The Treaty of The Hague (also known as the Treaty of Den Haag) was signed on 6 August 1661[1] between representatives of the Dutch Republic and Portugal. Based on the terms of the treaty, the Dutch Republic recognized Portuguese sovereignty over New Holland (Dutch Brazil) in exchange for an indemnity of 4 million reis, conversion from 2 million caroli guilders, over the span of 16 years.[2]
In 1648-49 the Luso-Brazilians defeated the Dutch in the first and second battles of Guararapes, and gradually eliminated the Dutch presence in their colonies of Brazil and Angola. In addition, the wars between England and the Dutch Republic were weakening Dutch power everywhere. In January 1654 the Dutch surrendered and signed the Treaty of Taborda, but only as a provisory pact (truce).
With the end of the First Anglo-Dutch War, the Dutch Republic began, in May 1654, to demand New Holland (Dutch Brazil) back. The Grand Pensionary of Holland Johan de Witt did not agree with these strong-arm tactics because he thought that commerce was more important than the possession of territories. Therefore, a peace treaty was signed on 6 August 1661 at The Hague whereby New Holland was sold to Portugal for the equivalent of 63 tonnes of gold (roughly $4 billion in 2023). The treaty later led to a deal over Dutch Java and Portugal's East Timor.[citation needed] The Dutch promised not to enter or claim Timor for the Treaty of The Hague stated none of these powers would declare war on each other or claim or enter their territory or colonies.