Saturday, April 5, 2014

Viscount de Mauá: Story of Success and Tragedy

Irineu Evangelista de Sousa, Viscount of Mauá
During the 19th century, Brazil had a rising economy. It had an export led economy with agriculture as the most dominant sector. The agricultural economy of Brazil brought huge changes to the country. Because of export crops, such as coffee, infrastructure developed alongside with progress in the society. Many Brazilians began to profit from the growth of the Brazilian economy. Among these of Brazilian entrepreneurs was the rich, but tragic man, the Viscount of Mauá, Irineu Evangelista de Sousa.

De Sousa was of humble beginnings. He was born on December 28, 1813 into a family owning a small land. At the age of 13, he began to work for a living. He ended up into the services of a British importer in the capital of Brazil, Rio de Janeiro. After working for seven years, he was eventually became a partner for a mining business in the Morro Velho Mines in the province of Minas Gerais. At the age of 24, De Sousa became the manager of the British firm. In 1840, he also became a partner with the British bank in Manchester.

With connections with the British, de Sousa was able to travel to Great Britain during the peak of its industrial revolution. During his trip, he saw the rising industrial might of the Kingdom. He saw its iron, steel, and textile industries. He was able to see, as well, the fledgling railroad industry. What he saw in Britain created a lasting impact to the ambitious de Sousa.

As he returned to Brazil, he was a man inspired to do the same progress in Britain to his own country. And so in 1844, he established his first industrial enterprise. He constructed an iron foundry producing pipes. His decision was through his inspiration and also, government support. In the same year, the government enacted the tariff law that demands a tariff of 30 – 60% to imported goods. The law, obviously gives support for the rise of domestic producers, and one of them was de Sousa. De Sousa’s business also prospered when it secured a contract from the government to supply pipes during one of its draining projects. After six years of work, de Sousa began to employ to about 300 workers.

Later on, de Sousa entered to new opportunities. When kerosene became the number provider of light in the Americas, de Sousa entered to the gas industry. He was able to supply Rio de Janeiro with its gas needs, especially, when in 1854, he installed the first gas-fuelled streetlights. He then began also to produce gas-powered lamps to profit in both street lighting and household lighting.

The increasing agricultural activity in the interior of Brazil required more sophisticated transportation. De Sousa purchased a shipyard and expanded it and was able to produce small 72 modern ship in a month. With production of ships in his hands, he entered the shipping business. He catered river shipping in the Amazon River and his home province of Rio Grande do Sul. Because of his new businesses, employees of de Sousa doubled. For land transport, he began as well to invest in railroads. In 1854, he opened the Mauá Line, a 14km line in the rich coffee regions of Sao Paulo region.

In 1852, he entered the financial world. He established the Bank of Viscount of Mauá, MacGregor & Cia. The Bank had several branches outside Brazil. It had banks in Uruguay, Argentina, as well, as London and the United States.

For his achievement, de Sousa received many awards and titles. But it was in 1874 that de Sousa was given the title of Viscount of Mauá.

The rise of the Viscount of Mauá was rapid. However, during his later years, his life became a tragedy. Major blunders in business led to everything he worked on to disappear. In his quest to expand his railway enterprise, he gave a huge advance payment to his contractor. Unfortunately, his contractor became bankrupt and all of his payment became a waste. Several banking crisis in 1864 and 1875 also hit the country that further drained the Viscount’s assets.

In 1889, Irineu Evangelista de Sousa, Viscount of Mauá, died a broken man with most of he worked for gone.
Bethell, L. Brazil: Empire and Republic, 1822 – 1930. Cambridge: Cambridge University Press, 1989. 

Szlaifer, H. Economic Nationalism and Globalization: Lesson from Latin America and Central Europe. The Netherlands: Koninklijke Brill NV, 2012.

No comments:

Post a Comment