Unification of the currency

Although Madeira was Portuguese territory, the gold and silver coin that once circulated here was foreign. Portuguese money was unknown to the great majority of people, and small traders often refused to accept it when someone from the mainland tried to use it to make a payment.

To put an end to a state of affairs that was not only humiliating for the country but also harmful to the population, Councillor (conselheiro, honorary title of the royal council) Serpa Pimentel, Minister of Finance, proposed in parliament the unification of Madeira’s monetary system with that of Portugal. His proposal, presented in 1875, became law on 2 May 1879. This followed a petition addressed to the Government by the Funchal Commercial Association (Associação Comercial do Funchal), and speeches on the subject by Dr Agostinho de Orneias e Vasconcelos in the House of Peers and Dr Manuel José Vieira in the Chamber of Deputies, both of whom worked to secure the unification.

The speech delivered by the latter at the sitting of the Chamber of Deputies on 7 April 1879 became famous, and it drew the following words from the Minister of Finance: ‘I congratulate the Chamber on the speech it has just heard, and Madeira on the manner in which its interests are defended in this house’.

Some questioned the advantages of unifying Madeira’s monetary system with that of Portugal, but the fact is that unification put an end to many abuses. At the same time it averted the exchange crisis, whose consequences threatened to grow ever more serious for consumption in the district.

Many speculators made fortunes by buying, at a very low price on the English markets, the foreign coin that circulated on the island. As a result of this business, sometimes carried on on a large scale, commerce had latterly been unable to obtain bills of exchange at less than 42%, whereas in normal circumstances they were obtained at between 33 and 34%.

By the law of 2 May 1879, as has been said, the legal currency in the district of Funchal became the same as that of mainland Portugal. All payments made under contracts or agreements predating the enforcement of that law were to be made in strong currency (moeda forte, i.e. mainland coinage) with a discount of 1/16.

The period allowed for exchanging the coinage was two months, and the government was authorised to have silver coins of 500, 200, 100 and 50 réis (old Portuguese money of account; 1$000 = 1,000 réis, 1:000$000 = one conto = 1,000,000 réis) minted, up to a total of 500,000,000 réis, for the needs of the district of Funchal.

Portuguese copper coin was already circulating in Madeira at the time of the currency unification law, alongside the so-called pecunia madeirensis (copper coins minted specially for Madeira), represented by coins of 20, 10 and 5 réis. In the issues of 1842, 1850 and 1852 these values appear between two vine branches, and not between a cana (land measure, c. 30 m²) and a vine branch, as was stated on page 360 of volume II through a slip that is hard to explain. See Currency.