It is generally agreed that a couple of years after Cabral's discovery of Brazil in 1500, the Portuguese Crown leased out the land to a trading consortium for economic exploitation and further exploration. But whether the Crown granted one or two leases, and when the second lease [if there was one] began and for how long it ran, have long been matters of confusion and disagreement.

Evidence of the first lease is clear. A letter of Rondonelli written from Seville and dated the third of October, 1502, speaks of a three-year lease on the following terms: the consortium would have to send six ships to Brazil and “discover” 300 leagues of coast each year and would be obligated to build a fort/factory there. During the first year the lease-holders would pay the Crown nothing, in the second year they would pay a sixth [of the profits?], and in the third year a fourth.