These new posts and offices were filled throughout by European officials, and the expenses of the Court itself, added to them, made up a burden which the new trade and increased population failed to compensate. In order to meet the cost of these many new appointments the Government had imposed new taxes and duties. Tobacco, cotton, sugar, hides, and other exports, were taxed; and 10 per cent. was levied on house rent, on the sale of real property, and harbour dues.
All this, however, was insufficient, and as a last resort the expedient of tampering with the currency was tried. Dollars were sent into circulation at 20 per cent. above their commercial value. Money was borrowed from the bank, which was in close connection with the mint, and taxes were mortgaged in advance; while even the royal regalia was pledged as security. Notes were issued far beyond the amount of cash available for redemption, and a few years later the bank, its affairs brought to irremediable confusion, stopped payment.
While these things were occurring, public discontent was growing; and in order to divert the attention of the populace from internal troubles, a war was determined on. French Guiana was near, and provided an admirable object for the purpose. In 1809, when France was fully engaged in European struggles, Guiana was attacked and captured with little trouble. The colony capitulated, and remained Brazilian for six years, when the Treaty of Vienna restored it to French rule.
The conquest was of great indirect value to Brazil, in that it led to the introduction and free cultivation of agricultural products which had either been non-existent in Brazil up to that time, or extirpated by the crippling policy which Portugal pursued towards her colonies. Cinnamon, for instance, had hitherto been destroyed wherever found in Brazil, being regarded as a monopoly of the East Indies.
The easy victory over Guiana induced the Regent to make attacks on the Spanish colonies to the south and west of Brazil. Here, however willing the colonists were to shake off their subjection to Spain, they by no means desired to become subject to Brazil. It was just at this period that the War of Independence was raging, and the Spanish colonies were forming themselves into republics. João, fearing republicanism more than he hated Spain, aided Elio, the Spanish Governor of the Plate districts, with money and men in his attacks on the insurgents.
Elio was defeated, and the new Republicans made a hostile entry into Rio Grande and São Paolo. The Regent, fearing the result of this incursion, sent 5,000 Portuguese troops with a contingent of Brazilians to drive the enemy over the southern frontier. In this the Brazilian force was entirely successful, and the evacuation of Montevideo and occupation of Misiones were followed by the chasing of the Uruguayan patriot Artigas across the Uruguay River.
In spite of popular and successful war, the Brazilians refused to be entirely contented, and João had some reason to fear their discontent, since Brazilian money supported the Government and Court, and ruin would necessarily follow the withdrawal of this. In order to meet all objections João determined to make Brazil his kingdom.