic incentives over the centuries. See especially Dean, With Broadax and Firebrand; Ebert, Between Empires; Graham, Feeding the City; Kuznesof, House­ hold Economy and Urban Development; Metcalf, Family and Frontier in Colonial Brazil; Nazarri, Disappearance of the Dowry; Schwartz, Sugar Plantations in the Formation of Brazilian Society; Zemella, O abastecimento. 20. Dean, With Broadax and Firebrand. 21. Boxer, “The Municipal Council of Bahia”; Omegna, A cidade colonial; Zenha, O município no Brasil, 1532– 1700. For a comparative look at local governance in the colonial era, see Russell-Wood, ed., Local Government in European Overseas Empires, 1450– 1800. 22. Zenha, O município no Brasil, 125– 26. 23. Dean, With Broadax and Firebrand; Zemella, O abastecimento. 24. For an excellent account of the transfer of the court and its impact on notions of empire and on the city of Rio de Janeiro, see Schultz, Tropical Versailles. 25. Brazil, Coleção de leis e decretos (hereafter referred to as Leis e decretos), Constitution of 1824, Law of 1 October 1828, and Law of Constitutional Reforms of 12 August 1834. The 1824 constitution contained just three brief articles related to municipal administration. These assured that all existing and future cities and villages would have councils responsible for the economic and municipal government; that the councils would be elected; and that the councils’ activities and responsibilities would be decreed in a future regulatory law. The Law of 1 October 1828 was that regulatory law. It included an extensive list of duties, just a selection of which is included here. This was the foundational law from which all future legislation concerning the organization, operation, rights, and duties of municipal administrators was derived. The 1834 Law of Constitutional Reforms is known popularly as the Ato Adicional, or Additional Act. It created provincial legislative assemblies and subjected municipal governments to their oversight.

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notes to pages 12–15

26. Brazil, Leis e decretos, Lei of October 1, 1828. 27. Indignation over this arrangement was compounded by the fact that the municipalities were required to pay these employees out of their meager revenues. The only municipal employee who paid his own way was the town procurador, or attorney. The procurador acted as the town accountant, lawyer, and tax farmer, earning a commission on all taxes, fees, and fines he collected. This fee went as high as 12% in some years, settling down to a standard 10% by the end of the empire. Leis e decretos, Lei of October 1, 1828, article 81. Bieber finds that in the province of Minas Gerais, this practice was widespread, such that “by the 1840s, few locally elected officials remained.” Power, Patronage, and Political Violence, 93. 28. The literature on this topic is too vast to list here, but is well represented in the bibliography. 29. Graham, Patronage and Politics. 30. Carvalho, Teatro de sombras; Dolhnikoff, “Entre o centro e a província”; Graham, Patronage and Politics; Needell, The Party of Order. Dolhnikoff writes, “Provincial autonomy focused on taxation, provincial and municipal jobs, public works and the police force, so that governments had the financial capacity to decide on investments in areas vital to economic expansion, the exercise of coercive force and control over part of the public machine” (81– 82). 31. Carvalho, Teatro de sombras, 163. 32. Lewin, Politics and Parentela in Parnaíba; and Harris, Town and Country in Brazil. Other important works on patronage and clientelism include Kraay, Race, State and Armed Forces; Leal, Coronelismo; Woodard, A Place in Politics. The municipality’s ruling body, the câmara municipal, or municipal council, has been portrayed in the empire as a cog in a highly centralized political organization that allowed the hand of the emperor to reach down to the level of ward boss (Graham, Patronage and Politics); the domain of local notables who waged their power struggles by commandeering the largest effective clientele cum electorate (Needell, The Party of Order; Kraay, Race, State and Armed Forces); and economically weak (Carvalho, Teatro de Sombras; Bieber, Power, Patronage, and Political Violence). 33. Woodard makes this argument for the republican period (1890– 1930), but his strong assertion that republican culture drew on imperial practices allows us to extend this observation back in time. A Place in Politics, 53– 54. 34. On political competition as incentives for investment in education, see Martínez-Fritscher, Musacchio, and Viarengo, “The Great Leap Forward in Education in Brazil.” 35. Chalhoub, Cidade febril; Needell, “The Revolta contra Vacina”; Meade, “Civilizing” Rio; Holloway, Policing Rio de Janeiro; Hahner, Poverty and Politics; Fischer, A Poverty of Rights. 36. Bieber, Power, Patronage, and Political Violence, 51. 37. McCreery, Frontier Goiás.

notes to pages 15–21

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38. Woodard, A Place in Politics, 39. 39. Borja, “Past, Present, and Future of Local Government in Latin America.” On colonial administrative ineptitude, see Omegna, A cidade colonial, 224– 25. 40. Of course, Brazilians who did not engage in the formal economy, living subsistence existences far from settled urban areas, were not subject to the many commercial transaction taxes that comprised local revenue sources, but travelers’ accounts from the nineteenth century indicate that the formal economy did in fact touch most Brazilians’ lives at some point. 41. Regarding property taxes, the report concluded, “There is no such thing in actuality, for it would be one more burden on landowners. Only in some indeterminate future it may be substituted for the tax on exports.” Brazil, Ministério da Fazenda, Relatório e projecto de lei, 1883, 47– 48. 42. Direct taxes on income and property were not established in Brazil until the twentieth century. Earlier, the closest thing Brazil had to an income tax was a tax collected on inheritance and wealth transfers, while the only type of property tax was the décima urbana, a 10% tax on the rental value of urban real estate. According to Evan Lieberman, when an income tax was finally enacted in 1922, collection was uneven and sporadic, and income taxes were a meaningless component of the GDP before 1930 (Race and Regionalism, 110– 24). See especially figure 4.3 on p. 118. 43. Even this paltry allocation represented a near doubling of municipal revenue at midcentury (2.7% in 1856). Carvalho, Teatro de sombras, 26. 44. Costa, “Town and Country,” 181. 45. Metcalf, Family and Frontier in Colonial Brazil. 46. Elizabeth Kuznesof and Nelson Nozoe each document the nature of the São Paulo economy in the late eighteenth and early nineteenth centuries, establishing the varied productive activities and their relationship to early wealth creation. Daniel Pedro Müller’s 1835 survey of the province provides a detailed inventory of a robust if modest and predominantly domestic economy. Kuznesof, Household Economy; Nozoe, São Paulo; Müller, Ensaio. Pairing these works with Joseph Love’s seminal work, São Paulo in the Brazilian Federation, illustrates just how dramatically the region’s fortunes changed across the nineteenth century. 47. A total of 129 of the state’s 155 municipalities provided data to the statistical agency Repartição de Estatística e Archivo do Estado de São Paulo, or the Statistics and Archives Division of the State of São Paulo. The other 26 did not. Relatório do anno de 1897, S. Paulo, 1899. 48. Relatório apresentado ao Exmo. Sr. Presidente da provincia de S.Paulo pela Commissão Central de Estatistica (S. Paulo: Leroy King Bookwalter, Typographia Kind, 1888), 197 (hereafter, Relatório Bookwalter). 49. São Paulo’s extensive territory was divided into ten zones in the definitive study of demography and economic development by the Brazilian economist José Francisco de Camargo. Two zones, the capital and the Paraíba Valley, were key to

238

notes to pages 22–28

the colonial economy. The Paraíba Valley’s economic importance, which had been tied more to the Rio de Janeiro coffee economy than the São Paulo economy, peaked early in the nineteenth century and declined thereafter, to be eclipsed by the three zones in which the sample municipalities reside. The remaining five zones did not become economically or demographically significant until the twentieth century. Camargo, Crescimento. 50. Love, São Paulo, 32. 51. Although other regions of São Paulo flourished after the turn of the century in response to international demand for coffee and the arrival of the railroad, they are omitted from this study because of the lack of comparative data for the imperial period. Most of the municipalities in those zones were not founded until after 1900. No other region of the country challenged São Paulo for economic supremacy by the end of the nineteenth century. It was the most prosperous of any Brazilian province until the rubber boom of the early twentieth century. 52. The currency in Brazil during the nineteenth century and the first part of the twentieth was the milréis, or thousand réis. One milréis was written as 1$000 and was worth between US$0.38 and US$0.54 in the period under study. The average tax burden per inhabitant in 1897 in the state of São Paulo was 6 milréis. Campinas’s tax burden was more than double that, at 12.810 milréis. São Carlos’s average tax burden was just 3.372 milréis. The tax burden per capita for the remaining cities, in alphabetical order, was as follows: Amparo, 3.914; Araraquara, 5.530; Franca, 7.487; Ribeirão Preto, 7.452; and Rio Claro, 8.140. Rio Claro’s was the eighth highest tax rate in the state. Campinas’s was the fourth highest. São Paulo, Relatório do anno de 1897, 562– 66. See the data appendix for exchange rates and currency values.

Chapter 2 1. Brazil, Coleção de leis e decretos, Constituição Política do Império do Brasil, 1824, title 7, article 167. 2. Calculating the number of municipalities per province relative to provincial populations in the 1872 census gives a median population per municipality of approximately 9,700. Brazil, Recensamento do Brasil em 1872. 3. São Paulo had eighty-nine municipalities in 1872, compared with thirty at independence. Brazil, Recensamento do Brasil em 1872; Odália and Caldeira, eds., História do estado de São Paulo. 4. Brazil, Leis e decretos, Constituição, 1824. 5. See, for example, Brazil, Leis e decretos, Lei 514, 28 October 1848. 6. In São Paulo, this responsibility devolved to the municipalities. São Paulo, Coleção de leis, Lei 57, 18 March 1836. 7. Brazil, Leis e decretos, Law of Constitutional Reforms, 12 August 1834.

notes to pages 28–33

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8. São Paulo, Coleção de leis, Lei 11, 24 March 1835. 9. Brazil, Leis e decretos, Constituição, 1824, and Lei of 1 October 1828. The 1824 constitution contained just three brief articles related to municipal administration. These assured that all existing and future cities and villages would have councils responsible for their economic and municipal government; that the councils would be elected; and that the councils’ activities and responsibilities would be decreed in a future regulatory law. The Lei of 1 October 1828 was that regulatory law. This was the foundational law from which all future legislation concerning the organization, operation, rights, and duties of municipal administrators was derived. 10. Brazil, Leis e decretos, Lei 16, 12 August 1834. 11. São Paulo, Coleção de leis, Lei 18, 11 April 1835. The municipal council had the right to supply information to the assembly on the suitability of the mayoral candidates being considered for the position, as well as to petition for a mayor’s removal on the grounds of ineptitude or criminal activity. 12. Brazil, Leis e decretos, Lei of 1 October 1828, title 5, “Dos Empregados.” 13. For a typical description of the responsibilities of each position, see Posturas, Franca, 1875, chapter 13, “Dos empregados da câmara.” 14. São Paulo, Coleção de leis, Lei 930, 21 May 1866, article 33. 15. Voting eligibility at the municipal level was set by articles 91 and 92 of the 1824 constitution. 16. Minutes from Franca’s municipal council meetings routinely included mentions of fines levied against recalcitrant councilors. AMF, “Atas da câmara municipal de Franca, 1834– 1837.” 17. In Portuguese, A Commissão de Contas e Orçamentos de Câmaras Municipais. 18. The amount of detail can be seen on the handwritten notes found on draft and edited codes found in the archives, which include article-by-article notations on language and content. 19. This procedure is gleaned from the notations on archival documents in the ALESP Império collection. For some municipalities in some years, all documents from every step of the procedure are in the collection. More commonly, partial collections of the drafts, revisions, and final codes are found in the ALESP archives. 20. The archival records do not contain full codes of municipal ordinances until the 1830s, when relationships between central, provincial, and municipal authorities were sorted out. The two oldest municipalities, Campinas (founded in 1791) and Franca (1821), did not produce full codes until 1834 and 1837, respectively. References to posturas at earlier dates suggest that councils created rules and regulations to govern the settlements and hinterlands soon after independence, very probably patterning them after the Philippine Ordinances that governed colonial Brazil, but the fully elaborated codes appear to coincide with the Additional Act that created the provincial legislative assemblies. All other municipalities presented full codes to the provincial authorities within a few years of their elevation

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notes to pages 33–43

to municipal seat. Araraquara (founded 1832) had produced a code by 1834; Rio Claro (1845) had a code by 1846; Amparo (1857) published a code in 1859; São Carlos (1865) published its code in 1866. Only Ribeirão Preto (1871) did not produce a code on the heels of its elevation to municipal seat. It adopted neighboring São Simão’s code in 1877 while preparing a new code of its own, published in 1883. The early codes survive in manuscript form in the ALESP Império collection. Later codes were published in collections of laws. 21. The first three articles are drawn from Franca’s 1837 ordinances, published in 1839. The second three are from Rio Claro’s 1846 ordinances, articles 10– 12. ALESP Império, Franca, box FALP 263, CP39_009, doc. 10386; and Rio Claro, box FALP 270, CP46_016, doc. 10556. 22. The twin codes were Campinas 1858 and 1864 and Rio Claro 1867 and 1884. The adopter codes were 1834 Araraquara, which bore strong similarities to 1833 Campinas, and 1872 Araraquara, which was almost identical to 1867 Rio Claro in organization and length. 23. The full set of codes from all seven cases has upwards of one dozen chapters, making full exposition in table form unwieldy. Examples were chosen to best represent the structural changes within municipalities and across time. 24. Relatório Bookwalter, 283, 293, 331, 372, 468, 485. 25. Kuznesof, Household Economy, 111. The classic work on the evolution of São Paulo city is Morse, From Community to Metropolis. 26. Camargo, Crescimento, vols. 2 and 3, table 22. 27. Posturas, Campinas, caderno 1.2, 1858, 1864, 1872, 1880; Amparo, 1865; Amparo, 1866; São Carlos, 1866; Rio Claro, 1867; Araraquara, 1872; Ribeirão Preto, 1889; Franca, 1889. Measurement specifications changed from the palmo, roughly equivalent to eight inches, to the meter after the introduction of the metric system in 1872. 28. Posturas, Franca, 1889, article 12, and Ribeirão Preto, 1889, article 22. 29. Posturas, São Carlos, 1886, article5. 30. Posturas, Amparo, 1883, article 12. 31. Posturas, Ribeirão Preto, 1889, articles 2, 6, 7. 32. Posturas, Rio Claro, 1867, article 18; Araraquara, 1872, articles 19– 20; São Carlos, 1886, article 14; Ribeirão Preto, 1889, article 25; Amparo, 1883, article 19. 33. São Paulo, Coleção de leis, Lei 64, 14 April 1872, article 41. Dísticos were two-verse poems. 34. Posturas, Araraquara, 1889, article 2, paragraph 7, n. 20. 35. Posturas, Amparo, 1865, articles 80– 81. The fines were ten and thirty milréis, respectively. 36. Posturas, Franca, 1882, article 13; São Carlos, 1886, article 53; Rio Claro, 1884, article 56. 37. ALESP Império, Rio Claro, box FALP 270, CP46_016, doc. 10556, article 9. 38. Posturas, Amparo, 1883, article 118. This requirement was shared by other

notes to pages 43–47

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municipalities. In 1866 São Carlos, property owners had one year to complete construction, but in 1886 they had just six months. Posturas, São Carlos, 1866, article 10; 1886, article 17. 39. ALESP Império, Rio Claro, box FALP 270, CP46_016, doc. 10556, article 28; Rio Claro, 1867, article 36; São Carlos, 1886, article 53; Ribeirão Preto, 1889, article 32; Araraquara, 1872, article 34; Franca, 1882, article 16. 40. Posturas, Rio Claro, 1867, article 35: Araraquara, 1872, article 33, São Carlos, 1886, article 53; Ribeirão Preto, 1889, article 35. 41. Posturas, São Carlos, 1886, article 53; Araraquara, 1889, article 3, paragraph 1, n. 11; Ribeirão Preto, 1889, article 34. 42. Posturas, Ribeirão Preto, 1889, articles 40– 43 and 184. The law prohibiting U-turns applied only to the heavier vehicles that carried materials or loads, not to passenger vehicles. 43. Posturas, Franca, 1889, articles 96– 99. 44. Posturas, São Carlos, 1866, articles 19– 24. 45. Ibid., article 25. 46. Posturas, Araraquara, 1872, article 111. 47. ALESP Império, Rio Claro, box FALP 270, CP46_016, doc. 10556, articles 34 and 38; Posturas, Rio Claro, 1884, article 132; São Carlos, 1886, article 53. São Carlos specifically prohibited “clothes, animal intestines, or other objects in the municipal fountain.” 48. Posturas, Araraquara, 1889, article 3, paragraph 1, n. 29– 31. 49. Posturas, Franca, 1889, titulo 7, articles 133– 39, “Do encanamento d’agua potavel.” 50. Posturas, Rio Claro, 1867, article 57; Araraquara, 1872, articles 42– 49; Araraquara, 1889, articles 3, 17– 18. 51. Posturas, Amparo, 1865, article 92. 52. Richard Graham makes this point for Salvador as well. Feeding the City, chapter 6. 53. This registry was in common use across municipalities. In it, the meat inspector recorded the day, month, and year of inspection, the name of the butcher, the color and breed of cattle, and their distinguishing marks. The inspector, who also collected the head tax on cattle scheduled for slaughter, was responsible for buying and maintaining the registry book. 54. Posturas, Rio Claro, 1867, articles 47– 54; São Carlos, 1886, articles 92– 96. 55. São Paulo, Coleção de leis, Lei 21, 5 March 1838. Although the law required municipal councils to vaccinate their populations in 1838, the provincial budget already included funding for vaccines in 1835, the first year the provincial assembly had power to legislate. São Paulo, Coleção de leis, Lei 40, 18 March 1836, article 1, paragraph 10. 56. ALESP Franca, box FALP 273, CP50_007, doc. 10606 and box FALP 552, PR50_003, doc. 16401. We know from mention in subsequent laws that Franca’s

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notes to pages 47–49

first posturas were published on 29 April 1851. The manuscript version from 1850 represented the final, approved draft that was subsequently published in the collection of laws. 57. ALESP Império, Rio Claro, box FALP 270, CP46_016, doc. 10556, article 42; Posturas, Rio Claro, 1867, article 106; Franca, 1882, article 28; Ribeirão Preto, 1889, article 93. 58. Posturas, Ribeirão Preto, 1889, article 37; ALESP Império, Rio Claro, box FALP 270, CP46_016, doc. 10556, article 18. 59. Posturas, Franca, 1882, article 19. 60. Posturas, Araraquara, 1872, article 97. 61. Posturas, Ribeirão Preto, 1889, article 88; Franca, 1882, article 43. 62. Posturas, Franca, 1882, article 16. 63. Posturas, Rio Claro, 1867, article 109; Franca, 1882, articles 40– 42. 64. Posturas, Franca, 1882, article 52. 65. Posturas, Araraquara, 1889, article 2, paragraph 7, n. 16, and article 3, paragraph 1, n. 7. 66. Posturas, Amparo, 1865, article 82. 67. Posturas, Araraquara, 1872, article 99. 68. ALESP Império, Rio Claro, box FALP 270, CP46_016, doc. 10556, article 17; Posturas, São Carlos, 1865, article 83. 69. Posturas, Franca, 1882, article 37. 70. Posturas, Ribeirão Preto, 1889, article 89. Wage data are rare, but a list of day laborers working on a church in Amparo in 1874 indicates that wages ranged from 2.5 to 5 milréis per day. Workers engaged in street and garden repairs in 1900 Franca earned daily wages in the same range, according to the level of skill they possessed. AMA, Manuscritos, Império/Matriz Receitas Despezas/ Feria dos Trabalhadores das Obras da Matriz Nova/Folha 6; MHF, box 10, vol. 52, Registro de Contratos Efetuados entre a Câmara Municipal e Particulares para Obras Publicas, 1900– 1902/Folhas 5 e 6/Servente de Pedreiro/Contractor: Ubaldo Jose Gonsalves/Date: 31 May 1900. 71. Posturas, Ribeirão Preto, 1889, article 50. 72. Posturas, São Carlos, 1866, article 70. 73. Posturas, Franca, 1882, articles 47 and 120– 28. 74. Posturas, Franca, 1889, articles 201– 7. 75. Posturas, Ribeirão Preto, 1889, article 52. 76. Posturas, Rio Claro, 1867, article 59; Ribeirão Preto, 1889, articles 90– 91; Franca, 1889, articles 55– 56. 77. Posturas, Franca, 1882, articles 48– 49; Ribeirão Preto, 1889, article 50. 78. ALESP Império, Rio Claro, box FALP 270, CP46_016, doc. 10556, article 12; Posturas, Rio Claro, 1867, article 114; São Carlos, 1866, articles 67– 69; Araraquara, 1872, articles 101– 2; Franca, 1882, article 54; Rio Claro, 1884, article 125; Ribeirão Preto, 1889, article 49.

notes to pages 49–55

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79. Dicionário Houaiss defines voltarete as “an old card game with a deck of 40 cards and three players who receive nine cards apiece, with 13 cards left on the table to draw from.” Dicionário Houaiss eletrônico da língua portuguesa, versão 1.0 (Rio de Janeiro: Editora Objetiva Ltda., 2009.) 80. Posturas, Franca, 1882, article 55 and 1889, articles 84 and 87. 81. Posturas, Rio Claro, 1867, article 115; Rio Claro, 1884, article 127. 82. ALESP Império, Rio Claro, box FALP 270, CP46_016, doc. 10556, article 39. 83. Posturas, Rio Claro, 1867, article 108; Araraquara, 1872, article 96; Franca, 1882, article 45; Rio Claro, 1884, article 120. 84. Posturas, Campinas, 1864, article 60. 85. Posturas, Rio Claro, 1867, article 110 and 1884, article 122; Araraquara, 1872, article 98; Franca, 1882, article 44. 86. Posturas, Ribeirão Preto, 1889, article 48. 87. Posturas, Araraquara, 1889, article 9. 88. Posturas, Franca, 1889, article 54. 89. Posturas, Rio Claro, 1884, articles 128– 30. 90. Posturas, Ribeirão Preto, 1889, article 51. 91. Posturas, Araraquara, 1889, article 3, paragraph 1, n. 13. 92. ALESP Império, Rio Claro, box FALP 270, CP46_016, doc. 10556, articles 13– 14; São Carlos, 1866, article 33; Araraquara, 1872, articles 59– 63; São Carlos, 1886, articles 82– 83; Ribeirão Preto, 1889, articles 97, 125– 27; Araraquara, 1889, article 5. 93. Posturas, Campinas, 1864, article 38. 94. Posturas, Franca, 1889, article 72. 95. “Primeira necessidade.” Posturas, São Carlos, 1886, articles 85– 86, 90– 91. For the municipal market’s role in urban food provision, see Graham, Feeding the City. 96. Posturas, Amparo, 1865, articles 63– 65. 97. Posturas, Campinas, 1864, article 36; Franca, 1889, article 23. 98. São Paulo, Decretos do executivo. Decreto 13, 15 de janeiro de 1890. 99. Brazil, Leis e decretos, Constitution of 1891, article 68. 100. Ibid., article 5. Article 5 makes it clear that states were responsible for their own governance and administration, and they had to pay for it themselves. The Union was allowed to offer aid in cases of public calamity. 101. São Paulo, Constituição, 1891, article 53, paragraph 4, defined electors as citizens older than twenty-one years having resided in the municipality at least one year. Those excluded were beggars, illiterates, low-ranking military except those in military academies, and clergy in regular or monastic orders subject to a vow of obedience, a rule, or a statute requiring them to denounce their individual liberty. 102. São Paulo, Leis e resoluções decretadas pelo congresso legislativo do estado de São Paulo em 1891, Lei 16 of 13 November 1891. 103. Guia do arquivo público e histórico de Ribeirão Preto, 22.

244

notes to pages 55–61

104. São Paulo, Leis e resoluções . . . em 1891, Lei 16, 13 November 1891, articles 27 and 29. 105. São Paulo, Leis, decretos, e resoluções, Lei 1038, 19 December 1906 and Lei 1103, 26 November 1907. In 1898, the Municpiality of São Paulo passed a municpal law, Law 374 of 29 November, replacing the intendant with a mayor. This suggests that municipalities could choose a different administrative structure from the one stipulated in Law 16 of 1891 if they desired. With the exception of Ribeirão Preto, which introduced direct elections for mayor for the term beginning in 1902, and Franca in a single year (1900), the muncipalities seemed to have conformed to the intendancy format established in Law 16 until it was revoked in 1906. After the 1907 modification bringing the selection of the executive back into the municipal council, only three major cities of the state— São Paulo, Campinas, and Santos— retained direct elections for mayor. In those three cases, mayors served threeyear terms. For the text of São Paulo municipal Law 374, see https:// leismunicipais .com.br. 106. During personal visits to each municipality, I found few posturas in their archives; just two maintained copies of the codes from years of the republic in their print collection. I cannot say with all certainty that the printed codes of ordinance for these two municipalities were the only codes published during this period, and that no other revisions were introduced from 1890 to 1930, but I believe this to be the case based on my visits to the archives and direct questions posed to their archivists. This impression is confirmed by the mayor’s 1930 report to the Campinas municipal council, which mentions that the municipality had been operating through ad hoc additions and modifications to the 1880 code of ordinances! Only in 1929— one year shy of the Revolution of 1930 that, ironically, would strip it of its autonomy— did the municipal council approve the revision to the fifty-year-old statutes. Therefore, I present the material in this section in a voice that assumes the rarity of updated posturas to be the case for the remaining municipalities. AMC, mayor’s report for 1930, 9. 107. Posturas, Rio Claro, 1893, chapter 1. 108. The central urban district remains unchanged to this day, despite growth. 109. Camargo, Crescimento, vols. 2 and 3, tables 33– 35, 41. 110. Posturas, Ribeirão Preto, 1902, article 101. 111. Posturas, Ribeirão Preto, 1902, articles 101– 2. 112. Posturas, Ribeirão Preto, 1902, Title 1, chapter 4, section 4, “Dos theatros e das salas de reuniões publicas.” 113. Posturas, Rio Claro, 1893, article 47; Ribeirão Preto, 1902, articles 209– 14. 114. Posturas, Ribeirão Preto, 1921, articles 237– 39. 115. Posturas, Rio Claro, 1893, articles 23– 34. 116. Posturas, Rio Claro, 1923, chapter 13, articles 184– 226. 117. Posturas, Ribeirão Preto, 1902, chapter 4; Rio Claro, 1923, chapter 16. 118. Posturas, Rio Claro, 1923, chapter 16, article 243.

notes to pages 61–68

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119. Posturas, Rio Claro, 1893, article 63. 120. Posturas, Ribeirão Preto, 1902, articles 224, 226. 121. Ibid., article 227. 122. Posturas, Rio Claro, 1923, articles 244– 75. 123. Love, São Paulo.

Chapter 3 1. Dickens, A Tale of Two Cities, chapter 8, “Monseigneur in the Country,” 142. 2. Saint-Hilaire, Viagem, 108. 3. Ibid. 4. Levi, Of Rule and Revenue; Rosenthal and Wong, Before and Beyond Di­ vergence. 5. Szreter, “Economic Growth.” 6. Duffy, The Sanitarians; Evans, Death in Hamburg; Monkkonen, America Be­ comes Urban. 7. Cardoso and Lains, eds., Paying for the Liberal State; Monkkonen, America Becomes Urban. 8. Brazil, Ministério da Fazenda, Relatório e projecto de lei, 1883, 47– 48. The property tax referred to in this report was not the broad-based tax on real estate values that was assessed in the modern fiscal states, however. It was a tax on undeveloped land to incentivize bringing it into productive use. 9. The income tax was proposed in Brazil in 1889 but not enacted until 1922. Even then it was not enforced until 1926. According to Lieberman, collection was uneven and sporadic, and income taxes were a meaningless component of GDP up to 1930. Race and Regionalism, 110– 24 and 131– 37; see especially figure 4.3. Taxes on the rental value of urban property existed since the nineteenth century, but taxes on the value of urban and rural real estate were not implemented until the late twentieth century. Versano, “A evolução do sistema tributário brasileiro.” 10. Tessitore, “As fontes da riqueza pública,” 69– 74. 11. Carvalho, Teatro de sombras, 26– 28; Spoerer, “The Evolution of Public Finances,” 119. 12. Up until 1830, no budget for the general government was voted on by the parliament. Government expenditures were paid with revenues established in earlier laws. It was the treasury’s responsibility to create the imperial balance sheets. After 1830, budgets were debated in parliament and approved by the Chamber of Deputies. Carreira, História financeira, 611. From municipal archives we know that older municipalities dating from the imperial times produced revenue and expense reports, but the infrastructure for formal budgeting at the national level did not exist until the 1830s. At the provincial and municipal levels, formal budgeting by legislative assemblies and municipal councils began in 1835 after passage of the

246

notes to pages 68–72

1834 Additional Act, which created the provincial assemblies and granted them the power of municipal fiscal oversight. 13. Brazil, Leis e decretos, Lei of 24 October 1832, articles 83– 90. Determination of provincial expenditures remained in the control of the general government until 1834. 14. Ibid., Lei 99, October 31, 1835. 15. These included the dízima, or tithe on the Chancery, fees on various military and religious orders, fines levied by the Supreme Court, fines and fees on higher education, taxes on the mail service, fees on property transfers and inheritance, and all the tailings from the minting of gold and silver coins. Brazil, Leis e decretos, Lei 99, 31 October 1835. 16. Ibid., article 12. 17. Carreira offers totals for the three levels of governance for the 1855– 56 and the 1885– 86 fiscal years: História financeira, 410– 11, 544– 45, 562. His reports indicate that provincial revenues totaled between 17% and 19%. Villela publishes higher provincial revenue values (20%– 25%), but this is an artifact of how the data are presented. Total provincial revenues were 20%– 25% of the value of general revenue. Provincial revenues as a percentage of total public revenue collected by all three levels of government were the 17%– 19% identified by Carreira. The nominal values are the same in either case. Villela, “Distribuição regional,” 251. 18. The 1883 report referred to above recognized that this allocation of public revenue was badly unbalanced, and sought to remedy it by finding ways to improve revenue flows to the provinces. This concern was addressed by the republican regime in 1889, in at least one fashion: subsoil mineral rights were ceded to the former provinces (now states) in hopes of providing them with a lucrative revenue stream. It did not work. Triner, Mining and the State. 19. Carreira, História financeira, 503. 20. Total revenue available to the government included extraordinary revenue sources, but ordinary revenue comprised 94% or more of total Brazilian general revenue. 21. São Paulo, Coleção de leis, Lei 11, 24 March 1835. 22. Some exported goods were taxed by the general government, not the provincial government. These were sugar, coffee, cotton, and tobacco, as well as cattle and horses. The tax on all other goods was under the province’s purview. Tessitore, “As fontes da riqueza pública,” 151. 23. This was one of many taxes related to slaves, but the others were miniscule and short lived. They included a tax on the sale of slaves that had not paid the tax on the sale of slaves(!), a tax on slaves in convents, and a tax on slaves that departed the province by sea. 24. Klein, “The Internal Slave Trade”; Motta and Marcondes, “O comércio de escravos.”

notes to pages 73–84

247

25. Tessitore, “As fontes da riqueza pública,” 116– 23. 26. Tessitore, “As fontes da riqueza pública.” These taxes were granted to municipalities in 1849, reverted to the province in 1850, passed to municipalities in 1858, returned to thr province in 1863, and finally were ceded to the municipalities in 1867. Slaughter rates persisted throughout the empire. The tax was set at 1$600 (1.6 milréis) per head of cattle, $800 (0.8 milréis) per pig, and $400 (0.4 milréis) per sheep, paid when they entered the food supply. 27. Originally, the tax was 20% on the price of aguardente, and then by 1840 became a fixed rate on commercial establishments that sold it. 28. São Paulo, Coleção de leis, Lei 142, 9 March 1840. 29. I compared financial statements to tax codes published in close proximity to the years 1865, 1875, and 1885. Not all municipalities published tax codes and financial statements in all three decades. This section draws on the following municipalities for each decade: four of seven for ca. 1865 (Amparo, Araraquara, Rio Claro, São Carlos); five of seven for ca. 1875 (Amparo, Araraquara, Campinas, Franca, São Carlos); all seven for ca. 1885 (Amparo, Araraquara, Campinas, Franca, Ribeirão Preto, Rio Claro, and São Carlos). 30. Of the four cases ca. 1865, only Araraquara had meaningful revenues from extraordinary accounts; 32% came from revenues collected by the local agent of the provincial treasury. Every municipality had a provincial treasury agent to collect the taxes that comprised the provincial revenues, including taxes on wealth transfers and on interurban economic exchange. It is not clear if these taxes were to remain in the municipality or be sent along to the provincial treasury. São Carlos reported 12% of its revenue from accounts receivable, the place on the balance sheet where past debts were recovered. Amparo generated just 2% of its revenue from extraordinary accounts. Rio Claro reported no extraordinary revenues at all. 31. It remained very important only for Araraquara and Campinas, making up more than one-third and almost one-half of their revenue, respectively; for Amparo it fell to 13.7%; Franca recorded just under 2% of its revenue as coming from the liquor tax. 32. Franca’s revenues from aguardente are suspiciously small, and may have been subsumed under the Licenses in General category. 33. A fifteen-kilo sack of coffee imported to the United States in 1886 cost $3.53. The ten-réis tax per fifteen-kilo sack, at the 1886 exchange rate of 2,632 réis to the dollar, placed the tax at US$.0038. The tax, then, was 0.1% on the international value of Brazilian coffee. Delfim Netto, “O problema do café no Brazil,” 60. 34. Brazil, Balanço da receita e despeza da republica, 1894, 1899, and 1904; An­ uário estatístico do Brasil, 1908– 1912, vol. 2, Economia e finanças; and Anuário es­ tatístico do Brasil ano 5— 1939/40. 35. Brazil, Anuário estatístico do Brasil ano 5— 1939/40, “Principais receitas arrecadadas pela união— 1900– 1930,” 1410– 11. 36. Brazil, Estatistica das finanças do Brasil, 9.

248

notes to pages 84–92

37. Quoted in ibid. 38. Brazil, Anuário estatístico do Brasil ano V— 1939– 40, 1410. 39. Brazil, Leis e decretos, Constitution of 1891. Triner finds that this had little effect on state revenues. See Mining and the State, especially chapter 3. 40. However, states could no longer charge a tax on goods produced in other states, nor could they create taxes on intra- or interstate transportation of any goods, domestic or foreign. This provision abolished the internal customs that had been so important for provincial revenues in the empire. Brazil, Leis e decretos, Constitution of 1891, article 9, paragraph 2; article 11, paragraph 1. Love shows that this provision was the subject of drawn-out legal debates and negotiations, and that many interstate tariffs remained in effect throughout the republic. Love, São Paulo, 195– 96. 41. Love, São Paulo, 111. 42. Brazil, Anuário estatístico do Brasil, 1908– 1912, 251– 52 and 257. 43. The remaining states collected Industries and Professions at both the state and local levels, splitting the take between the two. APESP, Anuários estatísticos, 1894– 1928; and Brazil, Estatistica das finanças do Brasil, 40. 44. São Paulo, Leis e resoluções . . . em 1891, Lei 16, 13 November 1891, articles 38– 39. 45. BCMRP, Manuscript Collection, livros de registro das leis, Lei 3, 8 June 1894. 46. Ibid., Lei 171, 18 November 1910; Lei 302, 31 October 1924. 47. Carvalho, Teatro de sombras, 26– 28; Spoerer, “The Evolution of Public Finances,” 119; Brazil, Anuário estatístico do Brasil, 1908– 1912, 257; and Anuário es­ tatístico do Brasil ano V— 1939– 40, 1410. 48. Carreira, Historia financeira, 483. 49. Quoted in Brazil, Estatistica das finanças do Brasil, 14. 50. Summerhill, Order against Progress. 51. In all, the Brazilian government contracted foreign loans to compensate for deficits or to refinance old loans in 1829, 1839, 1852, 1859, 1863, 1865, 1871, 1875, 1883, and 1886. The loans up to 1859 were all related to Brazil’s indebtedness resulting from its independence from Portugal, but the remaining loans were for “service to the empire” or “material improvements of the empire”— service to Brazil’s balance sheet, in other words. In addition to these loans were loans contracted primarily to finance railway construction and development. Carreira, His­ toria financeira, 655– 66. William Summerhill interprets this borrowing capacity as evidence of Brazil’s vibrant creditworthiness in the empire, and contends that the borrowing allowed its government to strengthen the central state, fight and win wars, invest in infrastructure, and extend its authority over the continental-sized nation. It did nothing, however, to deepen the nation’s own financial development. Brazil continued to rely heavily on borrowing in the republic to cover deficits, and turned into a serial defaulter. Summerhill, Inglorious Revolution. 52. Dean, “Latifundia and Land Policy.”

notes to pages 96–110

249

53. BCMRP, Manuscript Collection, livros de registro das leis, Lei 3, 8 June 1894; Lei 302, 31 October 1924; Posturas, Rio Claro, 1893; Rio Claro, 1923, chapter 54.

Chapter 4 1. Maia, O município, 192. 2. ALESP Franca, Ofício, box FALP 223, CF84_047, doc. 7246. Financial statements reveal that the municipality had been repairing this bridge since the early 1840s. Box FALP 042, CF44_013, doc. 4453. 3. The literature on cronyism is reviewed in chapter 1. 4. Maia, O município, 239. 5. São Paulo, Coleção de leis, Lei 25, 19 February 1836. The stipulations regarding revenue reporting read like an open admission of the difficult financial circumstances in which municipal councils were likely to find themselves. The note that the revenue accounts should list the fiscal year to which they relate as well as the amount owed but uncollected suggests that accounts were routinely in arrears. On the expenses side, we see that, as mentioned above, municipal employees and contractors went unpaid in difficult times. These payables were then liquidated in prosperous years. 6. ALESP Municipal collections. 7. This archive is the Acervo Histórico da Assembleia Legislative de São Paulo (ALESP). 8. ALESP Campinas, box FALP 80, CF53_015, doc. 4585. 9. ALESP Campinas, box FALP 45, CF45_004, doc. 4492. 10. MHF, Câmara Municipal de Franca, Relatórios de Indendentes Executivos, box 50, vol. 338. Data: 1873– 1880– 1893– 1895. 11. Ibid. 12. Maia, O município, 190. Maia was no radical outsider. He was a native of Rio de Janeiro, the center of power in the empire, held an advanced degree from the São Paulo Academy, and was a member of the Imperial Order of the Rose. 13. Ibid., 191. 14. Ibid. 15. This requirement was established in 1841. São Paulo, Coleção de leis, Lei 2, 21 January 1841. These are separate from the intendants’ reports, which were circulated at the municipal level. 16. A political scientist may wish to test this impression through a systematic review of municipal subventions in the context of party affiliations and political bosses. 17. In reality, these were two structures, as the jail and the municipal headquarters were always housed in the same building.

250

notes to pages 110–115

18. The Portuguese term for the principal church in each town is Igreja Matriz, Mother Church. 19. ALESP Amparo, box FALP 103, CF58_002, doc. 5249. 20. Ibid. 21. ALESP Amparo, box FALP 110, CF60_002, doc. 5477. 22. ALESP Amparo, box ESP 034, CF63_001, doc. 683. 23. ALESP Amparo, box FALP 201, CF80_002, doc. 6777. 24. ALESP Amparo, box FALP 238, CF87_001, doc. 7412; CF87_002, doc 7478; and CF87_003, doc. 7479. 25. ALESP Campinas, box FALP 157, CF70_018, doc. 6377 and FALP 168, CF71_159, doc. 8976. 26. ALESP Campinas, box FALP 201, CF80_026, doc. 9230. 27. ALESP Campinas, box FALP 237, CF86_197, doc. 9818. 28. ALESP Campinas, box FALP 245, CF89_022, doc. 10073. 29. ALESP Franca, box ESP 066, CF77_038, doc. 1197. 30. ALESP Ribeirão Preto, box FALP 229, CF85_085, doc. 8806. 31. ALESP Ribeirão Preto, box FALP 235, CF86_116, doc. 9873. 32. ALESP Amparo, box FALP 110, CF60_002, doc. 5477. 33. ALESP Amparo, box FALP 596, PR84_102, doc. 19230. 34. ALESP Campinas, box FALP 238, CF87_034, doc. 7358. 35. ALESP Campinas, box FALP 238, CF87_035, doc. 9932. 36. ALESP Campinas, box FALP 153, CF69_019, doc. 8768. 37. An arroba is a unit of measurement, the dimensions of which varied over time and by user but most commonly meant fifteen kilos. 38. A second request for the same project in 1880 reveals that the provincial assembly provided 4,000 milréis of the original 5,000 requested, but the municipal council failed to invest the full amount during the fiscal year. According to the strict accounting regulations imposed by the provincial authority, unused funds reverted to the provincial treasury at the end of the fiscal year. The council, then, was left with an unfinished project and a new round of bureaucracy to deal with. ALESP Campinas, boxes FALP 186, CF76_014, doc. 6673 and FALP 201, CF80_028, doc. 9232. 39. ALESP Franca, box FALP 223, CF84_047, doc. 7246. No specific value was placed on this project, nor was a resolution noted on the official document. I lack spreadsheets for 1885– 87, but the 1887– 88 and 1888– 89 spreadsheets show no transfers of funds from the provincial government for these projects. 40. ALESP Franca, box FALP 337, IO54_005, doc. 11822. Note that this project did not originate with a request from Franca’s municipal council, but was a provincial project proposal. Therefore, it is not reflected in table 4.3. To put the 80,000 milréis in perspective, Franca’s 1854 revenue totaled just 868 milréis. This bridge would have improved commercial circulation and economic growth, but the customs taxes on interprovincial trade would have gone to São Paulo’s treasury, not

notes to pages 115–128

251

Franca’s. The benefit to Franca would have come via taxes and fees on the retail and wholesale commerce between municipal businesses and passers-through. 41. ALESP Amparo, box FALP 141, CF66_169, doc. 6120. 42. ALESP Franca, box FALP 245, CF89_039, doc. 10088. 43. ALESP Ribeirão Preto, box FALP 229, CF85_085, doc. 8806. 44. The one anomaly is Franca, whose population saw little growth before the twentieth century. Its population hovered between 8,000 and 10,000 souls through 1886. 45. ALESP Campinas, box FALP 098, CF57_009, doc. 5200. 46. ALESP Franca, box FALP 099, CF57_023, doc. 5109. 47. Ibid. 48. MHF, Câmara Municipal de Franca, Relatórios de Indendentes Executivos, box 50, vol. 338, 1873. ALESP Franca, boxes ESP 028, CF60_039, doc. 499 and ESP 054, CF73_032, doc. 958. 49. ALESP Franca, box ESP 066, CF77_038, doc. 1197. 50. ALESP Franca, box FALP 239, CF87_051, doc. 9947. 51. ALESP Campinas, box FALP 162, CF71_024, doc. 6424. 52. BCMRP, Manuscript Collection, Atas da Câmara Municipal, livros 1 e 2, 1874– 84. 53. ALESP Ribeirão Preto, box FALP 225, CF84_100, doc. 9680. This funding request for a water delivery system was part of a larger request for supplemental funding. The other two appeals for money were 6,000 milréis for a jail and 1,500 milréis for a ferry to cross the Mogyguassú River, located between Ribeirão Preto and its neighboring towns of Pitangueiras and Jaboticabal. 54. ALESP Ribeirão Preto, box FALP 240, CF87_099, doc. 10006. 55. ALESP Ribeirão Preto, box FALP 604, PR88_038, doc. 19722. 56. ALESP Império manuscript collection, keyword search empréstimo, from 1 January 1836 to 15 November 1889. ALESP Legislação, Leis Ordinárias collection, year-by-year search from 1 January 1836 to 15 November 1889. 57. São Paulo, Coleção de leis. In order of mention, Lei 16, 16 March 1880; Lei 53, 1 April 1884; Lei 39, 17 April 1888; and Lei 194, 5 June 1889. 58. In addition to that stipulation, foreign loans required the approval of the São Paulo state legislature. 59. APESP, Anuário estatístico para 1896, 471. Franca’s deficit was 25% of its revenue. 60. APESP, Anuários estatísticos, 1894– 1928. These deficits are calculated based on ordinary revenues, net of loans, to illustrate the shortfalls that gave rise to borrowing. 61. Hanley, Native Capital, chap. 4. 62. São Paulo, Leis, decretos, e resoluções, Lei 16, 13 November 1891, article 44. As financial arrangements for funding public goods became more complex, including ceding some revenue rights to contractors, charging usage fees for services, and

252

notes to pages 128–139

securitizing public works loans, the municipal council’s accountants were permitted to include projected revenue from the public works funded by the loan in their revenue calculations. This change was introduced in São Paulo Lei 1094 of 23 October 1907. 63. The real burdens were probably heavier than this, as municipalities carried loans on their books in some years for which they registered no debt service, or lumped debt payments into miscellaneous accounts, obscuring their value. 64. Hanley, Native Capital, chap. 4; Holloway, The Brazilian Coffee Valorization. 65. APHRP, Manuscritos, pasta 2, Câmara Municipal/ Financas/Orçamentos/ 1901– 1913/1909; pasta 3, Prefeitura/Representação/ Projecto de Lei visando empréstimo de 2.000:000$000 para a Prefeitura/1909. 66. AMA, livro 294, Resolução no. 96 of 1914. 67. APHRP, Prefeito Municipal-Câmara Municipal (hereafter PM-CM), receitas e despezas, 1890– 1930.

Chapter 5 1. ALESP Rio Claro, box ESP 067, CF77_086, doc. 1213. 2. MHF, box 50, vol. 341, intendant’s report for 1Q1903, s/n. 3. Almanak de S. João do Rio­Claro para 1873, 47– 55. 4. The procedure for breaking away and establishing a new municipality was laid out in republican laws governing the municipality. See São Paulo, Leis, decre­ tos, e resoluções, Decree 1533, 28 November 1907. 5. BCMRP, Manuscript Collection, Atas da Câmara Municipal, livro 1, 1874– 80. 6. ALESP Franca, box FALP 042, CF44_013, doc. 4453. 7. ALESP Franca, box ESP 054, CF73_032, doc. 958. 8. ALESP Franca, box FALP 012, CF37_033, doc. 3633. Financial statement for the 1835/36 fiscal year. 9. APHRC, Livros de Atas. Atas for 17 March 1863, 31 May 1863, 17 October 1863, 20 November 1863, 29 February 1864, and 7 April 1864. 10. BCMRP, Manuscript Collection, Atas da Câmara Municipal, livro 1, atas for 26 December 1874 and 19 April 1879. 11. BCMRP, Manuscript Collection, Atas da Câmara Municipal, livro 1, atas for 8 August 1879 and 13 October 1879. The council made subsequent requests in almost every year through 1886, when the third book of minutes, livro 3, 1881– 86, concludes. In some cases, the council recorded its intention to write to the provincial authorities for new funds or reimbursements. In other cases, it approved spending specific amounts from its own coffers to pay for the necessary repairs. 12. ALESP Campinas, box ESP 046, CF70_017, doc. 606. 13. AMA, Câmara Municipal de Amparo, balancetes 1858– 1880, pastas com documentos referentes ao ano de 1873 a 1877.

notes to pages 139–145

253

14. APHRC, Livros de Atas, ata for 29 April 1864. 15. BCMRP, Manuscript Collection, Atas da Câmara Municipal, livro 3, 1881– 86, atas for 20 June 1884 and 21 July 1884. 16. Boxer, “The Municipal Council of Bahia,” 102; Brazil, Leis e decretos, Lei of 1 October 1828. 17. This secularization or prohibition of church cemeteries has been seen as an important factor in shaping the late nineteenth-century millenarian leader Antônio Conselheiro, who traveled throughout the Northeast region tending to neglected church burial grounds. See Levine, Vale of Tears. 18. APHRC, Livros de Atas, ata for 8 October 1871. ALESP Rio Claro, box ESP _063, CF76_072, doc. 1156. Financial statements show that it took another five years before this need was fulfilled. 19. BCMRP, Manuscript Collection, Atas da Câmara Municipal, livro 3, ata for 21 July 1884. 20. AEL, O Correio de Campinas, 27 November 1885. 21. APHRC, Livros de Atas. Atas for 4 March 1878, 17 August 1884, 5 September 1893, and 13 October 1893. These were of the “Glob-Gas” system. 22. BCMRP, Manuscript Collection, Atas da Câmara Municipal, livro 3, Ata for 10 January 1884. 23. AMA, Manuscritos, Império, receitas e despesas, Câmara; ALESP Amparo, boxes FALP 232, CF86_002, doc. 7424 and ESP 092, CF89_001, doc. 1426; ALESP Araraquara, box FALP 232, CF86_005, doc. 7427 and ESP 091, CF88_003, doc. 1043; ALESP Ribeirão, box FALP 219, CF83_080, doc. 9633 and FALP 229, CF85_086, doc. 8807. 24. ALESP Franca, box ESP 085, CF85_040, doc. 1524. 25. AEL, O Correio de Campinas, 1885, various dates. 26. AEL, O Correio de Campinas, 27 November 1885. 27. São Paulo, Leis, decretos, e resoluções, Lei 16 of 13 November 1891. 28. Water and sewer networks and their direct impact on public health will be discussed in chapter 6. 29. APHRP, Manuscritos, pasta 3, Intendênca/Desenvolvimento urbano e rural/ Obras Públicas/ Propostas para execução de servicos/1891 and Intendência/Serviços Municipais/ Recursos Energéticos/ Proposta para illuminação da cidade de Rib Preto/1891. 30. APHRP, Manuscritos, pasta 1, Câmara/Serviços Municpais/ Recursos energéticos, “Bases do contrato” de iluminação pública/1898. 31. APHRP, Prefeito Municipal-Câmara Municipal (hereafter PM-CM) collection, Relatórios anuais, report for 1904. This collection contains the published annual reports delivered by the Municipal Prefect (PM) to the Municipal Council (CM), as well as reports by the council president. 32. APHRP, Manuscritos, pasta 1, Câmara/Servicos Municpais/Agua e Esgotos/Requerimento/1899.

254

notes to pages 145–150

33. APHRP, Manuscritos, pasta 2, Câmara/ Desenvolvimento urbano e rural/ Obras Públicas/ Propostas para calçamento da parte central da cidade/Abril de 1905. 34. APHRP, Manuscritos, pasta 3, Intendênca/Desenvolvimento urbano e rural/ Obras Públicas/Propostas para execução de servicos/1891. 35. APHRP, PM-CM, mayor’s report for 1904. 36. APHRP, Manuscritos, pasta 1, Câmara/ Desenvolvimento urbano e rural/ Obras Públicas/Correspondência recebida/1901 and Câmara/ Finanças/ Indicação. 37. These consolidated balance sheets include entries for personnel, official publications, public works, lighting, street cleaning, hygiene and assistance to the indigent, water and sewer, public schools, marketplace and slaughterhouse, cemetery, debt service, accounts payable, legal fees, expropriations, extraordinary expenditures, and diverse expenditures. 38. APHRT, Correio de Araraquara, 24 June 1894. 39. APHRP, PM-CM, intendant’s report for 1901; Manuscritos, pasta 2, Câmara/ Desenvolvimento urbano e rural/Obras Públicas/Construção do calçamento e paralelepidpedos . . . /1902. This quarry is now a beautiful park— Parque Curupira— that serves the city with green space, walking paths, waterfalls, and stunning views. 40. MHF, box 50, vol. 338, intendant’s report for 1Q1894. 41. MHF, box 50, vol. 340, intendant’s report for 2Q1898; vol. 341, intendant’s report for 4Q1904. 42. AMC, Relatório Annual série, intendant’s report for 4Q1894. 43. APHRP, Manuscritos, pasta 3, Intendênca/Desenvolvimento urbano e rural/ Obras Públicas/Abaixo assinados/1894– 95. 44. APHRP, Manuscritos, pasta 2, Câmara/ Desenvolvimento urbano e rural/ Obras Públicas/Requerimentos recebidos/1895. 45. APHRP, PM-CM, mayor’s report for 1904. 46. AMC, Relatório Annual série, intendant’s report for 4Q1894. 47. Mac Hardy’s market capitalization in 1905 was close to one million milréis, making it the eighth-largest publicly traded industrial firm in the state. Hanley, Native Capital, 94. AMC, Relatório Annual série, intendant’s report for 4Q1894. 48. AMA, livro 294, Resolução n. 34 of 1913 and n. 53 of 1914. 49. APHRP, Manuscritos, pasta 3, Intendênca/Desenvolvimento urbano e rural/ Obras Públicas/Ofícios expedidos/1897. 50. APHRP, PM-CM, mayor’s report for 1902. 51. APHRP, Manuscritos, pasta 2, Câmara Municipal/Serviços Municipais/ Abastecimento/Comericalização de generos pelo Mercado Municipal/1899– 1905; PM-CM, mayor’s report for 1902. The contract was originally signed in 1899. Complaints about its management arose almost immediately. The municipality tried to reclaim the market in 1908 by securing a loan to buy back the concession, but it failed for financial reasons, as discussed in chapter 6.

notes to pages 150–156

255

52. APHRT, Câmara Municipal, Relatório apresentado em sessão de 15 de ja­ neiro de 1909. 53. MHF, box 50, vol. 339, intendant’s report for 1895. 54. MHF, box 61, vol. 421, mayor’s report for 1912; box 63, vol. 431, mayor’s report for 1916; APHRP, PM-CM, mayor’s report for 1920. 55. MHF, box 64, vol. 435, mayor’s report for 1920. NB: the report is undated and is filed among documents for 1919. The actual reference year of the report was gleaned from its contents. 56. APHRP, PM-CM, mayor’s report for 1923. 57. AMA, livro 294, Resolução n. 91 de 1914 and Resolução n. 109 de 1914. 58. AMC, Relatório Annual série, mayor’s report for 1914. 59. Ibid., mayor’s report for 1921. 60. Ibid., mayor’s report for 1930. 61. APHRP, Manuscritos, pasta 2, Câmara Municipal/Serviços Municipais/Cemitério/Requerimento recebido/1895. 62. APHRT, Câmara Municipal, Relatório apresentado em sessão de 15 de ja­ neiro de 1909. 63. APHRT, Câmara Municipal, Relatório apresentado em sessão de 1 de março de 1907; relatório for 15 January 1909. 64. APHRT, Câmara Municipal, Relatório de 15 de janeiro de 1917. 65. MHF, box 50, vol. 338, intendant’s report for 4Q1894; vol. 440, intendant’s report for 1895 and 1Q1896; and vol. 339, intendant’s report for 2Q-4Q1896. 66. MHF, box 50, vol. 341, intendant’s report for 1Q1903. 67. APHRP, PM-CM, mayor’s reports for 1902 and 1904. 68. MHF, box 50, vol. 341, intendant’s report for 4Q1902. 69. Ibid., intendant’s report for 1Q1903. 70. APHRT, Câmara Municipal, relatório for 15 January 1909. 71. Crônica dos Prefeitos de Rio Claro: 1908– 1983, Decreto Estadual n. 1938, 28 September 1910; Livros do Tombo, Lei n. 179, 15 December 1926. 72. AMC, Relatório Annual série, mayor’s report for 1924; for 1927, 13; for 1930, 8. 73. Camargo, Crescimento, vols. 2 and 3, tables 15, 21. 74. The data on building trends in this paragraph come from APHRP, Impressos, Publicações/Dados Estatísticos Sobre Rib. Preto/ Datas/1920 a 1987/ Estatística da cidade de Ribeirão Preto/ Número de prédios existentes nos anos de 1900 a 1933. 75. APHRP, PM-CM, mayor’s report for 1911– 20. The Belle Époque as a time of urban renewal and modernization through adopted European tastes is an important theme in Brazilian history. See especially Chalhoub, Trabalho, lar e bote­ quim; Meade, “Civilizing” Rio; and Needell, A Tropical Belle Époque. 76. APHRP, Manuscritos, pasta 1, Camâra/Financas/Orcamento/ Parecer/1897. 77. MHF, box 50, vol. 343, intendant’s report for 4Q1906.

256

notes to pages 157–165

78. APHRT, Câmara Municipal, relatório, 1 March 1907. 79. Ibid., 15 January 1909. 80. Ibid. 81. Câmara Municipal de Rio Claro, Relatório annual, 1910, 7. 82. Ibid., 8. 83. APHRP, PM-CM, mayor’s report for 1923. 84. Ibid., mayor’s report for 1923, 1924, 1926, 1927, 1929, and 1930. These loans were contracted at 12% annual interest and were amortized across five years. 85. Ibid., mayor’s report for 1927, 18. 86. APHRP, Manuscritos, pasta 2, Câmara/ Desenvolvimento urbano e rural/ Obras Públicas/Propostas de execução de serviços/1914. Because the council did not respond, the engineers took it upon themselves to conduct this survey. They presented it to the council in May 1914, seven months after their initial proposal, and requested 9,000 milréis in payment plus another 1,582 milréis in materials costs. They claimed they did it for love of country, not for profit. The council’s internal notes show that the engineers took on the project without the council’s permission, but given that such a project would be needed sooner or later, it agreed to pay something. In the end, the report was bought for 5,000 milréis and the 1,582 milréis in expenses. 87. MHF, box 61, vol. 421, mayor’s report for January– February 1911. 88. AMC, Relatório Annual série, mayor’s report for 1929, 5. 89. Ibid., mayor’s report for 1908– 10. 90. São Paulo, Leis, decretos, e resoluções, Lei 16, 13 November 1891, and Lei 1038, 19 December 1906. 91. Ibid., Lei 1103, 26 November 1907. 92. AMC, Relatório Annual série, mayor’s report for 1912. 93. São Paulo, Coleção de leis, Lei 18, 11 April 1835, article 6. 94. MHF, box 65, vol. 440, mayor’s report and miscellaneous requests, 1922. 95. AMC, Relatório Annual série, mayor’s report for 1926. 96. Ibid., mayor’s report for 1922 and 1924. 97. APHRP, PM-CM, mayor’s report for 1924. This division was created by municipal law 304. 98. Ibid., mayor’s report for 1929, 7. 99. Ibid., mayor’s report for 1930.

Chapter 6 1. São Paulo, Coleção de leis, Lei 779, 31 March 1865, article 100. 2. Ibid., Lei 925, 27 April 1866, article 41. 3. Gurgel, Doenças e curas. There is a rich literature on the emergence of scientific understanding of disease across the nineteenth century, including Evans, Death in Hamburg; Johnson, The Ghost Map; Snowden, Naples in the Time of

notes to pages 166–169

257

Cholera; Duffy, The Sanitarians; Melosi, The Sanitary City; Porter, Health, Civili­ zation and the State. 4. Santos Filho and Novaes, A febre amarela em Campinas. 5. Ibid., 179; ALESP Campinas, box FALP 238, CF 87_031, doc. 7355. 6. Stepan, Beginnings of Brazilian Science; Chalhoub, Cidade febril; Needell, “The Revolta contra Vacina”; Meade, “Civilizing” Rio. A similar thread of scientific modernization, reformers, positivists, and the poor runs through the public health literature on other Latin American cities. See, for example, Agostoni, Monuments of Progress, and Armus, The Ailing City. 7. São Paulo state was a leader in public health initiatives, many of which were implemented first in the state and then nationwide. Stepan, Beginnings of Brazil­ ian Science. São Paulo’s public health infrastructure was advanced enough that the state opted out of federal programs during the decentralized political regime of the republic. Hochman, A era do saneamento. 8. Chalhoub, Cidade febril, 107; Brazil, Leis e decretos, Lei of 1 October 1828, article 69. 9. It strains credulity to think that these codes, well established throughout the province of São Paulo, came as a surprise to Rio de Janeiro. Research into Rio’s municipal ordinances may reveal their dormant presence. 10. Mandatory smallpox vaccination was passed into São Paulo provincial law in 1838, although the provincial budget included funding for vaccines already in 1835, the first year the provincial assembly had the power to legislate. São Paulo, Coleção de leis, Lei 21 of 5 March 1838 and Lei 40 of 18 March 1836, article 1, paragraph 10. 11. Actual expenditures on public health as a percentage of total municipal budgets during the empire: São Carlos, 2.3%; Araraquara, 0.3%; Rio Claro, 0.3; and Franca, 0%. Ribeirão Preto budgeted almost 5% for health, but we have no reported financial results for the empire to know how it spent its funds. 12. Campinas, the closest to port of all municipalities, was at least a three-week mule-train trip away from the port city of Santos. The arrival of the rail link in 1872 reduced this trip to mere days. The extension of the railroad into the Baixa Paulista and Mogiana zones made large-scale commercial agriculture possible. Experimental immigration programs to supply the estates with workers began in the Rio Claro region in the 1850s, but state-subsidized immigration resulting in massive inflows did not begin until 1887. Love, São Paulo, 7; Dean, Rio Claro, 157. 13. Smallpox swept through São Paulo periodically during the nineteenth century. Rio Claro had experienced an earlier outbreak in 1844, the year before it was elevated to municipal status. Almanak de S. João do Rio­Claro, 55. 14. APHRC, Câmara Municipal, atas, ata of 10 January 1864 and 7 April 1864; ALESP Rio Claro, box ESP 038, CF65_084, doc. 752. 15. ALESP Campinas, box ESP 042, CF68_023, doc. 376 and box ESP 044, CR69_021, doc. 847. 16. ALESP São Carlos, box FALP 199, CF79_052, doc. 6720. São Paulo, Coleção

258

notes to pages 169–172

de leis, Lei 925 of 27 April 1866, article 41. The 1866 ordinances for São Carlos specify that it was up to the family members to remove their ill to outside the settlement within twenty-four hours of suspicion of illness on the part of the head of household. This suggests that better-off families had both urban and rural residences. The lazaretto would be provided to poor people and to those who did not have a place to go outside the settlement. On the severity of the São Carlos epidemics, see Truzzi, Café e indústria, 44. 17. ALESP Araraquara, box FALP 201, CF80_006, doc. 6778. 18. ALESP Amparo, box ESP 092, CF89_001, doc. 1426; AMA, Manuscritos, Receitas e despezas, Balancete da receita e despeza da Câmara Municipal da ci­ dade do Amparo no anno financeiro de 01 de julho de 1888 a 30 de junho de 1889. 19. ALESP São Carlos, box FALP 206, cf80_240, doc. 6949; ALESP Ribeirão Preto, boxes FALP 192, CF77_070, doc. 9189, FALP 196, CF78_068, doc. 6755, FALP 207, CF81_047, doc. 6973, FALP 215, CF82_078, doc. 9572; ALESP Rio Claro, boxes FALP 188, CF76_059, doc. 9161 and ESP, CF75_139, doc. 1134. 20. This service initially amounted to just 3% of the budget but quickly grew to almost 12% of spending two years later. For the remainder of the decade, the municipality spent between 3,000 and 4,000 milréis per year on trash removal, or between 6% and 10% of total spending. ALESP Amparo, boxes FALP 232, CF86_002, doc. 7424 and ESP 092, CF89_001, doc. 1426; AMA, Manuscritos, Receitas e despezas, Balancete da receita e despeza da Câmara Municipal da cidade do Amparo no anno financeiro de 01 de julho de 1888 a 30 de junho de 1889. 21. ALESP Araraquara, boxes FALP 050, CF47_004, doc. 3389; FALP 075, CF52_001, doc. 4757; ESP 017, CF53_003, doc. 337. 22. Spending on streets and sanitation was registered in sixteen of the forty years for which I have data. 23. Holler, “A economia de Ribeirão Preto,” 20; Pires, “Um estudo de história econômica regional,” 79. The council asked for 2:000$000. It received half that amount the following year. 24. MHF, box 50, vol. 338, intendant’s report for 1873. 25. APHRC, Livros de Atas, ata of 22 November 1877. These minutes record that the council approved the motion to request the money. No funds transferred from the provincial treasury appeared in the municipal balance sheets, however. 26. ALESP Araraquara, box FALP 592, PR82_133, doc. 19014. 27. São Paulo, Coleção de leis, Lei 60 of 15 April 1873; APHRC, Livros de Atas, ata of 5 September 1893. Rio Claro requested a subvention of 50,000 for water and fountains in 1877. The detail that the loan was from the state treasury is found in the municipal council minutes from September 1893. 28. São Paulo, Coleção de leis, Lei 5, 21 March 1879 and Lei 5, 6 February 1889. On the early stock exchange see Hanley, Native Capital, chap. 3. 29. Meade, “Civilizing” Rio; Needell, A Tropical Belle Époque; Skidmore, “Racial Ideas and Social Policy.”

notes to pages 172–176

259

30. APHRP, Prefeito Municipal-Câmara Municipal (hereafter PM-CM), intendant’s report for 1901, 12– 13. 31. Ibid., mayor’s report for 1904, 3. It could have been much worse, he reported, if not for the hard and diligent work of municipal employees that adopted measures established by the State Secretary of Sanitary Services, in accordance with the 1881 Finlay Doctrine about the transmission of yellow fever. 32. MHF, box 50, vol. 341, intendant’s report for 1Q1903. 33. Ibid. 34. APHRP, Manuscript Collection, pasta 1, Câmara/ Representações/ Eleição/ Ofício Expedido, “Discurso do presidente da câmara empossando os novos veradores . . . ,” 1899. 35. APHRP, PM-CM, 1902, municipal council president’s report, 9. 36. APHRP, PM-CM, 1903, mayoral report, 12– 13. 37. São Paulo, Leis, decretos, e resoluções, Lei 43, 18 July 1892, and Decreto 233, 2 March 1894. The sanitary code was reinforced and refined several times during the republic as scientific understanding of health and hygiene and expansion of the state and municipal administrative capacity allowed. 38. MHF, box 50, vol. 339, intendant’s report for 1Q1898. 39. Love, São Paulo, 20– 21. 40. AMC, Leis, resoluções e provimentos, 1895– 1900, Regulamento da Lei 40 de 10 de junho de 1895, 26 November 1895. 41. It was this last provision that allowed Rio de Janeiro to raze the habitations of the poor. I have not come across evidence one way or the other regarding Campinas. This law was the first in a trio of health-related laws passed in Campinas in 1895. Lei 41 regulated the medical profession. Lei 42 established approved building materials and hygiene standards for food-service establishments. 42. Vaccinations were administered at the local level, so there were some expenses involved in their delivery, but the vaccine itself was funded by the state. 43. Santos Filho and Novaes, A febre amarela em Campinas. Before the appearance of yellow fever in 1889, Campinas had suffered periodic epidemics of smallpox and leprosy. 44. AMC, intendant’s report for 4Q1894. 45. Ibid., intendant’s report for 4Q1895. 46. APHRP, PM-CM, intendant’s report for 1896, mayor’s report for 1902. The 1902 report praised the hospital as “one of the best in the state.” 47. MHF, box 64, vol. 435, mayor’s report for 1920. 48. APHRT, Câmara Municipal, Relatório de 15 de January de 1909; Relatório referente ao anno financeiro de 1911; Relatório referente ao exercicio de 1913. 49. APHRC, Livros de Atas, atas of 5 February 1908, 15 June 1913, and 16 June 1923. 50. A 1929 newspaper article covering the cornerstone dedication ceremony for the Santa Casa’s new pavilion indicates that the municipality continued to turn

260

notes to pages 176–180

to the charitable organization to provide service to the needy. O Popular (Araraquara), 17 August 1929. 51. APHRP, PM-CM, mayor’s report for 1920, 103– 13. 52. The first hospital quickly reached capacity, requiring a second to be opened. More than one hundred patients were treated in one month in one of the two hospitals, with ten fatalities. 53. At 5.4% of total spending, Campinas’s spending on streets and sanitation exactly matched the statewide average. Of the remaining six cases under study, only Rio Claro spent more, an average of 6% of total spending. 54. ALESP Campinas, box FALP 201, 207, 213, 233, and 238; box ESP 080 and 082. 55. AMC, intendant’s report for 4Q1894. 56. Mac Hardy’s market capitalization in 1905 was close to one million milréis, making it the eighth-largest publicly traded industrial firm in the state. Hanley, Native Capital, 94. 57. AMC, intendant’s report for 4Q1894 and 4Q1895. 58. Holloway, The Brazilian Coffee Valorization. 59. AMC, mayor’s report for 1912. 60. Ibid., mayor’s report for 1913. The extraordinary expenditures account was more than double the streets and sanitation account. 61. APHRP, Manuscritos, pasta 3, Intendência/Serviços Municipais/Águas e Esgotos/Estudo sobre abastecimento de água/1895. 62. On a subsequent visit, the sanitation inspector criticized the poor hygiene of the public slaughterhouse and demanded urgent action and big expenditures. APHRP, Manuscritos, pasta 3, Intendencia/ Desenvolvimento urbano e rural/ Obras Publicas/Oficios expedidos/1897. 63. APHRP, PM-CM, mayor’s report for 1920. These improvements were paid for through credit operations. 64. Ibid., mayor’s report for 1924 and 1928. 65. MHF, box 50, vol. 339, intendant’s report for 1Q1896. 66. MHF, box 59, vol. 403, mayor’s report for 3Q1900. 67. MHF, box 50, vol. 341, intendant’s report for 1Q1903. 68. Ibid., intendant’s report for 4Q1904. The 1911 mayoral report for Franca indicates that the contract of the previous administration had been renewed. Box 61, vol. 421, mayor’s report for January and February 1911. 69. MHF, box 63, vol. 431, mayor’s report for 1916, folha 18. 70. Public utilities like transportation networks, communications networks, gas companies, and water and sewer companies were the most common types of public service companies to operate as for-profit ventures. See Hanley, Native Capital. 71. Statewide, about 2.5% of municipal spending went to installing and maintaining water and sewer networks. 72. The capital city of São Paulo had taken the same route in a public-private

notes to pages 180–185

261

partnership in which the private company ran and profited from the service, but the municipal government set the rates. This arrangement was later sanctioned in the 1894 Sanitary Code, provided that rates for reasonable usage were low. 73. AMC, mayor’s report for 1911. 74. A new municipal department, the Department of Water and Sewers, was formed to run the network. AMC, Leis, resoluções e provimentos, Lei 326 of 14 May 1924. 75. We know that these rights were upheld at least through 1923. APHRC, “Contracto celebrado entre a câmara municipal de Rio Claro, em novação do contracto assignado com a empresa de água e exgottos aos treze de julho de mil novecentos e quatro para exploração das redes de água e exgottos.” Rio Claro: Typ. Conrado, 1923. 76. APHRC, Câmara Municipal, Relatório annual correspondente ao exercicio de 10 de January a 31 de dezembro de 1909. 77. APHRT, Câmara Municipal, Relatório de 1 de março de 1907. 78. Ibid., Relatório de janeiro de 1909. 79. Ibid., Relatório de 15 de janeiro de 1910; Relatório de Araraquara referente ao anno fianceiro de 1911; Relatório do Prefeito Municipal referente ao exercicio de 1913. 80. MHF, box 50, vol. 340, intendant’s report for 1895. 81. MHF, box 50, vol. 339, intendant’s report for 3Q1897. 82. MHF, box 61, vol. 421, mayor’s report for January and February 1911. 83. MHF, box 50, vol. 341, intendant’s report for 4Q1902; box 61, vol. 421, mayor’s report for January and February 1911. 84. APESP, Anuários estatísticos, balanços de receita e despeza, 1919, 1920, 1928. 85. AMA, livro 294, Resolução n. 22 de 1913, n. 40 de 1914, n. 72 of 1914, n. 117 de 1914; Provimento n. 85 of 1914. 86. AMC, mayor’s reports. The series throughout the 1920s includes Anexos, or annexes, to the annual reports that detail the extension of services to new subdistricts, accompanying the commentaries on where services were inadequate and in need of expansion. 87. APHRP, PM-CM, 1904, municipal council president’s report, 10– 11. The history of Barracão’s urbanization is detailed in Silva, Campos Elíseos. 88. APHRC, Livro de Atas, ata of 15 September 1908. 89. Ibid., ata of 29 March 1922. 90. APHRP, PM-CM, mayor’s report for 1908. 91. MHF, box 50, vol. 338, mayor’s report on the smallpox outbreak, 8 October 1895. 92. Ibid., vol. 339, intendant’s report for 1895. The loan of 5:000$000 was from a local citizen. The reference to wire fencing is from the 1Q1896 report. 93. MHF, box 61, vol. 421, mayor’s report for January– February 1911, 4.

262

notes to pages 185–195

94. APHRP, Manuscript Collection, pasta 1, Câmara/ Finanças/Orçamento/ Parecer da Comissão de Contas e Orçamento/1897. 95. APHRP, PM-CM, intendant’s report for 1896. 96. MHF, box 50, vol. 341, intendant’s report for 1Q1903. 97. Ibid., vol. 343, intendant’s report for 2Q1903. 98. Ibid., vol. 341, intendant’s report for 2Q1904. 99. APHRP, PM-CM, mayor’s report for 1911– 20. 100. APHRC, Livro de Atas, ata of 24 March 1893. 101. APHRP, PM-CM, mayor’s report for 1908. 102. The debt service was raised by doubling the tax on rural businesses within the municipality. APHRP, Manuscritos, pasta 2, Câmara/ Finanças/Orçamentos/ 1902– 1913/Parecer da Comissão de Finanças, 5 October 1893. 103. APHRP, PM-CM, mayor’s report for 1911– 20. 104. AMC, mayor’s report for 1911. 105. APHRP, PM-CM, mayor’s report 1911– 20. 106. MHF, box 65, vol. 440, mayor’s report for 1921; box 66, vol. 441, mayor’s report for 1922. 107. APHRP, PM-CM, mayor’s report for 1911– 20; APESP, Anuários estatísti­ cos, balanço de receita e despeza, 1920. 108. MHF, box 66, vol. 444, mayor’s report for 1925; APHRP, PM-CM, mayor’s report for 1929. 109. Ibid., 1926 hygiene petition. I do not have detailed financial statements for Franca in subsequent years, so I cannot tell if the subvention request was approved.

Chapter 7 1. MHF, box 50, vol. 339, intendant’s report for 2Q-4Q1896. 2. APHRP, Prefeito Municipal-Câmara Municipal (hereafter PM-CM), mayor’s report for 1902. 3. APHRP, Manuscritos, pasta 2, Câmara Municipal/ Educação/ Ensino Fundamental/Projeto de Lei de Instrucção Primária Municipal/1904. 4. São Paulo, Coleção de leis, Lei 48, 6 August 1883, article 13. 5. São Paulo, Código de instrução pública da província de São Paulo, 1854. 6. Ibid., article 163. 7. Ibid., article 104. 8. Carvalho and Colistete, “Education Performance,” 10. 9. Bastos, A província. 10. Ibid. The Province of São Paulo passed laws making schooling compulsory for all children, but did not enforce them. APESP, Annuário do ensino do estado de São Paulo, 11– 27.

notes to pages 195–200

263

11. Bastos, A província, 238. 12. APHRC, Livro de Atas, ata of 17 July 1849, 1 September 1849, 22 November 1849, and 5 September 1850. The provincial budget committee approved 609 milréis for the supplies. The rent would have been an additional five milréis per month. When money did come in for her school, the teacher complained that it was retained by the former president of the council and not turned over to her. 13. Carvalho and Colistete, “Education Performance,” 9. 14. São Paulo, Leis, decretos, e resoluções, Lei 16 of 13 November 1891, article 56. 15. Ibid., Lei 88 of 8 September 1892. On municipal supplements, see article 73. 16. AMC, intendant’s report for 4Q1894, This intendant, Antonio Álvares Lobo, was in office from 1893 to 1895. 17. A Notícia, 5 January 1899. 18. O Imparcial (Araraquara), 2 June 1901. 19. APHRC, Livro de Atas, ata of 18 January 1898. 20. APHRP, PM-CM, mayor’s report for 1902. 21. APHRP, Manuscritos, pasta 2, Câmara Municipal/ Educação/ Ensino Fundamental/Projeto de Lei de Instrucção Primária Municipal/1904, article 7. 22. APHRP, PM-CM, mayor’s report, 1902, 19. 23. Martínez-Fritscher, Musacchio, and Viarengo, “The Great Leap Forward in Education in Brazil,” dismiss immigration as an explanatory factor in the rise of literacy in Brazil after 1889, but they understand the connection between immigration and literacy as being an argument that immigrants were literate, thereby increasing the proportion of literate Brazilians. Theirs is a supply-side argument. The argument made by contemporaries and here is that demand for education by immigrants from countries with a history of higher schooling rates led to higher rates of investment in education in order to compete for these immigrants and their needed contribution to the workforce. 24. APHRP, Manuscritos, pasta 2, Câmara Municipal/ Educação/ Ensino Fundamental/Projeto de Lei de Instrucção Primária Municipal/1904. 25. APHRP, PM-CM, mayor’s report, 1902. These schools needed to enroll a minimum of 25 pupils on a regular basis to qualify for the program. 26. Ibid., mayor’s report for 1920. 27. O Popular (Araraquara), 10 March 1905. 28. Ibid., 2 July 1905, 28 June 1908; Jornal de Notícias (Araraquara), 19 May 1907 and 23 May 1907; APESP, Anuários estaísticos, balanços de receita e despeza, various years. 29. São Paulo, Leis, decretos, e resoluções, Lei 1038 of 19 December 1906, article 17 and Decreto 1533 of 28 November 1907, article 31. Note that Lei 1103 of 26 November 1907 revised portions of Lei 1038, but only in its provisions regarding municipal administration and elections. 30. MHF, box 50, vol. 339, intendant’s report for 3Q-4Q1896.

264

notes to pages 200–205

31. Ibid., intendant’s report for 3Q-4Q1896; box 50, vol. 340, intendant’s report for 1Q1896; box 61, vol. 421, mayor’s report for 1912; and box 63, vol. 429, mayor’s report for 1914. 32. MHF, box 50, vol. 341, intendant’s report for 4Q1902; AMC, intendant’s report for 4Q1894 and mayor’s report for 1912. The figure for Franca in 1902 and Campinas in 1912 was between 800 and 900 pupils. 33. APHRT, mayor’s report for 1911. 34. APHRT, mayor’s report for 1913. 35. Ibid. 36. APHRT, mayor’s report for 1916. 37. APHRP, PM-CM, mayor’s report for 1920, 50. 38. APHRC, Livro de Atas, ata of 25 January 1908. 39. Ibid., ata of 15 April 1918. 40. MHF, box 65, vol. 440, request for a new school, 15 January 1922. 41. Ibid., request for a new school, n/d April 1922. 42. Ibid., request for a subvention, 20 January 1922. 43. AMC, Câmara Municipal de Campinas, Leis, resoluções e mais actas pro­ mulgadas durante o ano de 1912, Lei 166. 44. There is no way to estimate spending on these services, as they were part and parcel of public works projects. Spending on public works, in per capita and percentage terms, is discussed in chapter 5. 45. APHRP, Manuscritos, pasta 3, Intendencia/ Representação/ Relatório de Atividades/1897. 46. APHRP, Manuscritos, pasta 2, Câmara/ Desenvolvimento urbano e rural/ Obras Públicas/ Propostas para calcamento da parte central da cidade/Abril de 1905. 47. APHRP, PM-CM, municipal council president’s annual report for 1901. This pronouncement apparently did not count the city’s horto botânico, or botanical garden, which was listed in the council president’s January 1899 address as one of his many accomplishments. APHRP, Manuscritos, pasta 1, Câmara/ Representações/Eleição/Ofício Expedido/Discurso do Presidente da Câmara empossando os novos veradores. . . . January 1899. 48. APHRP, PM-CM, municipal council president’s report for 1903, 4. 49. AMC, intendant’s report for 4Q1894 and 4Q1895. 50. By 1910, these neighborhoods were elevated to the status of subprefects, with budgets of their own to maintain the public works. 51. AMC, intendant’s report for 4Q1894 and 4Q1895. 52. AMC, mayor’s report for the three-year period 1908– 10. 53. AMC, mayor’s report for 1916. The purchase price of 100,000 milréis was paid half in cash and half in bonds. The council had the right to rent out the woods when it was to its advantage to do so. 54. In addition to tree planting, construction of walking paths, and decorative

notes to pages 205–216

265

paving, the 1911 municipal administration beautified its own municipal headquarters, embellishing the building’s façade and outfitting it with furniture and “decorative accessories” like rugs, curtains, and so on. AMC, mayor’s report for the three year period 1911– 13. 55. APHRP, PM-CM, mayor’s report for 1904, 4. 56. A Notícia, 1 January 1899. 57. APHRT, mayor’s report for 1906. 58. O Popular (Araraquara), 28 June 1908 59. APHRT, mayor’s report for 1916. The report noted that this building fever had cooled in 1916, possibly as a result of the economic slowdown of the war years. 60. The period 1898– 1902 represented the nadir of the recession, which included a massive bank crisis and a resulting credit crunch. Hanley, Native Capital, 91– 93. 61. Holloway, The Brazilian Coffee Valorization. 62. AMC, mayor’s report for the three-year period 1911– 13. 63. Ibid. 64. AMC, mayor’s report for 1922. 65. AMC, mayor’s report for 1926, 4. 66. MHF, box 63, vol. 431, mayor’s report for 1916. 67. AMC, mayor’s report for 1927, 6. 68. AMC, mayor’s report for 1930. 69. MHF, box 50, vol. 341, intendant’s report for 4Q1902. 70. APHRP, mayor’s report for 1924. 71. AMC, mayor’s report for 1924. 72. On the origins of Brazilian historical memorialization, see Kraay, Days of National Festivity. 73. MHF, box 66, vol. 441, mayor’s report for 1922. 74. AMC, mayor’s report for 1924, 16.

Chapter 8 1. Tiebout, “A Pure Theory of Local Expenditures”; Stiglitz, “The Theory of Local Public Goods Twenty-Five Years after Tiebout.” 2. It is worth reiterating that while there was a great disparity in economic wealth between these seven cases, all seven counted among the wealthiest in the state. In 1897, only 23 of the 129 municipalities brought in revenue over 100,000 nominal milréis. All seven municipalities in this study were in this group. São Paulo, Relatório do anno de 1897. 3. This number is lower than in the empire, but there are two main reasons for this: first, the large costs of urban infrastructure and public safety during the empire had declined in the republic in relative terms, and second, debt service from

266

notes to pages 218–228

the new ability to borrow ballooned in the republic, making the relative expenditures on other categories smaller. 4. Carvalho and Colistete, “Education Performance.”

Appendix 1. Lopes and Hanley, “Alice”; Hanley and Lopes, “Municipal Plenty.” 2. There were 117 municipalities in 1894, 172 in 1900, and 246 in 1926, according to the Anuários estatísticos. 3. Camargo, Crescimento, vols. 2 and 3, tables 4, 5, and 6; Relatório Book­ walter, 9. 4. Catão, “A New Wholesale Price Index”; Haddad, “Growth”; Leff, “A Technique.”

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n appendix containing additional source material can be accessed at press.uchicago.edu /sites /hanley.

Archives and Libraries Acervo Histórico da Assembleia Legislativa do Estado de São Paulo Arquivo Edgard Leuenroth da Universidade Estadual de Campinas Arquivo Histórico de São Carlos Arquivo Histórico Municipal “Capitão Hipólito Antônio Pinheiro,” Franca Arquivo Municipal de Amparo Arquivo Municipal de Campinas Arquivo Público do Estado de São Paulo Arquivo Público e Histórico de Ribeirão Preto Arquivo Público e Histórico do Município de Rio Claro Arquivo Público Histórico “Prof. Rodolpho Telarolli,” Araraquara Biblioteca da Câmara Municipal de Ribeirão Preto Centro de Memória, Universidade Estadual de Campinas Fundação Pró-Memória de São Carlos Museu Histórico de Franca “José Chiachiri”

Manuscript Collections Acervo Histórico da Assembleia Legislativa do Estado de São Paulo (ALESP): Coleção Império, Documentos, Municipal Collections. Collections for Amparo, Araraquara, Campinas, Franca, Ribeirão Preto, Rio Claro, and São Carlos. I gathered my documents on-site, but they have since been made available via the Internet. The municipal collections I consulted may be found via

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http://www.al.sp.gov.br /geral /busca /BuscaDocumentosImperio.jsp by typing the municipal name in the search box, “Localidade.” In the physcial archive, the documents are organized by caixa, or box, followed by a collection code and an alphanumeric document code. The two major collection codes for the sources used here were FALP (Fundo da Assembleia Legislativa Provincial) and ESP (for which I found no definition). Some early sources for the pre-1834 period came from FCGP (Fundo Conselho Geral da Província). In the online portal, each has been assigned a unique document code that appears in the left-hand column of the list of results. Both types of identifying codes are provided to allow for research in either the physical or the online archive. Arquivo Histórico Municipal “Capitão Hipólito Antônio Pinheiro,” Franca: “Atas da Câmara Municipal de Franca, 1834– 1837.” Arquivo Municipal de Amparo: Livro 294— “Livro de cópias de ofícios do município de Amparo 1913 à 1916”; balancetes 1858– 80; pastas com documentos referentes ao ano de 1873 a 1877; império receitas e despezas; câmara. Arquivo Público e Histórico do Município de Rio Claro: Livro de Atas da Câmara Municipal 1847– 1930. Arquivo Público e Histórico de Ribeirão Preto: Câmara Municipal. Pastas 1– 3. Pasta 1, 1886– 1901; pasta 2, 1836– 1915; pasta 3, 1886– 1915. Biblioteca da Câmara Municipal de Ribeirão Preto: Atas da Câmara Municipal, livros 1 e 2, 1874– 89; Livros de Registro das Leis. Museu Histórico de Franca “José Chiachiri”: Government documents. Each numbered caixa, or box, contains multiple folders separated by type and subject. These folders are labeled volumes and are consecutively numbered.

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Index Page numbers in italics refer to figures and tables. Adamo, Sam, 2, 3 Additional Act of 1834: foundational document, 11; and lack of municipal autonomy, 32, 53, 68; and municipal finance, 100– 101, 108; and provincial budgeting, 68; and provincial legislative authority, 27, 28; and provincial responsibilities, 28, 194; and standardization of imperial governance, 29 aguardente: definition, 76; importance to revenues, 79, 80– 82; taxes on, 77, 78, 87 Almeida, Rufino Augusto de (Ribeirão Preto), 145 Alston, Lee J., 234n13 animals: codes about, 11– 12, 33, 43– 44, 56, 60– 61, 168; control, 169– 70, 177; disposal, 168, 172, 177; illness, 45; licenses, 74, 77, 78, 80– 81; loose, 30, 33, 43, 60, 169, 208; municipal uses, 43, 77; taxes on transit, 71– 72 Asylo de Morpheticos (Campinas), 175 autonomy: and municipal finance, lack of, 122, 128, 131; and municipal governance, 23, 27, 31– 32, 33– 34, 53– 55, 56, 62– 63, 100, 122; of subnational governments in Brazil, 5, 12, 13– 14 Bastos, Aureliano Tavares, 195 beautification, 203– 8 Beck, Rosa, 166. See also yellow fever beggars, gypsies, and vagrants, regulation of, 50– 51, 61, 207

Belle Époque, 156, 167 Bieber, Judy, 14– 15, 236n27, 236n32 borrowing, 92, 127– 28, 130, 170– 71, 187, 212, 214– 15, 223– 24. See also loans, municipal Brazil, colonial background, 8– 10, 235n19 Brazil, tax structure, 16– 17, 19, 23, 65– 68, 88, 100 Brazilian Constitution of 1824, 11, 12, 23, 26, 29, 100, 194, 235n25 Brazilian Constitution of 1891, 23, 27, 54, 60, 62, 83, 84, 122 Brazilian Development Bank (BNDES), 4 bridge construction and repair, 10, 98, 109, 109, 113– 15, 119, 121, 137– 38, 142, 157 budget law: Brazilian, of 1832, 68; Brazilian, of 1835, 11, 23, 68; and government responsibilities, 28, 53; municipal, 158; São Paulo province, 28, 112, 118 budgets: municipal, procedures for, 28, 32, 101, 102– 4; provincial oversight of, 68, 101, 102– 4; for São Paulo Province, 71, 73 bureaucracy, 32, 54, 102– 4, 113, 162, 195 burials: of the indigent, 176; in posturas, 35, 37; practices, 47, 140, 152; space for, 142 business licenses: differing rates for, 95– 96, 156; importance to revenues, 79, 80– 82, 91; indirect nature of, 66– 67; relative value of, 50, 70; requirement for, 51– 52; in tax codes, 78; types of, 74. See also Industries and Professions tax

284 café com leite, 13 Camargo, José Francisco de, 227– 28, 237– 38n49 Capra, Frank, 1 carne verde/reses mortas tax, 76, 80– 81 Carvalho, José Murilo de, 14, 236n32 Carvalho, Manoel Francisco de (Ribeirão Preto), 146 Carvalho Filho, Irineu de, 233n6 case study selection, 17– 22, 238n51 cemetery: construction and upkeep, 119, 121, 140, 142, 152, 185, 188, 205, 207; employees, 31, 104, 140, 142 Cerqueira Cezar (José Alves de), 140 Chalhoub, Sidney, 15, 166, 255n75 church construction and repair, 109, 110– 12, 119, 121, 136– 37, 170 citizen complaints, 14, 114– 15, 145, 149, 151, 152, 154, 177– 78, 180, 183 citizen petitions and requests, 142, 148– 50, 152– 53, 161, 177, 182– 83, 201, 204 citizenship, 26, 193, 198 city inspector, 45– 46, 149, 168, 178. See also fiscal agent; municipal inspector city planner, 31, 41, 59, 155 coffee boom, effect of on municipalities, 18, 21, 81, 92– 94, 96, 128, 135, 143, 171, 179, 211– 14 coffee valorization of 1906, 126, 130, 178, 206 Colistete, Renato P., 233n6 Comissão de Higiene e de Saneamento (Campinas), 166 Committee on Municipal Council Accounts and Budgets, 32, 102, 103 commodities (coffee, sugar, aguardente) tax, 81– 82, 85, 86, 87 Common Good society (Rio Claro), 133– 34 common hand system, 10, 13, 136, 138, 141 Companhia Campineira Carris de Ferro, 142 Companhia Campineira de Águas e Esgotos, 180 Companhia Mac Hardy, 149, 177– 78, 251n47 Companhia Telephonica Bragantina, 154 Companhia Telephonica Brasileira, 154 Constatino (engineer, Campinas), 138 consumption, taxes on, 66, 69, 73, 76, 80, 83– 84, 90, 223 Correio de Campinas, O (newspaper), 142 Costa, Emília Viotti da, 17

index cost of living, rising, 151, 158, 192, 197 Cotegipe, Baron of, 88 curfew, regulation, 48, 50 currency. See milréis, definition and value cycle of cumulative disadvantage, 2– 3 debt, municipal, 118, 120, 122, 127– 28, 130, 143, 148, 157– 59, 162– 63, 170– 71, 181, 182, 183, 186– 87; permission to incur, 120; refinance of, 130, 158, 186– 87; and revenue shortfalls, 128, 130, 186– 87; service as percent of revenues, 84, 122, 128, 129, 130, 164, 171, 187– 88, 218, 219; and subventions, 118, 130. See also loans, municipal décima urbana tax, 66, 76, 90, 195. See also imposto predial deficits, 5, 84, 92, 106, 107, 126, 130– 31, 143, 157, 162, 175, 186– 87 direct taxes, Brazil’s rejection of, 16, 19, 66, 84, 90 disease: containment/eradication, 152, 166, 168, 173, 175– 76, 187, 190; and inequality, 3; knowledge of, 165; in municipal posturas, 46– 47; outbreaks, 142– 43, 152, 165– 67, 169, 170, 172, 175, 176– 77, 185, 188, 205; and poverty, 15, 165, 166– 67; prevention, 168– 70; and public health spending, 67, 106, 108, 169– 71, 175, 184– 86, 188; responsibility of slave owners and heads of household, 46. See also health and hygiene; smallpox; vaccination; yellow fever Dolhnikoff, Miriam, 236n30 Dom João, 10, 66 Dom Pedro I, 12 Dom Pedro II, 12 drinking and drunkenness, regulation, 11, 48, 61 drought, 181, 183 education: adult, 198; of immigrants, 196, 198; importance of investment in, 2– 3, 6, 68, 192, 212, 218; municipalization of state schools, 199– 201; municipal provision of, 55, 195– 203; municipal spending on, 96, 105, 199– 200, 202, 203, 215– 16, 217, 218, 219, 220– 21; and the poor, 198; in posturas, 56, 61– 62, 193; province/ state responsibility for, 28, 61, 71, 194,

index 196, 201– 2; state of São Paulo spending on, 202, 203; state-provided, insufficient, 195– 97 elections, 31, 54– 55, 160, 239n15, 243n101 Empresa Força e Luz de Ribeirão Preto, 145, 154 Empreza de Águas e Exgottos (Ribeirão Preto), 183 Empreza de Águas e Exgottos de Rio Claro, 56, 180, 183 entertainment: public gardens, 207– 8; regulation of, 12, 29, 48– 49; taxation of, 77, 78, 81, 85, 102 exit rates on provincial goods, 71, 72 expenditures. See municipal spending by category; municipal spending per capita export taxes, 66, 68– 69, 70, 82, 85, 91 feira livre (farmer’s market), 152 financial statements as historical sources, 12, 77, 101– 2, 225– 27 fines as municipal revenue, 9, 16, 38, 69, 74, 75, 85, 102, 211 firefighting, 36– 37, 55, 60 First Republic. See republic fiscal agent, 29– 31, 51, 55. See also city inspector; municipal inspector fiscal federalism, 7, 8, 18, 193, 195, 199, 211, 213 fiscal oversight of the municipality, 23, 28, 32, 101– 22 fiscal state, rise of, 6– 7, 8, 65– 67, 136, 193, 210, 224 fiscal structure of the state: Brazil, 16– 17, 67– 68, 87– 88, 99– 100, 117, 210– 11, 224; Prussia, 67, 88; United States, 67, 88 fiscal year, definitions, 227 Fischer, Brodwyn, 15 food safety/quality, 36, 44, 45– 46, 51– 52, 168, 174 foodstuffs, taxes on, 78, 80, 91, 223 food supply, 12, 28, 36, 43, 52, 151– 52, 158 Franco, Florentino Ferreira (Franca), 108 fresh meat/literary subsidy tax. See carne verde/reses mortas tax; literary subsidy tax gambling and games of chance: regulation, 49; and slaves, 50; in tax codes, 78

285 general/federal government revenues, 68, 69– 71, 83– 84 general government responsibilities, 28, 70 geographic zones of São Paulo, 21 governance structure, imperial, 28– 31 governance structure, republican, 53– 55 Graham, Richard, 14, 235n19, 236n32, 241n52, 243n95 Gusmão, Francisco da Silveira, 156 Hahner, June E., 15 Harris, Marvin, 14 health and hygiene: importance of investment in, 2– 3, 6, 174, 189– 90, 212; inspectors, 150, 167, 168, 173, 174– 75; insufficient funding for, 100, 108, 170, 179, 190; municipal responsibility for, 11– 12, 28– 29, 53, 97, 140, 168; municipal spending on, 105, 106, 144, 166, 167, 168– 70, 172– 73, 174, 175, 177, 180, 183, 184– 85, 184, 187– 88, 190, 215– 18, 217, 219, 220; and the poor, 167– 68; in posturas, 34, 35– 36, 44– 47, 56, 57, 59– 60, 168; State of São Paulo spending, 174, 175, 177, 259n42; subventions and loans for, 119, 170– 71. See also cemetery; food safety/quality; hospitals; water and sewer networks; water supply Hochman, Gilberto, 257n7 Holloway, Thomas, 15 Hospital Anna Cintra (Amparo), 182 Hospital dos Lázaros (Rio Claro), 176 Hospital dos Variolosos (Campinas), 176 hospitals, 29, 59, 148, 168– 69, 175; isolation, 46, 106, 169, 175– 77; municipal spending on, 169, 173, 175, 176– 77, 185; provincial subventions for, 118, 119. See also smallpox housing supply, 59– 60, 155– 56, 192, 197, 206 human development investment, 212– 13, 218– 20, 223 immigrant labor, 21– 22, 59, 93, 171, 174, 223 immigrant population growth, 59, 116 immigrants and education, 196, 197– 98, 201 import taxes: insufficiency of, 92; rates, 69; relative importance of, 70, 84, 97 imposto predial, 76, 81, 85, 86, 90, 215, 218, 221 income tax, absence of, 16, 66, 71

286 indirect taxes: differential effect on municipalities, 68, 76– 96, 135– 36, 135, 212, 214– 24, 214– 17; regressive nature of, 2, 17, 23, 67, 85, 87, 90– 92, 97, 211, 223; reliance on, 2, 6, 16– 17, 19, 23, 66, 69– 84, 78, 87– 88, 96, 211 Industries and Professions tax: exemption from, 151; importance to general revenues, 70; importance to municipal revenues, 86, 87, 122, 124, 126– 27, 215; on tax rolls, 154, 186; transfer from federal government to states and municipalities, 84, 85, 122, 211, 248n43. See also professional licenses ineptitude in public administration, 14– 16, 99– 100 inequality: as consequence of fiscal structure, 23– 24, 77, 93, 97, 210– 12, 222– 24; public finance policy and, 2– 5, 8, 222 inflation, 124, 151, 157– 58, 158, 162, 207, 220; price indices, 228; risk of, 84 infrastructure: importance of investment in, 2– 4, 6, 65, 134; municipal responsibility for, 13, 28, 97; in posturas, 39– 45; province/state funding of, 72, 118, 119; province/state responsibility for, 28, 71; subventions requests for, 109, 114– 15; types of projects, 138– 39, 143, 148, 203– 4. See also urban expansion and public services; works inheritance tax, 16, 66, 72, 73, 92, 97. See also income tax, absence of Instituto Biotherapico Brasileiro, 188 insufficiency of revenue, 16, 19, 67, 73– 74, 76, 92, 99, 101, 106, 126, 130, 142, 143, 156– 58, 170, 177, 185, 187, 190, 211; negative effect of on public investment, 8, 22, 99; requests for subventions as remedy, 108– 18, 109 intendant, 55, 160. See also mayor; prefeito interior taxes, 70, 70, 83, 92; regressive nature of, 97 international economic crisis of 1929, 13, 162 intervivos tax. See property transfer tax jail, funding, 109, 110– 13, 119, 120, 137, 139, 196. See also citizen petitions and requests; subventions; works jail time, regulations, 38, 43, 46, 48, 50, 52, 168

index Kraay, Hendrik, 236n32 Kuznesof, Elizabeth Anne, 39, 235n19, 237n46 Land Law of 1850, 92 Law of 1 October 1828, 167, 235n25, 239n9. See also Regulatory Law of 1828 Lazaretto de Fundão (Campinas), 176 legislative oversight of the municipality, 28, 32, 34, 62, 101– 2, 108– 22; emancipation from, 53– 54, 83 leisure, 203, 205, 207– 9 Leper Asylum (Campinas), 175 lepers, 46, 168 Levine, Robert M., 253n17 Lewin, Linda, 14 licenses and fees, 16, 75, 79, 86, 89, 214 Lieberman, Evan S., 237n42 lighting network: management, 145, 153– 54; municipal spending on, 140– 42, 145, 152– 54; personnel, 31; in posturas, 36; subvention requests for, 109, 117; tax, 76; technology, 140– 41, 152– 53, 205; and urban expansion, 143, 154, 161 literary subsidy tax, 72, 73, 76, 80, 91. See also carne verde/reses mortas tax loans, municipal, 53, 100, 127, 163, 205– 6; conditions, 128; importance, 89, 124; private creditors, 156; provincial authorization, 120– 22, 121, 123; relation to revenues, 127, 148, 211, 215, 223, 252– 53n62; servicing, 128; uses, 130, 157– 59, 170– 71, 181– 83, 185, 186– 87, 189, 206 local economy as revenue base, 23– 24, 67– 68, 77, 81, 87, 93, 96, 124, 135, 164, 211, 217, 223– 24 Love, Joseph, 85, 237n46, 248n40 Maia, João de Azevedo Carneiro, 108, 249n12 Manueline Ordinances, 9 Mariscal, Elisa, 233n6 maritime dispatches, tax on, 70 market, municipal, 12, 29, 52, 106, 139, 142, 145, 150– 51, 183, 193; loan authorization for, 121; in posturas, 57; and public health, 174, 179; rent from, 74; spending on, 139, 186; taxes on, 88, 186 market inspector, 31, 52, 104 Martínez-Fritscher, André, 233n6, 236n34, 263n23

index mayor, 29, 55, 160, 161, 163, 239n11. See also intendant; prefeito mayoral reports as historical sources, 17, 61, 127, 147, 153, 199 McCreery, David, 15 Meade, Teresa, 15, 167, 255n75 meia sisa, 72 Melo, Marcus André, 234n13 Metcalf, Alida, 17, 235n19 milréis, definition and value, 13, 238n52 Miranda, Francisco Bueno de (Campinas), 205 Moraes, José Jacyntho de (Rio Claro), 157 Moraes Barros, Prudente de, 54 Mueller, Bernardo, 234n13 Müller, Daniel Pedro, 237n46 municipal buildings: representative structures, 110– 13, 137; subvention requests, 109. See also church construction and repair; jail, funding municipal codes of ordinance. See posturas municipal council: colonial background, 8– 10; meetings, 30– 31, 102, 111, 113, 118, 136– 37, 142; responsibilities, 11– 12, 31– 33, 38– 55, 235n25. See also municipal mandate municipal employees: cemetery manager, 31, 140; cemetery watchman, 140; city planner, 31, 41, 59; fiscal, 29– 31, 55; gravedigger, 104, 140; intendant, 55; lighting inspector, 31; market inspector, 31, 52, 104; mayor, 29, 55; porteiro, 29– 30, 51; prefeito, 29; procurador, 29– 30, 51; road inspector, 31; sanitary inspector, 150; secretary, 29– 30, 51; slaughterhouse inspector, 31, 241n53; submayor, 29, 55, 161; veterinarian, 31, 104, 139; water and sewer network inspector, 31; weights and measures inspector, 31, 51; works inspector, 150 municipal employees, salaries, 104, 105, 106, 134, 144 municipal government responsibilities. See municipal mandate municipal inspector, 30, 50, 51– 52, 139, 140, 152. See also city inspector; fiscal agent municipalities: average population, 26, 39; number in Brazil, 26; number in São Paulo, 134, 238n3, 266n2

287 municipal mandate, 11– 12, 28– 29, 53– 56, 196 municipal needs reports, 108– 9 municipal organization laws. See Additional Act of 1834; Law of 1 October 1828; São Paulo State Decree 1533 of 1907; São Paulo State Law 16 of 1891; São Paulo State Law 1038 of 1906; São Paulo State Law 1103 of 1907 municipal revenue sources: broad patterns, 73– 87, 91– 96, 102; business licenses, 74, 79, 81– 82; fines, 74, 75, 85, 102; loans, 89; municipal property, 69, 74, 75, 79, 89, 100, 186; taxes, fees, and licenses, 16, 75, 79, 86, 89, 214. See also inequality; insufficiency of revenue municipal revenues per capita, 71, 85, 93– 96, 124, 126, 211, 213– 16, 214; from taxes, fees, and licenses, 93, 94, 124, 135; treatment of data, 225, 228– 29 municipal schools. See education municipal spending by category: education, 105, 144, 196, 199, 202, 202; health, 105, 106, 144, 166, 168– 73, 174– 77, 174, 180– 82, 185, 188; safety, 105, 106, 215; salaries, 104, 105, 106, 134, 144; works, 104, 105, 106, 135, 139– 41, 144, 146– 47, 147, 158 municipal spending per capita: differences between municipalities, 135– 36, 184, 199– 200, 212– 13, 215– 22, 215, 217; education, 199– 200, 202, 203, 216– 18; health, 184, 187, 216– 18; human development, 216, 216, 218, 219, 221; treatment of data, 225, 228– 29; works, 135– 36, 135, 141, 147, 215– 20, 224 Musacchio, Aldo, 233n6, 236n34, 263n23 Needell, Jeffrey D., 15, 167, 236n32, 255n75 Nogueira, Joaquim Texeira (Campinas), 138 noise regulation, 47– 48, 56 nominal vs. real values, 228 novo imposto, 76, 103 Nozoe, Nelson Hideiki, 237n46 ordinance codes. See posturas parks, gardens, and plazas: commemorative monuments in, 208; construction and beautification, 38, 145, 162, 168, 203– 8 Pasteur Institute of Franca, 188

index

288 patronage: appointments, 29– 30, 55, 104; and poor public administration, 14, 16, 17, 99, 110, 131 Pereira, Carlos, 234n13 Philippine Ordinances, 9, 239n20 population: Brazil, 26; case study municipalities and their zones, 20– 22, 39, 40, 41, 59, 92, 118, 124, 125, 155, 178, 197, 200– 201, 221– 22; São Paulo, 71; sources and interpolation, 227– 28; urban, 41 population growth: effect on municipal services, 12, 58– 61, 65, 94, 116, 134, 140– 41, 149, 152, 155, 162, 171, 178– 79, 181, 196– 98, 200– 201, 206, 220– 22; rates, 125 porteiro, 29– 30, 51 posturas: definition, 27; drafting procedures, 32, 239– 40n20; in the empire, 32– 52; in the republic, 56– 62; structure and organization, 34– 38, 35– 37, 56– 58, 57 posturas regarding: animals, 43– 44, 56, 60– 61; beggars, gypsies, vagrants, 50– 51, 61; burials, 47; business licenses, 51; curfew, 48; education, 61– 62, 193; entertainment, 48– 49, 61; firefighting, 60; food safety/ security, 45, 51– 52; gambling, 49; isolation hospitals, 46; noise, 47– 48; prostitution, 61; public drunkenness, 48, 61; public health, 46; slaughterhouse, 45– 46; slaves, 46, 49– 50, 51; smallpox vaccination, 46; trash, 45; urbanization, 39, 41– 43, 58– 60; vehicles, 44, 60; water and sewer, 56; water fountains, 45; water quality, 44– 45; weapons, 47, 60; weights and measures, 51 prefeito, 29. See also intendant; mayor prejudice in public administration, 14– 16 prisoners, 106, 111, 118, 119 private contractors of public goods, 55, 56, 108, 133, 138– 39, 142– 43, 145– 48, 150– 51, 154, 160, 162, 177– 83, 186, 204 procurador, 29– 30, 51, 102 professional licenses, 57, 66, 70, 74, 77, 78, 80– 81. See also Industries and Professions tax property tax: absence of, 66– 67; potential of, 92, 97; proposal for, 88; viability of, 73, 90. See also décima urbana tax; imposto predial property transfer tax, 16, 71, 85, 90 property values, 7, 206, 213, 218– 22, 219, 221 prostitution, regulation, 61

provincial/state government responsibilities, 28, 71 provincial/state government revenues, 68– 69, 71– 73, 72, 84– 85, 88, 91 public administration, professionalization of, 160– 62 public education. See education public education codes: Ribeirão Preto, 192– 93; Rio Claro, 61; State of São Paulo, 194, 196, 199– 200, 201 public health. See health and hygiene public health codes: Campinas, 174; State of São Paulo, 155, 166, 168, 174 public safety. See safety/security public works. See works quarantine, 46, 168, 173 rabies, 188 railways: Central do Brazil, 83; Dom Pedro II, 70, 83; Mogiana, 21, 146, 172; Paulista, 21 rain damage, 114, 117, 126, 139, 148– 49, 163, 180– 82 Red Cross (Ribeirão Preto), 177 Regulatory Law of 1828, 11, 23, 29, 34, 51, 100, 108. See also Law of 1 October 1828 republic: declaration, 12– 13; and municipal autonomy, 27, 53– 54; and public finance, 13, 16– 17, 23 Republican Party, 12, 15, 18 revenue, municipal. See municipal revenue sources; municipal revenues per capita Revolta contra Vacina of 1904, 167 Revolution of 1930, 13, 19, 27, 55, 62, 63, 163 Ribeirão Preto Ordinary Law of 1891, 145 Rio Negro/Customs/Transport tax, 71, 72 road construction and repair, 10, 35– 37, 57, 71– 72, 109, 113– 15, 119, 147– 50, 159, 185 Rodden, Jonathan, 234n13 Rodrigues Alves, Francisco de Paula, 166 Rousseff, Dilma, 6 safety/security: fire, 36– 37, 60; importance of investment in, 2– 3, 6; inspectors, 150; insufficient funding for, 100, 108; municipal responsibility for, 28– 29, 97; municipal spending on, 96, 105, 106, 215– 16; in posturas, 35– 36, 44, 47, 56, 57, 60; subventions for, 117, 119, 120

index Saint-Hilaire, Auguste de, 64, 67 salaries. See municipal employees; municipal spending by category Santa Casa de Misericórdia (Araraquara), 176 Santa Casa de Misericórdia (Rio Claro), 176 Santos, José Gonçalves dos (Ribeirão Preto), 136 São Paulo Province 1854 public instruction code, 194 São Paulo Province Law 18 of 1835, 29 São Paulo State 1894 public health code, 155, 167, 174 São Paulo State Constitution of 1891, 54– 55, 122, 202 São Paulo State Decree 1533 of 1907, 252n4, 263n29 São Paulo State Law 16 of 1891, 160, 196, 200 São Paulo State Law 88 of 1892, 196 São Paulo State Law 1038 of 1906, 160– 61 São Paulo State Law 1103 of 1907, 161 Schumpeter, Joseph, 2, 8, 222 slaughterhouse: disease, 152; importance to revenues, 79, 81; loans for, 120, 121, 130; management of, 145, 150– 51; municipal spending on, 138– 39; personnel, 31, 104; in posturas, 35– 37, 45– 46, 57; taxes on, 66, 78, 88, 186, 247n26; and urban expansion, 161, 183 slavery, Indian, 10 slaves: exclusion of from schools, 194; gambling by, 33; illness and, 46; labor, 8– 9, 21; proportion of the population, 12, 22, 26; propriety, 47, 48, 49– 50, 51; punishment of, 50; selling by, 51; supervision of, 49– 50; taxes on the transfer of, 16; tax on sale of, 72, 91 slave trade, 72 smallpox: hospital, 142, 176; outbreaks, 142– 43, 169– 70, 176, 184– 85; spending on, 143, 169– 70, 184– 85; vaccination, 46, 142, 167 social overhead capital, 6, 11, 16, 65, 67, 71, 73, 84, 92, 131, 193, 210, 223– 24 Sokoloff, Kenneth L., 233n6 Spanish Influenza of 1918, 176– 77, 188 spending, municipal. See municipal spending by category; municipal spending per capita

289 stamp tax, 70, 83 Stepan, Nancy, 257n7 street cleaning, 169– 70, 177– 79, 186 street construction and repair: costliness, 117, 126, 158, 182; management, 145, 147– 50, 158– 59; municipal responsibility, 11, 29, 138; subventions and loans, 109, 115, 121, 142 subventions: budgeted, 119, 192, 196– 98; examples of, 109; requests, 98– 100, 108– 20, 137, 142, 146, 170, 183, 188– 89, 192, 197– 98. See also loans, municipal: provincial authorization Summerhill, William R., 248n51 Tapajós, Manoel (Ribeirão Preto), 145 tax codes, municipal, 53, 74, 77– 80, 87– 88, 95– 96 tax collection: difficulty of, 90, 156– 57, 162; reform of, 158– 59, 161, 186, 188; viability of, 92 taxes, fees, and fines, 13, 16, 30– 31, 124 telephone service, 154, 162 Tiebout, Charles, 7, 235n17 Tiebout hypothesis/model, 7, 212– 13, 218– 22 Toze, Rodolpho (Franca), 151 trash: municipal spending on, 169– 70; regulation, 45, 56, 168; removal, 177– 79 tree planting, 12, 152, 204– 7 Uchoa, Flávio de Mendonça (Ribeirão Preto), 145, 148, 204 urban expansion and public services, 138, 140, 152– 53, 155– 56, 159– 61, 162, 178– 80, 182– 83, 188, 204 urbanization: codes of, 39– 47, 56, 57, 58– 60; rate of, 26, 41, 155, 180 urban renewal, 155, 172 vaccination, 12, 46, 167, 174, 188, 259n42 Vaccine Revolt of 1904, 167 vagrancy, 61, 207 Vargas, Getúlio, 5, 13, 19, 63 vehicle regulation and taxation, 36– 37, 44, 46, 57, 58, 60– 61, 74, 77, 78, 80– 81, 87– 88 Viarengo, Martina, 233n6, 236n34, 263n23 wage data, 242n70 Washington Luís (Pereira de Sousa), 63

index

290 water and sewer networks: importance to revenues, 85, 86, 182; loans for, 170– 71, 181– 82; management of, 180– 82; municipal responsibility for, 28– 29; municipal spending on, 180, 190; personnel, 31; in posturas, 56– 58, 57; as public works projects, 138, 145; and urban expansion, 161– 62, 178, 180– 83 water supply: importance to revenues, 76, 81; loans authorizations for, 120, 121; in posturas, 37, 44– 45; subventions for, 109, 112, 115– 16, 118, 142, 170 weapons, regulation, 47, 60 Wegenast, Tim, 233n6 weights and measures: inspector, 31, 51; required use of, 74; in tax codes, 78 Woodard, James P., 14, 15, 236n33 works: borrowing to pay for, 127– 28, 130; department of public works, 106, 143, 155, 161, 207; general government responsibility, 28; importance to municipal economy, 134, 163; insufficient funding, 17, 100, 108, 156– 57, 185– 86;

municipal spending, 104– 6, 105, 135, 135, 137– 38, 140– 41, 143, 144, 147– 48, 147, 215, 217, 218, 219– 22; in posturas, 36– 37; province/state responsibility, 28; subvention and loan authorizations, 119, 121, 146; subvention requests, 109, 114– 18; taxes earmarked, 71– 72, 76; transition from common hand system, 136; types of projects, 106, 134, 138– 40, 189– 90, 203; urban expansion, 141, 152– 56, 206. See also citizen complaints; citizen petitions and requests; infrastructure; loans, municipal; street construction and repair; urban expansion and public services; water and sewer networks World War I: effect on revenues, 83, 176; and food scarcity, 151 yellow fever, 15, 165– 67, 172– 73, 175, 185– 86. See also disease Zenha, Edmundo, 9