Excerpts from a paper by Dr. Teresa Albuquerque of the Heras 
St. Xavier's College, Bombay, dated  September, 1990.  We are grateful
to Prof. Albuquerque.
          The treaty was a product of colonialism. One nation was in the fading 
of its glory, the other at its prime.  Goa was merely a pawn in the game.
          In 1872, the Bombay Government terminated the Mughul firman under 
Portuguese goods were imported into Surat at a special duty of 2.5 percent. 
reacted by claiming compensation, in London.
           Negotiations were protracted.  Portugal demanded an extension of the 
railway line in India to the harbour of Marmagoa. The British were not eager. 
was their first priority, and they contemplated a rail link to Karwar. They 
gave in  
ultimately, as they desired a common tariff with Portugal.
            When Portugal offered to stand financial security for any firm that 
would undertake 
the extension, England relented.    Consequently, the the Anglo-Portuguese 
treaty was 
signed in December 1878 in Lisbon.
            The agreement called for the construction of a railway line from 
Hubli to Marmagoa,
abolition of duties at frontiers, uniformity of duties at maritime ports and 
and on spirits, and 
the control of salt and opium output in Goa.  The British agreed to pay the 
Government the sum of four lakhs annually for twelve years, to guarantee the 
British firm's
railway project.  The British monopoly of salt was now extended.
            It did seem initially that the treaty was bearing excellent 
results.  The price of various 
items of consumption came down. The revenue of Portuguese India more than 
from 1864 t0 1888.  In 1861, a contract with the Portuguese Guaranteed Railway 
was sealed,
and development of Marmagoa harbour was also undertaken.
          Treaty provisions handed control of the salt manufacture and 
distribution in Goa to 
the British in return for an annual payment of Rs. 400,000.  An annual 
allowance of 14 lbs.
of salt was made available to each subject at a low rate.  This quota was 
considered insufficient.
The high-handed manner of supervision of salt-pan operations was also resented. 
When the 
Bombay Salt Department raised the duty in 1888, heavy smuggling was conducted 
across the ghats.
         The tax on toddy-coconut trees was haiked from Rs.4 to Rs.6 to 
streamline rates with
India. This was correctly anticipated as a measure that would extinguish one of 
the few 
industries in Goa. In 1981, there was a general strike of toddy-drawers in 
protest against the tax.
         In January 1892, the treaty term was completed and it was not renewed. 
Goa soon reverted 
to its former condition.  To keep is head above water, the government went on a 
rash-course of 
over taxation. Heavy custom tariffs paid no heed to protecting local industry.
         The jaggery industry almost came to a standstill. Many changed to 
distillation of liquor.
Conducted illicitly, this proved very lucrative. Excise duty on palm liquor was 
not enforced.
Yet excise duty on several articles of consumption were raised nine times 
higher. Britain also
stopped import of salt from Goa.
         A freight-war saw rates slashed by the mighty GIP and Southern Maratha 
The tiny railroad in Goa could nit compete and in 1902 it was taken over by the 
Madras Southern.
Cargo was diverted away from Marmagoa to Karwar, reaching 78% by 1926.  
proclaimed: Goa is subject to a two-fold Portuguese and British imperial 
        With the economy coming to a grinding halt, many migrated to British 
India.  A trickle 
around 1828, it gradually increased and in 1874 the number who left was 5900.  
In 1888, the 
mass movement gathered momentum, and almost a sixth of the population 
emigrated. An 
estimate taken in 1926 recorded 120,000 scattered across the world- 40,000 of 
them in Bombay.
         Ironically, it was their earnings, however meager, which saved their 
financial situation in
Goa from becoming more chaotic. In 1927 the remittances of emigrants in British 
India were
said to have amounted to over Rs. 1,25,00,000/- per year.  K. N. Menon 
pronounced: "In 
Bombay city alone there are 10,000 Goan domestics, and more than 3000 tailors, 
while music 
shops and bands are their monopoly. Their are thousands of Goans in clerical 
posts in industrial
towns in India, and a very large number of Goans occupying high positions as 
doctors, lawyers
and professors.  Their remittances to Goa estimated at fifty million rupees a 
year enable the 
middle class keep up a reasonable standard of living, provide money for 
education, and make good
the trade deficit.
        The Portuguese Government inflicted an emigration tax on those who 
tried to leave for
a better life.  This amounted to Rs. 50,000 annually.  Emigrants purchased Goa 
charity lottery
tickets in Bombay worth twelve million rupees a year.
        The less fertile district of Bardez witnessed the highest number of 
emigrants. This feature
became evident in the desolation of fallow fields in most villages of the 
province. Ultimately,
lt was the bureaucratic element that remained behind, in line with the 
Government. The working 
class was lulled into complacent subservience and utter lack of initiative.  
This moral decadence
of a people was the grave fall-out of the Anglo-Portuguese Treaty of 1878.

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