Portuguese Brazilians had reconquered New Holland (Dutch Brazil), and with the end of the First Anglo-Dutch War in May 1654 the Dutch Republic had begun, to demand its return.
Portugal had acceded to the demand under threat of the Dutch fleet.
The Grand Pensionary of Holland, Johan de Witt, in close corporation with his uncle Cornelis de Graeff, didn't agree with these strong-arm tactics because he thought that commerce was more important than the possession of territories.
Therefore, a peace treaty is signed on August 6, 1661, at The Hague whereby New Holland is sold to Portugal for the equivalent of sixty-three tons of gold; the Dutch thus formally recognize Portuguese sovereignty over Recife, formerly known as Mauritsstad.
Under the threat of invasions of Lisbon and northeastern Brazil, Portugal is to pay an annual installment for four decades.
In addition, Portugal cedes Ceylon and the Moluccas (Spice Islands) to the Dutch Republic and makes certain concessions related to the sugar trade.