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32 X

BRAZIL

A Nn

HER RAILWAYS,

&C, &c.

REPRiNTKn FROM THE ''FORTNIGHTLY review;

WITH A

PREFACE AND APPENDIX

W. DARLEY BENTI.EY,

Brazilian Consiil-General for Canada.

JHontrf al :

PRINTED BY THE GAZETTE PRINTING COMPANY.

18 8a.

PREFACE.

The paper on " Brazil and Ilor Railways " by Charles Waring,
appeared in the Fortnightly Rcvleir, for March, and I hasten
to have it reprinted, because it places the position of the Empire
in its tnie light in a cIp-- and concise form, and because it is
wj-itten by u man vviio not ordy has a thorough practical
knowledge of his subject, but wh.^ is an authority on all the
points contained in his valuable paper.

Unfortunately there are comparatively few books relating to
th9 resources of Brazil, and to many it is a " terra incognita/' so
that I hail with pleasure this means of increasing the knowledge
of an Empire with inexhaustablc resources, and an Empire
whose trade and commerce it is the duty of all Canadians to
cultivate and develope.

Sir Leonard Tilley in his speech introducing the budget of
the present year reterrcd to the deputation which Avaitod upon
him in reference to some reciprocal arrangement with foreign
countries. In 187'J when I was in Biazil a law was passed at
the instance of His E.xcellency Honhor Sinimbu, the then Prime
Minister, by which the Government was authorized to make a
reciprocal treaty with other countries. What was chietly aimed
at then, was. an agreement with Canada and therefore I am
certain that though the Government of Senhor Sinimbu has
given place to another, yet there will bo no difficulty raised on
the part of Brazil to make a reciprocal arrangement with
Canada, so long as it does not interfere with her existing treaties.
Every one knows the enlightened views of His Majesty the
Emperor and how any proposal for the advancement of his coun-
try meets with his entire and cordial cooperation. I know he
is ably supported by his Ministers. All are fully alive to the
advantages of opening up new commercial relations and J can
guarantee that when the Government of Canada approach that
of Brazil they will find the same desire on their part to bind
commercially the two countries more closely tegether.

From the magnificent .am of 88 ! the import. ^^^ f-^^^^^^^, '
Canada have rinen U, $1,328,316 n three years -h de the dutj
collected was $4'.n,556.2G, and irom be.ng the la.t of U 4-
pountries with which Canada did buHineBs in 1879 Bia/.U has
hI to t^e 7th place in the value of her trade with t . country.
In like manner the exports which were f .^--'^ P'f 7^J,"J.^^"
the headin.' of " South America" au.l wh.ch •'f.f «;^^^"/f«,
the hcaa.n eontine.it .bowed that while the total

countries in that laige tonimu" «iqr, 700 over the

amount for 1882 is $910,771 an increase ot ai9o,70J ovei tne
amount lui 1^^^ ^Qj.p ^j,jjn

preceding year or about 30 p. t. tH'i/^"
half, viz.: $495,549.

tLsc figures speak for themselves ! If the trade -^th B. a, I
has tlken such trides in three years with only 6 month «f
': mmunicationwhatwiUitdoin tho future espem^^^^^^^^^
the Government carries out their intentions ot reciprocal ti eat.es^
En^ild to secure the trade of BrazU gave an enormous su sidy
to the Roval Mail Steamship Co.. what is the rcsu t ? England
today does two-third of the trade of that country. In E.o de
Janeiro a one out of the 1,341 native and foreign ships , steam or
':;, which entered that port in 1882, 520 were British.

It is thus that England has ever obtained the command of the
commerce of foreign countries. A trade which springs from $8

rra mimonand a charter in th.ce years is surel.^^^^^^^
cultivating, and ^.orth spending some money to cultivate, I
Zw it is ! and what is more 1 believe every thinking man in
Canada will agree with me.

Very much more can be done, let us all therefore pu our
shlTder to the wheel, and show at the end of the next thr e
years that Brazil and Camula are commercially necessary to

each other.

Montreal, 2nd April, 1883.

^ ' WM. DARLEY BENTLEY,

Brazilian Consul General.

BRSZIL SND MER RHILWHYS.

The notable advance, in recent years, in the value of British
securities of the more ^olid kind, has been the subject of much
discussion. That advance has not only been lar-o but gradual
and the prudent investor has been perplexed to account for it'
One operating cause, which may readily prove to have been the
chief one, has been left, out of the reckoning. It is now, however,
more generally admitted that the enhancement of the values of
home and colonial securities has been due in some measure to dis-
trust of the securities of foreign countries. There has assuredly
been reason for such distrust, The prosperity of the years pre-
ceding the panic of 1875 was a spurious prosperity. Our foreign
trade had been enormous and prices had been high. Great Britain
manufactured, produced, exported, and sold large quantities of
merchandise at apparently a large proHt ; she even received pay-
ment for her goods in cash. Yet, as a matter of fact, she herself
provided the money. The purchases of the foreigner in the
English market, which enriched the Exchequer and caused trade
to be driven at high pressure, were made with English m^ney—
with the proceeds of English loans to foreign governments and
subscriptions to foreign enterprises. The enterprises for most
part proved profitless; the foreign governments into whose
coffers our capital had gone, either through poverty or dishonesty
have not paid the interest on their debts. The result was an
an amount of disaster sufficient to alarm that least discriminating
and most careless speculator in the world, the English investor.
Distrust, as has been said, of all foreign securities succeeded the
previous excess of confidence. It was only natural that the feel-
ing should be carried to the other extreme, and that, in the
remembrance of numerous defaults, we should have forgotten the
few instances of the punctilious fulfilment of engagements. In
short, investors have, in this respect, used no discrimination The
absence of this quality has resulted in a short-sighted policy un-

equally i'npo''^'^,;-^^^^' nl"t tl o sllv n as well as the in-
the honest us we I as tho (lishnnost, tuo soivc .t

ai»„e„.c with u.» -»^'".",j,'° ;;::••.,: , ;iut;r .o-oi^n

profltablo employmoTit u( hci capital b

few years ol" inflation, tho <^v.alev portion won to he ^ow
%:Z, and was sent there with ^i^astij^^^e^U^^ ^^J^
United States, solvent as a coun,las^^^^^^^^^

a jrroat portion of the Bnt.sh capital ^1 «" "\" Uepiiblic, moHt

And whilst this has been tho case with tho Gicat '^^1 "^
Anuwmi. I' (iuatema a and tlonauias,

of the other States-MexK.vand Y ein, ^"^ ' j^.^^, become

Costa Rica and Hcuador, Bolivia -;;^ J^^^ JZ^,n.o is

synonyms tor -P-^'^:^^;;;; J^^'^ Sor U «:! Lerican
that tho o.-d.nary in OS o Inmps t . ^^^^^^^^ ^^ ^_^^^^^^^ ^^^^

securities, the ,t,'..od, the lad ^'''''l' ^ ^,^,^e of the States,

exceptions to the general rule of default t tt

Chili, The Argentine Confederation, and Buu.l,
fulfilled their engagements.

T la I think be worth while to attempt to dispel these

It would, I ^^''"' 7 ;,^^ ^,.,,,^,„ie conditions of the foreign
fallacies byanen.iuir> •"/•: ^' ^^^ ''!^' j^^,^ , ,ital for industrial
countries habitually applying ^J^^,Z,^,,^aY.oiy>e^
enterprises. Such an in,u, . ; "^u d result in showing how
by personal knowledge of t»^« *'^;;^^ . ^'^ '^ ^^.,^^t therefore, I
lar our confidence has -;"^«^^"f.,^"l„i^\; Brazil is to
now propose to do in reference '^ '"^^'^ ' ,,^ ,,iu,ays,
describe its industrial enterprises, ^"'^^ ^ P^^^^*^ supplement
their present position -^/^J soS -d conom\ condi-
this with a brief survey of political, ^^'f'^^ ;„ ^, ^u

tions of the country ^ ^-Z:ZeT^^<^^^ wiih the
events, prove a useful guide '"^ '^^''^ .^.^^ ^f Brazil as a
.ubioct, and will help ^^;^;^l:P'T.o^,^^S tbi^one

£:h:roXt:;:^— > ^^ .tt. finanei. eon-

ro judicial,
loaiiH and
1 has been
1 there are

as the in-

afford to
Huish the
,0 Ibvoign

oad in the

the New

Even the

interest on

V railroads,

ublic, most

Honduras,

,ve bee.ome

(oquenco is

\ American

forgets the

;• the States,

faithfull}'

dispel these
■ the foreign
)!• indnstrial
e and helped
howing how
therefore, I
Brazil is to
its railways,
i supplement
nomic condi-
ly will, at all
ited with the
,f Brazil as a
cting this one
age the pros-
:)onfederation.
financial con-

fusion in consequence of the war with Peru. The extent, too, of
Chilian territory is comparatively Hmall, and her prosperity is
relatively dependent too much on the production of copper.
Iho resourcoH of the Argentine confederation are undoubtedly
^undleas; but, compared with Brazil, its government is unsettled.
Jlrazil, on the other hand, possesses not only unlimited resources,
butresourcesoftho most varied nature, and also enjoys the ad-
vantages of a settled government in the form of a limited
moiiarchy, hiicI. as few countries but our own can boast.

The empire of Brazil lies between the mountain ranges of
i^eru and Bolivia on the west, and the Atlantic Ocean on the east,
along which It has a coast line extending from four degrees above
the equator, near the mouth of the Amazon on the north, to
thirty-three degrees south, within 30(» miles of the estuary of the
River Plate. The length of this coast-line is nearly 4,000 miles.
The country has the great width of 2,600 miles about eight degrees
south of the Equator. Jt narrows considerably towards its northern
irontier, whilst towards the south the width gradually diminishes
to a comparative strip of land lying between the river Uruguay
and the sea, and bordered by the Republic of Uruguay. This
territory of 3,200,000 square miles is as large as that of the
United States between the Atlantic and the great lakes. Two
mugniflcent mountain chains rise behind the capital, Rio de
Janeiro, and extend, the one over 500 (miles towards the north
and the other 250 miles southward at a distance of ten to one
hundred miles from the coast. These mountains rise abruptly
from the low lying sea coast, and, unlike European ranges, descend
on the other side only one-third of their heigh; ,,rming an in-
tenor plateau elevated 2,000 feet above the K vol of the sea
offering extraordinary, if as yet only little deve:oped pastoral
resources. This immense plateau, which rolls away southward
in gentle undulations and a gradual slope towards the great rivers
IS broken by another mountain range, extending from the frontier
of the Province of Pernarabuco, near the Equator, across the
entire empire, having other minor ranges connected with it This
lofty mountain chain divides the country into two immense water-
sheds ; the northern one being drained by numerous river into the
great basin of the Amazon, which is within Brazilian territory
and the other to the south, into the rivers Parana and Uruguay!
The soil of Brazil is of surpassing fertility. The climate of the

northern provincon, Para, Marunliam, Pernnmbuco and Bahia,
JH tropical, but,oxcoi)t in i)lacoH, tlio ultitudo of the country makoa -
thorn uniisiiliy healthy, as tropical dintrictH. The southern i)ro-
vincos, Rio do Janeiro, San F'aulo, Minm Goraort, Rio Grande do
Sul, and Parana, are all oxtreinoly healthy, and otler ovory ad-
vantage in this respoct to European imnii/^'ration. Tho capital,
Riodo Janeiro, haw one of the most ma^miticont harbourH in tho
world, wiiilHt the northern provinccH ;,nvo tropical pnxlucts, and
specially wugar and cotton in f,'reat abundance. The Houthern por-
tion of tho Empire, is suitable lor tho yrowth of every variety of
crops. Jt furnishes cott'eo, the ])rinciple staple of lirazil, in
enormous quantities. Sugar, too, has lately been cultivated with
marked success. Cotton also, an industry of recent growth-
dating, in fact, from the cotton famine— now forms a largo j)or-
tion of the exports from the south, as it has aiways done from the
north. As a matter of fad, tho yield of it is greater than cun be
obtained in tho United States. Every kind of grain can bo suc-
cessfully raise!, in such abundance, indeed, that maize yields
from two hundred to four hundred fold, and wheat from thirty to
seventy fold. The slopes of the great mountains and the southern
plains have an ample growth of succulent grass, admirably
adapting them for breeding and feeding cattle of every kind.
The export of jerked beef and iiidos has always boon tho prin-
ciple trade of the port of Rio Grande do Sul, and the market at
Rio de Janeiro is now supplied with prime beef from the Sierras
of San Paulo and Minas Giraes.

Tho mineral wealth of tho country is so groat, that while its
capital may be said to bo as yet untouched, its ultimate resources
ure practically inexhaustable. In the foregoing enumerations I
have not included all tho provinces by name. The Province of
Matto Grosso, for example, which lies on the confines of Bolivia,
is practically a new country. Then, again, going north, it is
not possible to form a notion uf the productiveness in tho future,
of the groat basin of tho Amazon. It is only in recent years
that any attempt has boon made to develop tho latent resources
of the empire. A special interest is added to our inquiry by the
fact that the money furnished by English capitalists has been
applied largely, if not solely, to such development, in increasing
tho means of commuicatiou and transport between the different
centres of industry and the seaboard.

As regmtls popiilHtion, tlio number of people, which waa
reckoned at the time of the declaration of indepedencn in 1824, at
four und a half niillionH, iw now otitiniated to exceed eleven and a

half milliouH, a number which only suffices to pooplo sparsely a
fringe of the coastline und the njoro favored provinces of the
South. Thus, in 1872, Minas (iiraes contained 1,500,000 in-
habitants. As to the polity and progress of the Empire, from
the time Brazil ceased to bo a I'ortuguese colony, its material,
moral, and inntellectual advance has boon continuoutiand conside-
rable. The revenue, whiith in 1820 was only .€004,000 is now
£12,8[>(>,000; whilst its external trade, whi<h has now reached
£:JC,75G, 160 WHS then little over ,£2,2r)0,000. In 1823, 185,000
bags of coffee were exported from Kio de Janeiro. In 1880 the
exports had increased to ;{,5]H,368 bags, Since the acce.ssion of
the present Kmporor, in 1840, to the present day, the Kmjiire has
progressed uniformly in civilisation. A considerable sum is now
devoted by tiie Government to the purpose of education, and for
the supi)ort of institutions devoted to technical and special
teaching; whilst in the capital alono an additional sum of
£100,800 is annually applied to primary and gratuitous education.
The political constitution of the country is, as I have said, that of
a limited monarchy. It possesses a representative Governmjnt,
guided by the Emperor, operating through the h.ouses of Parlia-
ment and a responsible ministry. The electoral sj'slem is based
on a liberal franchise, which has been recently changed from an
indirect to a direct mode of election, thus increasing the repre-
sentative character of the Constitution. Whilst internal tran-
quillity has thus been assured, i-eligious intolerance, once a source
of political disquiet, has decreased. The opposition to civil
marriage has almost entirely disappeared. One other difficult
question (slavery,) has also been faced with courage, and treated
from an enlightened point of view. The slave-trade itself was
wholly suppressed thirty years ago, whilst a law was passed which
has made the children of slaves free, and this has now been in opera-
tion over eleven years. The institution of slavery is, in fact,
publicly condemned, and by the operation of the law named the
number of slaves has diminished, and now only represents a tenth
of the total population, the rest of which enjoy unrestricted
political freedom and a large share of social equality.
Having thus given a brief outline of the features, and condition

of tho countrj', T will pa«is to the consideration of the position, and
prospects of its chief industrial undertaking — the system of rail-
way. The railways of Bi-azil may be divided into three series or
p;roups. The tirst group com]jrises the lines for which a govern-
ment guarantee was voted in 1852,1855 and 1857, and may be
called the experimental series. Tho second group is a growth from
the first, consisting of minor, and branch lines, built and equipped
with native capita[ and in so much of less interest to us. The third
group or series comprises the railways lately built, and mostl}' in
course of construction, authorized by the law of 25th September,
18*Jii, issued more than twenty years after the decree authorizing
the construction of the first series. The aim of the latest measure is
furnish each province with the needful communication, and the
funds for this purpose have been readily found in this country.

The first series of railways on the capital of which the State
guaranteed a minimum interest of 7 per cent, for thirty years,
comprised three separate lines in tho provinces of Pernambuco,
Bahia, and San Paulo, respectively. In the former province the
Recife, and Sao Francisco runs from Cinco Pontas near the foot
of Pernambuco southwesterly, terminating on the river Una. Ft
traverses a sugar district, having stations about four miles apart.
Its length is seventy-seven and a half miles, and its total capital
is £1,285,060 The Bahia and San Salvador railway starts
from the city of Bahia, the capital of the province, and the second
largest city of the Empire, traversing the sugar, tobacco, and
cotton districts of the town of Alagoinhas. Its length is seventy-
seven miles, and the guaranteed capital £1,800,000. It was the
intention that both these lines should, as may be inferred from
the names, be continued to the river Sao Francisco, making a
junction above the falls, and tapping the immense inland district
ser\dd by that waterway. An}' extension, however, is likely to
be a work of the distant future. The San Paulo railway has a
capital of £2,(J50,000, and enjoys a government guarantee of 7
per cent, for ninety years from 1858. It starts from the
port of Santos, from which cotton and other produce is largely
shipped, is carried up the acclivity of the mountain range to the
city of San Paulo, and thence to its termination at Jundiahy,
fruui which, howeuer, the route is carried on by a native com-
pany. The length of the railway is eighty-six and a half miles.
The total capital ol these three lines is £5,735,660.

Besides those railways, the coiioessioiio for which were given
English companies, the Government decreed, at the same time
the construction of the Dom Pedro Segundo line. The railway
has since its completion been worked by the Government, and
now returns to it 8 per cent., on the large capital of £24,000, per
mile expended in its construction. It starts from Rio do Janeiro,
traverses tiie most important part of the province to R. Barra do
Piviahy, where it branches to the province of San Paulo on the
one side, and to tho southern part of the province of Minas Geraes
on the other. Its construction involved great engineering skill
and much labour. The length in operation is 426 miles, and 65
miles are under construction, tho cost which has been defrayed
by the State, amounted to £10,000,000.

During thoearly period of the existence of the subsi.'' ^d lines,
and before traffic was developed, the guaranteed intoi. „ had to
be made good out of tlio Iiiiiierial treasury. Traffics have since
so largelj increased that tho net revenues are sufficient, for the
most part, to enable them to dispense with tho government gua-
rantee. One of them, the San Paulo, contributes a profit to the
State. It last year paid adividend of lOJ percent, on its capital,
and handed to the Treasury £57,902, being one half of the net
receipts over and above 8 per cent, upon its capital, to which
payment the Government is entitled until it isro-imbursed for all
advances previously made under the guarantee. In considering
the financial results of the first series, the surplus receipts of th.
Dom Pedro Segundo line may fairly be included. If we take the
difference between the actual net income of this line, and the
interest of the capital if borrowed at 5 per cent, as it virtually is,
we have an annual income from this source ,;f £336,400, and
if to this be added the surplus receipts of the San Paulo line, we
have a total of £394,392, as against a total annual liability of' the
Government of £391,783, thus showing that the liability of the
State on tho first series is more than covered by the sum of" £2 608
per annum. There is a word more to be said on this head. If the
two lines which si ill require State support the claims of the Bahia
line alone are important. The idea of reaching the falls of Sao
Francisco was grand but i mpracticable. It has unfortunately preju-
diced tho companies, for the route taken was notdirect to tho chief
area of production. The lines projected and in course of construc-
tion in the two provinces are happily not open to this objection.

After UiO comploLo opening of these trunk lines, about tne year
1862 the second group or series was commenced. This consists
of an entire network of provincial lines, forming extensions, and
branches of the main lines, and constructed by Braailian enter-
prise, and Brazilian capital without any Imperial guarantee. In
some instances, however, the companies enjoy provincial guaran-
tees of a mod'irato amount. Of these railways established without
Impei'ial aid, details would occupy much space, and would
scarcely helj) our enquiry. I must be content, therefore, to say
that many of the lines are now earning from 7 to 10 per cent* on
their capital, and that the total lengih is 2,305 miles, of which
1,382 miles are in operation, and 923 miles are under con-
struction.

By the law of the 24th September, 1873, to which reference has
alrejidy been made, the construction of the tliird group or series
Avas decreed" It authorized the construction of twelve railways
in the various provinces of the Elmpire; the Government under-
taking to guarantee interest at 7 per cent, for 30 years upon
construction. The distribution among the several provinces has
been made upon the equitable principle of giving to each an
amount of railway con.muuication in proportion to its population
and necessities. Like the railways compi'Ising the first series,
these railwaj'^s are designed to supply the main arterial communi-
cation between the productive centres, and the seaports of the
diflferent districts ; and it will doubtless be found, as in the case of
that series, that private enterprise will supply subsidiary lines.
The following are the twelve railways constructed or under con-
struction under this decree.
The Great Western of Brazil, in the province of Pernarabuco,

length GO miles, capital £562,000.
The Conde d'Eu, in the province of Parahyba, length 75 miles,

capital £575,000.
The Campas and Carangola, in the province of Rio de Janeiro,

length 215 mi.cs, capital £675,000.
The Imperial Central of Bahia, in that province, length 187f

miles, capital £1,642,500.
The Minas and Rio, in the province of Minas Giraes, length 106

miles, capital £1,816,875.
The Donna Theresa Christina, in the province of Santa Cutharina,

length 73 miles, capital £713,238.

The Natal and Nova Cruz, in the province of Rio Grande do

Norte, length 15 miles, capital £«18,300.
The Alagoas, in the province of Maceio, length 55 miles, capital

£512,212. ^

The San Paulo and Rio, in the province of San Paulo, length 145

miles, capital £1,200,000.
The Rio Grande do Sul Railway, in that province, length 300

miles, capital £2,700,367.
The (^uarahin and Itaqui, also in the above province, length 124

miles, capital £675,000.
The Compagnio Generale (Parana), in the province of Parana,

length 6'8 miles, capital £880,508.
Total mileage. 1483. Total guaranteed capital £12,500,000.

I should perhaps observe that the first eight in the above list
have ahead}- been successfullj- issbued in London.

With the third series the approximate length of both guaran-
teed and unguaranteed railways in Brazil is 4,400 miles, of which
2,500 miles are already in operation, and 1,900 miles in construc-
tion or planned. The cost of the constructed portion has been an
average of about £12,700 per mile. Out of the 2,500 miles now
working, most of which, although some are only recently con-
structed, are earning good dividends, made up in some instances
with the aid of the Government guarantee, over 1,400 miles have
been worked for some years, and earn an average dividend of 8
percent, per annum. It will be observed that both groups of
railways guaranteed by the State have been established on a
principle of equity to the whole population. The object of the
Government has been to obtain main routes of traffic from the
coast to the interior of the country, so as to insure to the producer
the cheapest and most expeditious mode of transit of his products
to the seaports. I should add that when the Government in 1855
undertook the liability of £301,783 per annum, involved in the
guarantee of interest in the tirst series, the revenue amounted to
only £4,194,.200. With this revenue rapidly increasing the State
was well able to support the burden until the railways became
self-supporting. Moreover, ihe railways themselves materially
helped to increase the revenue : for it goes without saying that
their construction incalculably increased the trade, commerce,
and material prosperity of the country.
Having now learned the character, cost, and revenues of the

i f

entitle network of railways in the Empire, it will be gratifying
to note how large a nhare Great Britain has taken in the work.
The participation of other countries in it has been so small, that
it may be said England has practically accomplished the whole
of it. From the declaration of Brazilian independence to the
present time, England has been the moneyed partner of Brazil. The
loans of the Empire have been subscribed here, and the railways
have been made by English engineers, and contractors with
English capital. England furnished the technical knowledge, and
supplied the material of construction, and all the rolling and
fixed stock. The co-partnership has been profitable to both
partners. In the first series, all the concessions came into the
bands of Englishmen, and these railway's are entirely carried out
under English superintendence. And although the initiation,
and construction of the second group of railways is due to native
enterprise, yet the greater part of the material used in the con-
structicm, together with the rolling and fi.Kcd stock was purchased
in this country. Of the £12,500,()((0 of guaranteed capital appro-
priated to the third series, concessions absorbing five-sixths of
the whole have been confided to English capitalists and contrac-
tors, and with the exception of a ti-ivial amount raised in France,
the nocessarj' capital has been raised here.

If it be not possible to ascertain with absolute correctness the
profit deriveil from these undertakings, a tolerable estimate may
be made. The shares of twelve railways quoted on the London'
Stock Exchange, stand at a greater or less premium above their
par value. The d'fierence between their par value and their
quoted value is £3,120,978. To this profit must be added the
profit on the materials, on the equipment, and on the contracts
for the construction of the lines. It may be fairly estimated that
the material purchased in this country would be equal to one
fourth of the total cost of the railways, or £4,.558,915. If on this
u profit of 10 per cent, be assumed the amount would be £455,81)1,
Assuming also that the contractors may have realized a profit of
10 per cent, upon their contracts, amounting in the aggregate to
£18,235,660, a further profit would arise of £1,823,566. Those
figures bring the jirofit of the English i)artner in the business to the
formidable total of £5,400,435, irrespective of the profit made by
our shipping, on the sea-carriage of the material which 1 do not
eHtimato. Bearing in mind, also, that the capital has returned an

interest of from 6 to 7 per cent, per annum, I think it will be
admitted that the money partner in these transactions has good
reason to be satisfied.

In concluding this portion of my subject, I should observe
that the high esteem in which Brazilian railway stocks stand in
our money market has recently had a very natural result. On
the 3rd of February 1881, the Government found active compe-
titors lor the concession of the «io Grande do 8ul railway at
one per cent, under the heretofore guaranteed interest of 7 per
cent. It is related of^tho Quaker Banker of Darlington, Joseph
Pease, one of the earliest promoters of the English Railways and
a personal friend and patron of George Stephenson that he once
said to the latter who then usually charged £5 per day for his
professional services:-" If I were thee, George, I would charge
' £10 a day. People would think the better of thee." The
English firm of contractors who ottered to construct the Eio
Grande do Sul Railway on guarantee of 6 per cent, did in
eff'ect,givesimiliar advice to the Brazilian Government. The advice
was taken. The Government have resolved to limit the guaranteed
interest on all future public works to 6 per cent per annum
Other large enterprises have since been undertaken at the lesser
rate, and it seems probable that people will think the better of
Brazil for appraising her own credit at a higher value.

The custom of raising the capital required,as and when required
involves necessarily a large numbei- of separate issues, and brings
the Brazilian demand lor money continually before the Public.
It has given rise to an erroneous impression that the public enter-
prise is being pushed forward with a rapidity disproportionate
to the means of the country. That this is not the case can
readily be shown. When the public revenue amounted to only
£4,194.200 the Government, as we have seen, undertook a
liability in respect of the first group of railways of £895 500 or
nearly one fourth of that revenue. Later, when the revenue
reached the sum of £10,800.000, its current liabilities, in respect
of tho guarantees for the third group of railways, reached £868 -
248 or only one twelfth of the total revenue. It follows thero-
Ibre that in the proportion indicated, the State was far better
able to guarantee the third than it was to guarantee tho first
series. Moreover with the increased and progressing trade and
commerce of the country, it is likely that the liability in res-

pert "to the third series will diBappear more rapidly than that in
respect to the firwt disappeared.

It is not my present purpose to deal with the question 'of the
national doht of the enipiio but I may say that when deduction
is made for the temporary or extraordinary expenditure on pub-
lic AvorUs which sooner or iatei* will become reprcxluctivc the
budgets have for so many years nearly balanced. The foreign
debt which amounts to £liO,G5i{,t>37 (exclusive of the new loan
just issued) is rapidly repaid by the operation of a sinking fund.
Other loans will doubtless be issued; but it may be fairly as-
sumed that the same prudence which has guided the financial
policy of the past will guide that policy in the future. The in-
ternal debt though large is in no way a danger to the country
for it is exclusively held by the E. diians themselves. It had its
origin in the days of the war with Paraguay', — a war which in
effect threw Brazilian progress back a decade, and from the
effei ts of which the country has only recently thoroughly re-
covered.

It will be seen that remunerative investments have been
found for English capital in Brazil. Considering the magnitude
of the empire and the necessity for improved means of commu-
nication it is clear the field for further investment is practically
unlimited. The question therefore to be answered is : Are there
any rocks ahead on which our fortune might split? The answer
is, that there are undoubtedly leatures affecting the prosperity
of the country which it would be unwise to ignore if our in-
quiry is to be effected. The chief considerations are five in
number, viz: slavery, immigration, the succession to the throne,
the question of frontier line involving war, and the production
of cofiee.

As to slavery. With the advance of civilization and the appli-
cation of machinery to production, this institution is probably
doomed. If the prosperity of Brazil rested mainly on the con-
tinuance of slavery, 1 should despair of her rising to the magnitude
of a great power, or developing a strength commensurate with
the extent of her territory. But so far from this being the case,
Brazil has for the last thirty years been cutting herself adrift
from the "peculiar institution," the importance of which to her
p'osperity is dally diminishing both relatively and positively.
In 1831, the law freed all Africans thenccf<-n'th brought into tho

ban that Id

tion of the
I deduction
ire oil pub-
liK'tive the
rhe foreign
1 new Unin
iking fund.
>, fairly us-
10 financial
D. The in-
10 country
It had its
which in
from tho
roughly re-
have been
magnitude
jf commu-
praclically
Are there
rhe answer
})roHperity
if our in-
iro live in
he throne,
production

i the apj)li-
i probably
n the con-
magnitude
irate with
g the case,
•self adrift
lich to her
positively,
ht into the

Empire; in 1850 the slave-trade was otfoctually abolished; in
Jl'„; r' '^^'"■"' ''" ^''' "^'"^-'^n^ipation freed ail children
bom of slave parents after its promulgation, and establisiied an
emancpation fund designed to givegra.iual freedom. The action

1 r laT "^ T^'TI '' ''' "^""■' «^ '"^'^''^-^'^ -'- -•--

n. mT ' Am ""'"''"■''^ ^'^'"'^•■^- ^"^ ^^''"« "^ this lal-ge
Zs Vm^ """.''"'r t' '""^ ''■'^"^ o"'y 11,000 in eleven
fhropy ^' "" "''"''''"" "'P'"'^''^*^ P"^"^"-

me^nt^rwrn'"" ,?""'^"^''''" «" *^'« P^""^ '« "«* one of senti-
ment, but whether the economical constitution of the State will
be seriously injured by the disappearance of slavery In Ihe
opinion Of those best able to judge the abolition of sLery w
not be sudden Nor is it thought there is any probability that
•ts collapse will endangertliefutureofBra.il by sLial co v .Is on

Te br;:;; "■ ''^ ''^"^°^'^^^-''- ^^ ^'^ tropi;!al north, wl «'
the b acl man s paradise, and where hi« services are reully indis'
pensi ble it is not likely the negro population will either disappel.
or deteriorate. We may indeed assume that the iicn-o vvTan a

than heretofore he has laboured for a taskmaster. In the southern
provinces, by far the most important of the Empire, any lossof
negro labour will be compensated by the free labour ;f Euro, ean

place of the former. There are two other aspects of this question
Reassuring .n the face of the certainty that, by mortal it;!;
mu Zi 7^;-P-t;o". f-e labour, whether black or white.
must be the labour of the future. Brazil has a consideaable

wht: '7r''''r- , ^''^ '"•'" '"■« -"«^ !-''•-■% but are in reaU^y
r^^i:Zr '"'f*-l!.«f ^'-country. The number i^

total as th J • ' ":' ^^'"^ P'""^^^'^' underestimates the

total as they live away from civilization. These men, when
brought into contact with civilization are found to be doc le and
industrious, and as the country is opened up may largely recruU

between black and white. The existence of a large mulatto popu
ation IS an assurance that there will be no abrupt severlc'e of
the interests of the two races in this way linked togetll blood
As to immigration, the tide has hitherto set towards the iZr

Plate, because of the advantages ami facilities of communication
which it offers to the European settler. The southern Provinces
of Brazil are, however, quite as fertile and as healthy and tempe-
rate as the countries farther South ; while the Government
is intinitely more stable than that of the neighbouring republics.
With the increased means of communication, immigration is
already taking this direction. Hio (Jrande do Sul alone contains
a German population exceeding seventy thousand. Official statis-
tics show that the number of third-class passengers — all of whom
ma}' bo fairly assumed to be emigrants — arriving in Rio de Janeiro
in the two years, 1880 and 1881, was 40,783. Of these, Portugal
sent 17,'-80, Hut it is a significant fact as showing that other
nations are now turning their eyes to Brazil, that the total included
1359G Italians, 4239 Germans, and 3920 Spaniards. 1 should add
that the Portuguese and Spaniards settled chiefly in the seaports,
while the Italians and Germims wont on into the interior. The
completion of communication now on hand should, I think, give
considerable im|)ulHe to immigration which will also be encou-
raged by the passing of the Protestant Emancipation Bill that has
established religious freedom.

As to the succession, reflection on this subject must be more
than usual affected by the striking personality of the present
Emperor, who is still in the full vigour of life. Of his capacity
and patriotism I need say nothing, for ho is acknowledged to be one
of the Hrst monarchs of the century. His strict adherence to the
letter of the Constitution has helped to endear him to his people,
while it has stamped the polity of the country. The dynasty, in
truth, seems as firmly fixed as ours. The succession to the throne
is fixed by law approved of by the people, and will doubtless take
effect as quietly as it would with us. The Princess Isabella,
daughter of the Emperor and heiress to the throne is married to
the Conde d'Bu, grandson of Louis-Philippe. Her husband,
therefore, inherits the tradition of a great governing family, and
has become popular through his successful conclusion of the
Paraguaj'an war. A succession thus legally assured, embodying
the religion and traditions of the people is a guarantee for the
continuance of social order and prosperity. There are no preten-
ders to the throne while the exhibition of republican misrule in
the other South American States must endear their own form oi

government to the Brazilians.

::£,

As to the frontier quention, it would be to travel in search of
difficulties, to imuirino thai in an immen».e and sparHoly peopled
country like Bra/.il, any dispute about frontier would occasion
war. JtiHtruo that the Mossione.s qucHtion was a question of
frontier. The fact however (hat it has been suhmitt.Ml t.. the ar-
bitration of the (iueen of Kn^rJaMd is an ar-u.nent in favour of
what iH here advanced. Hra/.il cntertainH no feelin<r of anim-
osity towards her neii-hboins, and she is placed beyond the in-
fluence of European political conipliciition. The war, too, wajred
with Paraguay, although succesfiil, has left bitter c.vpericnces
The Brazilian people arc not warlike, and it is understood to bo
the .settled policy of the (fovernment to avoi.l extensions of
the empire, whilst maintaiinng its integrity. (Tnder these cir-
cumstances war would aiipear to be one of the least probable
oventsiii the future history of the empire.

It cannot be denied that Brazil depends largely for her pros-
perity on a single produce. "Ooffee is King," they say in Rio
and well they may, for its production represents more than
half of the average value of the export produce for the last
fourteen years. Since 187G inclusive, it has exceeded this pro-
portion, in the year 187(J-77 the value of cotfee exported was
£11,211,100, un<l in the year 1877-78 £11,020,500 out of a total
export of ,£19,55«,300 and £l8,(i,i4,!)00 in the two years, respect-
ively. In 1878-70 it gave £1 1,348,100 out of a total of £20,405,-
700 which included cotton, sugar, hides, India rubber, mate, to'-
bacco, gold and diamonds, in quantity the export of cotfee in
these year was nearly one half of the total annual consumption
of tho world. The importance, therelore of its production is ap-
parent. It appears, however, to rest on a secure basis. The
Brazilian ])lant9r can complete successfully with any other
planter in the markets of the world, and will be aided largely by
tho economy of transport afforded by the now communication
with tho sea board. Tho culture of the plant is not, fortunately
dependent on slave labour. Official statistics show that, so far
back as seven years ago, more than half the labour employed in
tho province of Rio do Janeiro, Minas Goraes and San Paulo
was free, the proportion being «62,371 free and 521,102 slave la-
bourers a proportion increasing every year. It must, nevertho-
Isss, bo admitted that to depend so largely on one production is
not wise. Pruuouco would dictate the desirablity of oncourag-

J I !

ing tho c'dltivatioii of other a,i,n-i(niltural prodnctH. Tho means
of doinj,' thin arc not far to sook. Tlio rivor Plato rejwiblics
alroadj^ grow and export to Ilio de Janeiro broadHtiirtk in con-
siderable quantities. The Hoiithern provinces of Brazil are jiiHt
aw capable as those territories ai-o of producing grain of all kinds;
and wo may expect that before long they will not oidy supply
tho homoHtoad markets but themselves become exporters of
breadsturt's.

Tho facts above sot forth as to tho present condition and pros-
pects of tho countiy seem to mo to warrant the conclusion that
there is nothing existing or impending calculated to retard per-
manently or riously its continuous material pr(is|)ority. And
it seems likely therefore, that Brazil will continue to afford, as
she has atlbrded in tho past, profitable occupation for British in-
dustry for generations yet to come.

liiir

ho means
rejMiblics
irtk in con-
il iiru JtiHl
all kindn;
ily Hupply
lorttu's of

iind pr08-
UHJon that
atiird por-
ity. And

attbrd, aw
British in-

APPENDIX.

l^Xlr/sa^ "'"""" '""""' """"'■"" •"-'. /- *-

Totnl IniportH.

2,757,81)2

42«,40!»

2,2()0,H05

l»,(i4(;,(;,Si

18,127,322

751,083

12,28(5,391

451,450

183,682

Imported from Brazil

3(;,t;(»5,257

l,l«i4,535

6 392

2,378

8' 135
263,142

42,000

1882,
$1,328,316

Sugar |b8.

('olibo (<

Tapioca <<

Hides «

^Vool '.'bbH.

Cotton «<

India Hiibbor.... "

Tobaoco <<

Cocoa NutH No.

Cocoa |i)s[

IMPORTS

From Brazil to Canada for the years:
1879, 1880, 1881,

«8 $147,430 $611,577

EXPORTS
From Canada to South America for the same period ■

«W,648 S756,201 S715,062 S910.771

To Brazil aloae, $493,549.

NOTE.-In the export returns Brazil wa. alwayn included und^r
South America. In 1882, the trade had so muc^ imp" ved t t
Brazil was awarded a place in the returns by herself and boH, f
unportsand exports appears the 7th on't^.^^T coun it
with winch Canada trades, in amount aad value The whoT«
amount of the trade in 1882 from Canada to Nutriment
including Bi-azll, Chili, Peru. Bolivia, U.S. of Columbia UrZav

„ ^ ^•'- "^^ Tons, 10,119

Ports'dn^'''''' '"^'"'^ '''''"''^ ^'-^"^ ^'■«-' ^'t Canadian
I'orts during same period :

^°- 62 Tons. 29,274

I— t
W

pc;

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00

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a 2

a .2

~ 'a

pec a

to o 1- >- f t- 00 'a o

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■ C£>

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Colo
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•n ^

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. ^ T)l .-■ tt X CO

.-^ 05

. in 00 •<)> 'i" CM CO

• e-J t- * CD o 00

— oo

• .-^o~oo co'o'c^

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00
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ita

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lit.

Yalue 0/ ^Ae Chief Articles imported into Rio de Janeiro

1880-81.

Lealhoi- and Skinn 81718Y18 17

Sallod Meat, FiHli, &c ' H<MIHV>' l''}

Comils Kloiir, &(. LMlOJdU.'ni

I'laiitH, I'liiitH, &(? 824,772.54

Wiiio and S|»iri(s 2 }»:{4 575 '"*

i'c.fumory [,['. ]\lii)H''Hl'{)Mi

^j^omm^\ !»6!»,42G.75

l-f^V'"" 8,5:{(Vi45.52

)^'»"<^"« :{,4n,(;i8.47

J^V,'""^ 1,55(J,«87.29

^'"^■^ 807,17!>.2;{

Paper ... (i78,7;W.92

Coal hncl<,&c l,9(»7,4f)6.72

Metal, Iron Stool, &c 1,423,014.48

Alaoiineiy 1,241,2«0.25

bundnoH 4,160,978.22

Gold and Sdvor 3,163,01«.3G

Crockery and Glaan 479,631 . 45

Number of vessels entering the Port of Bio de Janeiro in the year

1882. .

Nationality.

British

German....
American .
Brazilian ..
Argentine

Belgian

Danish. .>...

French

Spanish

i'utch

'Ml an

Norwegian
Portuguese

Russian

Sweedish...,

Hailing.

280

120

1
14
27
94

3
17
53
55
3
39

Steam.

244

58
13
60

31
1

i'i

Total 812 529

Total Steam nnd Sail; 1,341; Tons 1 192 647.

PERXAMBUCO.

Principal Exports for the year 1882.

Cotton bales 14(5,543

Sugar bags 1,072,640

Hides dry galled 45,280

Do wet 25,989

Do chy 2,348

Assu. Salt litres 1,464,380

Imports.

Codfish drums 245,124

-Do I « 3i,2h:J

Lard kegs 13,619

Do cases 158

Potatoes boxes 14,410

Do baskets 17,585

Rosin brls. 5,181

Coal ...tons 33,977

Onions boxes 8,885

Cement brls. 21,174

Beer cases 9,369

Do brls. 6,079

Flour brls. 166,966

Beans bags 8,156

Rerosine cases 135,100

Butter brls. 10,956

Do kegs 17,780

Do cases 3,792

Cheese cases 10,151

Wrapping Paper bales 28,788

14(),543

,(>'72,64G

45,280

25,989

2,348

1,464,380

245,124

31,28:^
13,619
158
14,410
n,585

5,181
33,977

8,885
21,174

9,369

6,079
166,966

8,156

135,100

10,956

17,780

3,792
10,151
28,788