No. 31.
Mr. Partridge to Mr. Fish.

No. 92.]

Sir: The year 1872, just ended, has been one of great prosperity for Brazil. The continued advance in the value of her chief crop (coffee) has created an abundance of money, under which there is great activity in new undertakings. So prosperous has been the trade of the country, and so large the receipts at her custom-houses, that the paper money of the empire (the only circulating medium) is now at 26½ pence sterling to the milreis, whose par in gold is 27 pence. So that this paper money, amounting in all to Rs189,000,000. ($102,060,000 United States,) including the notes of the Bank of Brazil for Rs39,000,000, ($21,000,000,) is now only about 2 per cent. below its par gold value.

The treasury of the imperial government shows, for the first time, a small surplus over expenditures; and the chambers have just passed a law for increase of their own pay, and that of the army and navy, the amount of which will consume far more than that surplus.

This leaves little hope for any material reduction of duties on imports, which the government had named a commission to examine and report on. This commission, I had hoped, would recommend a reduction of duty on certain articles, chiefly the products of the United States, (such as hour, kerosene, and lumber,) in return for the abolition of our duty on coffee, by which Brazilian planters profited so much.

In conversations with Mr. Correia, here, I have endeavored to impress upon him, not only the propriety and justice of such concessions, but have asserted that under an increased consumption of our exports their treasury would receive a larger revenue from a smaller impost. But the action of the chambers, I fear, has postponed the chance of success.

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I will not, however, cease to renew those representations, which would have been almost sure of success could we have allowed our abolition of the duty on coffee to take effect, on notice of some such corresponding liberality on the part of Brazil with regard to our own exports.

The duration of the present ministry is still uncertain; but it is not improbable that the Viscount de Rio Branco will remain even after some changes in the cabinet, which has already twice before prolonged its power by such modifications.

In case he goes out, his successor would probably be the Baron Cotejipe, who preceded him.

I have, &c.,