Urban development of the banks of the Tagus river (the Ribeira) was given a definitive impulse in the early 16th century, when King Manuel I built a new royal residence – the Ribeira Palace – by the river, outside the city walls. The area was further developed with the building of a port, ship building facilities (the Ribeira das Naus), the Casa da Índia and other administrative buildings that regulated the commerce between Portugal and other parts ofEurope and its colonies in Africa, Asia and America.
On 1 November 1755, during the reign of King Dom José I, a great earthquake followed by a tsunami and fire destroyed most of Lisbon, including the Ribeira Palace and other buildings by the river. José I’s Prime Minister, the Marquis of Pombal, coordinated a massive rebuilding effort of Portuguese architect Eugénio dos Santos. He designed a large, rectangular square in the shape of a “U”, open towards the Tagus. The buildings have galleries on their groundfloors, and the arms of the “U” end in two large towers, reminiscent of the monumental tower of the destroyed Ribeira Palace, still vivid in the architectonic memory of the city. His plan was realised almost completely, although decorative details were changed and the east tower of the square and the Augusta Street Arch were only finished in the 19th century.
The square was named Praça do Comércio, the Square of Commerce, to indicate its new function in the economy of Lisbon. The symmetrical buildings of the square were filled with government bureaus that regulated customs and port activities. The main piece of the ensemble was the equestrian statue of King José I, inaugurated in 1775 in the centre of the square. This bronze statue, the first monumental statue dedicated to a King in Lisbon, was designed by Joaquim Machado de Castro, Portugal’s foremost sculptor of the time.
Opening towards the Augusta Street, which links the square with the other traditional Lisbon square, the Rossio, the original project by Eugénio dos Santos planned a triumphal arch, only realised in 1875. This arch, usually called the Arco da Rua Augusta, was designed by Veríssimo da Costa. It has a clock and statues of the Glory, Ingenuity and Valour (by the French sculptor Camels) and those ofViriatus, Nuno Álvares Pereira, Vasco da Gama and, of course, the Marquis of Pombal.
On 1 February 1908, the square was the scene of the assassination of Carlos I, the penultimate King of Portugal. On their way back from the palace of Vila Viçosa to the royal palace in Lisbon, the carriage with Carlos I and his family passed through the Terreiro do Paço. While crossing the square, shots were fired from the crowd by at least two men: Alfredo Luís da Costa and Manuel Buiça. The king died immediately, his heir Luís Filipe was mortally wounded, and Prince Manuel was hit in the arm. The assassins were shot on the spot by members of the bodyguard and later recognized as members of the Republican Party – which two years later overthrew the Portuguese monarchy.
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