Revenue and Expenditure.

The revenue of the empire is raised to the extent of more than one-half by customs duties, laid on exports as well as imports. The direct taxes, which contribute about one-fifth to the total ordinary receipts, are principally imposed on land, house rent, trades and occupations, and transfer of property. To cover deficits, common in recent years through vastly increased expenditure for military purposes, the Government raised loans and issued bonds and paper money entered in the finance accounts as extraordinary receipts.

The following tables give an abstract of the sources of actual revenue, and the branches of actual expenditure in the financial year ending on the 30th June 1875:

The budget estimates for the year ending June 30, 1876, stated the receipts at 107,133,070 milreis, or 10,713,3071., and the expenditure at 102,634,053 milreis, or 10,263.4057. In the budget estimates laid before the House of Congress, for the year ending June 30, 1879, the revenue was set down at 102,200,000 milreis, or 10,220,000., and the expenditure at 107,732,068 milreis, or 10,773,2061. The branches of expenditure in the budget estimates of the year 1878-79 were as follows:

In the budget for the financial year 1879-80 the revenue was set down at 117,273,800 milreis, or 11,727,380l., and the expenditure at 116,675,690 milreis, or 11,667,5691., leaving a surplus of 598,910 milreis, or 59,8107.

In the budget for 1881-2, the revenue was estimated at 116,958,000 milreis, or 11,695,800l., and the expenditure 118,286,758 milreis, or 11,828,675., leaving a deficit of 1,328,758 milreis, or 132,8751. The estimates for 1882-83 place the ordinary revenue at 123,283,000 milreis, and the ordinary expenditure at 127,334,118 milreis.

There were large deficits during recent financial years, which were covered by increased taxation and by loans contracted at home and abroad.

According to a report of the Minister of Finance, laid before the House of Congress in the session of 1879, the total debt of Brazil, home and foreign, amounted to 786,116,837 milreis, or 78,611,6831. at the end of April 1879. The annual charge on the State for sinking fund and interest was 37,550,000 milreis, or 3,755,000l., being more than a third of the national revenue.

In March 1880, the total public debt was 81,543,2117.

The following is a list of the foreign loans of Brazil, contracted, till the end of 1881 :

Loans of Years

1852.

The foreign loan of 1871 was contracted in England, at 5 per cent. interest, and issued at the rate of 89 per cent. The redemption of this and other 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 loan of 1875, also at 5 per cent., was issued at the price of 96, also with a sinking fund of 1 per cent. per annum. The whole of the foreign loans of Brazil were contracted through the banking house of Rothschild & Co., and on the security of 'all the resources of the Empire.'

The internal debt of Brazil amounted, according to the statement of the Minister of Finance in 1879, to 565,000,000 milreis, or 56,500,000l., at the end of 1878. The 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 (Caira da Amortisacao), 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.

Besides the funded home and foreign debt, Brazil has an evergrowing floating debt, consisting in part of Treasury bills, but the largest portion of it in paper money, issued by the Government. The floating debt amounted at the end of the war with Paraguay to 8,300,000l., and the outstanding total, at the end of 1879, was estimated at 61,000,000l.

Army and Navy.

The army is formed partly by enlistment and partly by conscription. In extreme cases impressment is resorted to. Liberal bounties and grants of land, at the end of fourteen years of service, are held out as inducements to enlist, and procure large numbers of soldiers. Exemption from military service may be obtained by either personal substitution, or on payment of the sum of 120l. to the Government. The nominal strength of the standing army is fixed at 20,000 on the peace-footing, and at 32,000 on the war-footing. There were actually under arms, according to official reports, at the end of the year 1878:

There was formerly also a national guard, but it was dissolved in

1873 to undergo reorganisation.

The navy of Brazil consisted, at the end of June 1879, of 57 steamers, as follows:

:

All the ironclads of the Brazilian navy are comparatively small ships. It was decided in 1872, to order the construction of a very powerful ship of this class, and one, called the Independenzia,' was built in the Thames Shipbuilding Works, and launched in October 1876. However, financial distress made it necessary to sell the Independenzia,' and, after having been offered to Russia, it was purchased by the British Government, in March 1878, for the sum of 640,3501., the cost of construction having been 604,000l. At present, the largest armour-clad ships of the Brazilian navy are the Javary' and the Solimoes.' The other ironclads of the fleet are very small vessels, constructed chiefly for coast defence.

The navy was commanded, at the end of June 1879, by 1 admiral, 2 vice-admirals, 4 rear-admirals, 8 chiefs of divisions, 16 post captains, 30 captains of frigates, 60 commanders, 146 lieutenants, 88 sub-lieutenants, and manned by 4,200 able-bodied seamen, the best recruited from the schools of Imperial Marinheiros and sailor apprentices. There are five naval arsenals, at Rio de Janeiro, Pará, Pernambuco, Bahia, and Ladario de Motto Grosso.

Area and Population.

The area of the empire is estimated at 8,515,848 geographical square kilometres, or 3,275,326 English square miles, with a population of 9,448,233, in 1872, giving on the average, about three inhabitants to the square mile. A partial census of the population of the Empire, embracing eleven out of the twenty provinces, was taken in 1872. The subjoined table gives the area and population of each of the twenty provinces of the empire, according to the official returns of the census of 1872, the eleven provinces in which actual enumeration was made being marked by an asterisk (*), with the numbers of population of the other nine provinces filled in after government estimates.

In addition to the above there is a wandering population of aborigines, officially estimated to number about a million souls.

The three largest towns in the Empire are Rio de Janeiro, the capital, Bahia, and Pernambuco. At the end of 1872, the population of Rio de Janeiro was 274,972; of Bahia, 129,109; and of Pernambuco, 116,671.

Brazil is the only country in America where slavery legally exists. But the number of slaves has greatly decreased since the year 1850, when they were estimated at two millions and a half. According to an official return published in May 1874, the number of slaves at that date was 1,016,262, distributed as follows: