Among the solutions devised by early modern Western European states to engage with the private sector in the governance of their overseas empires, the adjudication of revenue farms and colonial monopolies was often dismissed by historians on the grounds of being coercive, inefficient, and risk-exempt for the contractors. In reality, however, the threat of financial hardship and insolvency was very real, and not infrequently led to contractual removal, the seizure of collateralized assets, and even the imprisonment of the concessionaires.
This article approaches the neglected topic of failure in big business in early seventeenth-century Portugal, an overlooked case of a contractor state that relied extensively on the adjudication of government contracts to finance and rule its overseas empire. By looking into the downward trajectories of two tax-farmers and the collapse of their contractual dealings, light will be shed on how the Crown and private entrepreneurs reacted to the repercussions of failure in these early modern public-private partnerships. It will also be shown how the road leading to termination was very much shaped by the political relationships between the Crown and its contractors and can only be understood in the context of wider relationships of brokerage, credit, and service between the two.