It's easy to describe the Commerce Square, also known as Palace Square (Terreiro do Paço), in just one word: WOW! This is one of the most majestic squares of Lisbon and was once the main maritime entrance to Lisbon. You can still see the old marble steps leading up to Commerce Square from the River Tagus. The name Palace Square is clearly a reference to the Palace that was located here for 400 years, until the 1755 earthquake that almost completely destroyed it.
On the north side, the square is centred by an impressive 19th-century triumphal arch that leads to Rua Augusta, one of the main pedestrian shopping areas in downtown Lisbon. The arch is decorated with statues of historical personalities, like Vasco da Gama (Portuguese sailor) and Marquês do Pombal (responsible for the reconstruction of Lisbon after the earthquake).
The spacious arcaded buildings extended around three sides of the square are now occupied by government administrative offices and some restaurants.
Talking about restaurants, this is also the place where Lisbon's oldest café stands: "Martinho da Arcada" opened its doors with oil burning lamps, it was later given gas illumination and then much later gained a different glow with the installation of electricity. "Martinho da Arcada" saw the big revolutions of the last two centuries and took in clients like Bocage, Fernando Pessoa and Amália.
At the center of the Commerce Square, once used has a car-park and now given back to the Lisboetas (people from Lisbon), stands the equestrian statue of King José I, King of Portugal during the earthquake in 1755. The dark bronze horse, depicted trampling on serpents, is often called "Black Horse Square" by the English. The locals do not particularly care about the horse... but who is sitting on it!