Although Cedros was considered a "breadbasket" of the region, it had an important place in the economy of the island for the abundance of the Azorean cedar (cedros-do-mato) because its lumber was used in the construction of ships for fishing, for the early homes and the implements used in agriculture.

The Captain-major at the time, D. Martinho de Mascarenhas (sixth Count of Santa Cruz) also supported the claims of the citizens, and offered to build a chapel and to donate a statue of Senhora do Pilar.

Father Domingos Furtado de Mendonça was its first parish priest, he had an annual pay of about 24$000 réis, two parts in wheat and one in cash, of which he paid a portion to the Count of Sant Cruz.

Inscriptions on two rocks found during demolition on the church in September 1945 confirm these facts, as well as a shield of D. Martinho de Mascarenhas and cross etched with 1693 and 1719, respectively.

The church was reconstructed in 1822, but by 1868 a report by the Civil Governor of the District of Horta, António José Vieira Santa Rita, considered the building to be in a bad state of conservation.

Ironically, the community had a distinction for being the population with the lowest level of illiteracy on the island of Flores: a fact that was attributed to professor Fraga (their local school teacher), who died in 1929.

Also, due to a micro-climate in the area of Alagoa, the parish enjoyed a period of fruit cultivation (something rare to the rest of the island), where oblong apples (similar to pears in shape) were grown.