To these debts there should be added the Western Minas loan of 3,606,0002.

To meet the deficit existing at the end of 1897 an internal loan of 60,000,000 milreis 6 per cent. bonds redeemable in 10 years and a 5 per cent. gold loan of 2,000,000l. redeemable in 2 years by half-yearly instalments were issued.

An arrangement has since been concluded by which the interest on the Foreign Loans and the Internal Gold Loan of 1879 is paid from July 1, 1898, to June 30, 1901, in bonds of a new Funding Loan bearing interest at the rate of 5 per cent., limited in amount to 10,000,000l., and secured on the Custom House receipts. The interest guaranteed by the Government on the capital of 17 railways, amounting to about 1,130,000l., is included in this arrangement. As the funding loan is issued, paper money to a corresponding amount (exchange calculated at 188) must be deposited by the Government in stated banks at Rio de Janeiro. In 1897 bonds to the value of 564,4001. were redeemed, but the sinking fund and redemption of Foreign Bonds will be suspended for 13 years from July 1, 1898.

In addition to this measure the Government have converted the Internal 4 per cent. Gold Loan, requiring 560,9871., per annum into a 5 per cent. paper loan, requiring 7,790,937 milreis per annum.

The rate of interest on the Foreign Debt varies from 4 per cent. to 4 per cent., that on the Internal Funded Debt from 4 per cent. to 6 per cent. The redemption of the foreign loans is to be effected by a sinking fund of 1 per cent. per annum, to be applied by purchase of bonds in the market when the price is under par, and when at or above par by drawings by lots. The internal debt is chiefly represented by bonds, called Apolices, inscribed to the holder, and the payment of its capital and interest, which is provided for by an annual vote of Congress, is under the charge of the sinking fund department (Caixa da Amortisação), independent of the Government, directed by a committee, presided over by the Minister of Finance, and composed of a general inspector and five large Brazilian bondholders.

For 1897 the revenues of all the States except San Paulo, Sergipe, and Parahyba amounted to 102,286,000 milreis, and their expenditure to 101,977,000 milreis; of the 17 States reported on, the accounts of 2 exactly balanced, those of 3 showed a deficit, and those of 12 a surplus. The revenue of Sam Paulo amounted to 48,571,165 milreis, and the expenditure to 58,819,895 milreis, the year's deficit being 10,248,730 milreis. At the end of the year the funded and floating debt of the State amounted to 19,889,724 milreis.

The debts of the States in 1895 amounted to 91,706,736 milreis, of which 85,027,659 was funded, and 6,679,077 floating,

Defence.

The active army consists of 40 battalions of infantry, with 1 transport company and 1 depot company; 14 regiments of cavalry, each of 4 squadrons, 1 cavalry corps of 4 companies; 6 regiments of horse artillery and 6 battalions of foot artillery; 2 pioneer battalions of engineers. In 1897 the army consisted of 28,160 men, of whom 4,000 were officers. The gendarmerie numbers 20,000 men. The national guard is being re-organised. Military service (3 years in the active army and 3 in the reserve) is compulsory.

The Brazilian navy includes the third-class battleships Riachuelo and

24 de Maio (ex-Aquidaban), the sister armourclads, Marshal Deodoro and Marshal Floriano, building (the first-named launched) at La Seyne; the coast-defence vessels Bahia (1,000 tons), Alagoas, Piauhy, Rio Grande, Maranhao, Pernambuco (the last five being river monitors, 340 to 470 tons), the first-class cruiser Nictheroy (ex-El Cid); the second-class cruisers Almirante Tamandare (4,735 tons), Barrozo and Amazonas (3,600 tons); the third-class cruisers, Andrada (ex-Britannia), and Benjamin Constant (2,750 tons), and 12 smaller vessels of the cruising and gunboat classes. The torpedo-flotilla consists of 8 first-class and 6 third-class boats, besides small vedette craft. The torpedo cruisers, Tamoyo, Timbira and Tupy (1,030 tons) have been launched at Kiel (1896 and 1898). The cruisers Abreu and Amazonas, built at Elswick, were sold to the United States at the beginning of the war with Spain, and re-named.

The sea-going turret-ships, Riachuelo (5,700 tons displacement), and 24 de Maio (4,950 tons), were built in England, the former launched in 1883 and completed in 1884, and the latter launched and completed in 1885. Both vessels are protected by a belt of armour (steel-faced) having a maximum thickness of 11 inches, and each has two turrets protected by 10-inch armour. The principal armament consists of four 9.2 in. breech-loading guns carried in the turrets, and there is an auxiliary armament of six 4.7 in. quick-firers, two 3-pr. and 15 machine guns. The 24 de Maio has been partly reconstructed at Elswick and has received new guns. The small armour-clads, Deodoro and Floriano (3,162 tons), are completing at La Seyne, and are of a type unrepresented in our navy. Their small displacement is combined with heavy armouring (13.7 inches of Harvey steel on the sides), and powerful armament, comprising 2 9-4-inch guns, 2 6-inch howitzers, and 4 47 quick-firers. The cruiser Almirante Tamandare, built in Brazil in 1890, is a vessel of 4,465 tons and 7,500 nominal horse-power, with a very extensive quick-firing armament. The protected 20-knot cruiser Barrozo was launched in 1896 at Elswick. This vessel has a large quick-firing armament.

There are five naval arsenals-at Rio de Janeiro, Pará, Pernambuco, Bahia, and Ladario de Matto Grosso.

Production and Industry.

Brazil is an agricultural country, though only a small fraction of its soil has been brought under culture. Coffee is the chief product cultivated, and after that sugar, tobacco, and cotton, maté (Parauguay tea), india-rubber, timber, cocoa, nuts. The annual yield of coffee has steadily increased of late years, and the crop of 1897-98 probably exceeded 10,000,000 bags. The 1898-99 crop will be, however, considerably smaller, probably between 8 and 9 million bags. In Pernambuco the sugar crop, 1896-7, yielded 1,488,206 bags (75 kilos.). In this State are about 30 sugar factories with an average capacity of about 160 tons of cane per day. In Rio Grande do Sul the cattle industry is important. The number killed in 1895 was 280,000; 1896, 215,000; 1897, 320,000; in 1898, 340,000. In the same State are prosperous fruit preserving establishments, tanneries and breweries. The production of rum and alcohol is rapidly increasing. Both the forests and mines of Brazil are of value, but little has been done to make use of them. The mines, with certain reservations, belong to the proprietors of the soil. Coal mines are worked in Rio Grande do Sul; the output in 1895 was 11,012 tons; in 1896, 18,300 tons. In Minas Geraes there are 5 important gold mines worked by English companies and 1 by a French company. Gold is worked also to some extent in Bahia, where silver, lead, zinc, iron, manganese, copper, quicksilver and other minerals are found, Diamond mining is also carried on.

Vast

quantities of iron are known to exist, but they cannot be worked from want of fuel. Cotton mills are on the increase; in Brazil there are 155 cotton factories, of which 43 are in the State of Rio de Janeiro, 35 in Minas Geraes, 11 in San Paulo, 15 in Bahia, 14 in Maranhão, 17 in Santa Catarina, 5 in Pernambuco, 4 in Cearé, 2 in Sergipe, and 1 each in Piauhy, Rio Grande do Norte, Parahyba, and Espirito Santo. The capital invested in cotton mills and factories amounts to about 100,000,000 milreis, and the persons employed number about 200,000. There are important woollen factories for cloths, flannels, rugs, felts, &c., at Rio Janeiro, Nictheroy, Maranhão, Porto Allegre, and Rio Grande do Sul. There are 2 silk mills at Petropolis near Rio. In Rio de Janeiro are also 2 large flour mills capable of grinding per annum 60,000 and 40,000 tons respectively, wheat being imported chiefly from the Argentine and Uruguayan Republics.

Commerce.

The total value of exports from Brazil for the year 1897 is given, exclusive of specie, at 831,806,918 milreis (= 26,752,2247. at 733d. to the milreis), and the imports at 671,603,280 milreis (= 21,567,6607.). Remittances abroad are estimated at 300,000,000 milreis (= 9,644,6147.).

The import duties are very high, sometimes 80, 100, and 120 per cent. on value of imports. These duties are especially high on spirits, tobacco, matches, preserved provisions, light cloths, cottons, drugs, perfumery and patent medicines; while agricultural implements, machinery and tools are but lightly taxed.

The official values of the chief exports from the whole of Brazil in 1897 were: Coffee, 509,190,115 milreis; rubber, 149,691,325; tobacco, 23,971,821; hides, 13,427,229; cocoa, 12,757,957.

From the chief ports of Brazil the most important exports are: Coffee, from Rio Janeiro in 1896, 2,784,958 bags (of 60 kilogrammes); in 1897, 4,066,734; from Santos in 1896, 4,157,971 bags; in 1897, 5,621,762; from Victoria in 1896, 273,255 bags; in 1897, 372,221; from Bahia in 1896, 260,981 bags; in 1897, 292,480; from Ceara in 1896, 6,000 bags; in 1897, 6,578; sugar from Pernambuco in 1897, 110,550 tons; from Maceio in 1897, 28,705 tons; cotton from Maranham in 1897, 1,375 tons; from Pernambuco in 1897, 11,970 tons; from Ceara, 953 tons; from Parahyba, 1,698 tons; rubber from Para and Amazonas in 1897, 22,216 tons. From Rio Grande do Sul the chief exports in 1897, were dried beef, 18,537,098 kilogrammes; tallow, 2,381,468 kilogrammes; hides, 658,642 in number. The chief imports into Brazil are cottons, woollens, iron and machinery, coal, flour, cattle and jerked beef, rice, codfish, pork, lard, butter, maize, olive oil, macaroni, tea, candles, salt, petroleum, timber, wines and spirits.

The trade of Brazil is mostly with Great Britain, the United States, Germany, and France.

The amount of the commercial intercourse of Brazil with the United Kingdom, according to the Board of Trade returns, is shown in the subjoined table, for each of the last five years :

The following are the values of the principal imports into Great Britain from Brazil:-Raw cotton, 201,5897. in 1896; 303,4257. in 1897; unrefined sugar, 190,1087. in 1896; 143,0827. in 1897; caoutchouc, 3,017,9217. in 1896; 2,671,5697. in 1897; coffee, 186,7427. in 1896; 190,2737. in 1897.

The most important articles of British produce and manufacture exported to Brazil are manufactured cotton, the value of which was 2,261,6007. in 1896; 1,771,2357. in 1897; wrought and unwrought iron, of the value of 756,6867. in 1896; 598,2257. in 1897; woollen manufactures, 295, 2657. in 1896; 164,1247. in 1897; coals, 552,1587. in 1896; 582,3157. in 1897; and machinery, 628,4397. in 1896; 323,3587. in 1897.

Shipping and Navigation.

At Rio Janeiro in 1897 there entered in the foreign trade 1,274 vessels of 2,146,834 tons (546 of 887,814 tons British); in 1896, 1,535 of 2,469,628 (687 of 1,238,596 British) The total shipping entered at Pernambuco in 1897 comprised 948 vessels of 1,145,706 tons (280 of 444,845 tons British; at Ceara, 285 of 258,368 tons (42 of 45,297 tons British); at Maranham, 189 vessels of 260,443 tons (50 of 56,985 tons British); at Rio Grande do Norte, 241 of 51,763 tons (11 of 10,422 tons British); at Rio Grande do Sul, 474 of 249,145 tons (47 of 14,741 tons British); at Parahyba, 194 of 185,488 tons (25 of 21,883 tons British); at Paranagua, 429 of 227,713 tons (28 of 10,921 tons British).

The merchant navy in 1898 consisted of 229 steamers of 94,262 tons net, and 344 sailing vessels of 88,000 tons net. In December, 1896, the law requiring that all coasting and river vessels should be Brazilian, after being twice deferred, came into force. In 1897, 212 steamers of 70,680 tons, and 388 sailing vessels of 26,637 tons were employed in the coasting trade.

Internal Communications.

Brazil possessed in December 1896 railways of a total length of 8,662 English miles open for traffic, besides 4,963 miles in process of construction, 4,670 under survey, and 8,440 to be surveyed. Of the lines open,

1,982 miles were Union lines, 2,430 miles were subventioned lines, 990 miles were non-subventioned lines, and 3,260 miles were lines conceded to or administered by the State. Of those under construction, 3,699 were subventioned, 384 miles were non-subventioned, and 880 miles were worked by States. Most of the railways have been constructed with the guarantee of the interest (mostly 6 and 7 per cent.) on the capital by the Government. The total cost of the Union lines up to end of 1894 has been 257,674,937 milreis, and the deficit paid from National Treasury, 11,118,481 milreis. A law was published authorising the leasing of the Government railways.

The telegraph system of the country is under control of the Government. In 1895 there were 10,143 miles of line, and 21,936 miles of wire. There were 289 telegraph offices. The number of messages was 1,283,695. Receipts for 1897 estimated at 3,600,000 milreis; expenditure, 9,844,722 milreis.

The Post Office carried of letters and post cards, 33, 441,000; of samples and printed packets 37,674,000, in the year 1893. There were 2,826 postoffices. Receipts in 1895 (as far as published) 3,632,957 milreis.

Money and Credit.

At the end of

There is little metallic money in circulation in Brazil. 1896 the paper currency amounted to 712,355,394 milreis. At the end of 1895 it was 683,702,000 milreis. The Congress has taken

steps to reduce

the circulation by withdrawing notes, in 1897, at the rate of 10 per cent. ; in 1898, 15 per cent.; in 1899, 20 per cent. ; so that in the three years the note circulation would be reduced by 45 per cent. In 1897 the Bank of the Republic was reorganised with a view to the liquidation of its debt of 194,649,000 milreis to the Treasury. By the transfer of property and securities the debt had by the end of 1897 been reduced to 94,670,150 milreis, and this balance is to be paid without interest within twenty years. The Bank further agrees to advance for agricultural purposes 25,000,000 milreis on hypothecary notes issued by various local banks. The capital of the new bank is stated at 110,000,000 milreis.

The par of exchange in the early years of this century was 5s. 7d. per milreis; in 1833 it was fixed at 3s. 74d.; and in 1846 the present rate, 28. 21d. was established The actual value of the paper milreis in 1868 fell as low as 1s. 2d. ; in 1891 it touched 1s. 03d.; in 1893, average 12d.; in 1894, average 10d.; in 1895, 101d. ; in 1896, between 8d. and 10d.; in 1897 between 9d. and 7d.; in 1898 it fell as low as 5d., but on July 31, 1898, it had recovered to 74d.

Money, Weights, and Measures.

MONEY.

The Milreis of 1,000 Reis is of the par value of 28. 21,

The 10 milreis piece weighs 8.9648 grammes, 916 fine, and thus contains 8.2178 grammes of fine gold.

The 2 milreis silver piece weighs 25.5 grammes, 916 fine, and therefore contains 23 375 grammes of fine silver.

Professedly the standard of value is gold. Gold and silver coins have almost entirely disappeared, the actual circulating medium being inconvertible paper currency with nickel and bronze coins. English sovereigns are legal tender.

WEIGHTS AND MEASURES.

was

The French metric system, which became compulsory in 1872, adopted in 1862, and has been used since in all official departments. But the ancient weights and measures are still partly employed. They are:

Diplomatic and Consular Representatives

1. OF BRAZIL IN GREAT BRITAIN.

Envoy and Minister.-J. A. de Souza Correa, appointed 1890.

Secretary.-J. do Régo Barros.

2nd Secretary.-Raul de Amaral.

Consul-General in Liverpool.-J. C. da F. Pereira Pinto.

Consul in London.-E. Leite Chermont.

There are Consular representatives at Belfast, Birmingham, Cardiff, Cork, Dublin, Dundee, Edinburgh, Glasgow, Hull, Liverpool, Manchester, Newcastle, Southampton.

2. OF GREAT BRITAIN IN BRAZIL.

Envoy and Minister.-Edmund C. H. Phipps, C. B., appointed envoy to Brazil, September 3, 1894.

Secretary.-Sir Brook Boothby, Bart.