No. 44.
Mr. Partridge to Mr. Evarts.
Rio de Janeiro, May 10, 1877. (Received June 11.)
Sir: The ministry find it impossible to have the appropriation bills for 1877–’78 passed in time (June 30) through both chambers, and have now brought forward a motion (according to constant necessity for the [Page 50] last years here) to authorize the collection of revenue and expenditure of moneys during six months, according to the items of the last appropriation act, now in force, and whose provisions expire on 1st July.
The present session began in January and must expire in September; so that during five months nothing has been done to provide the means of carrying on the government after June.
By the passage of this enabling resolution, the ministry will have previous authority for expenditures after June, and they hope to have the regular estimates allowed before adjournment in September.
On this motion an interesting debate has been going on, and the opposition (liberal) party has gladly found itself re-enforced by some dissidents who have hitherto never offered to vote against the ministry.
On the 4th instant one of the opposition leaders, Mr. Affonso Celso, attacked the present government for its continuance of unauthorized and extravagant expenditure, for its constant opening of new credits, (in imitation of the French,).and which in fact is nothing else than an appropriation by the ministers, and for the insufficient remedy proposed to meet the present deficit, namely, an increase of already too heavy duties on imports, without any proposed reduction of expense.
His assertions could not be contradicted, because they were based on the statements “and figures of the minister of finance’s, report.
From those statements, during the period between 1840 and 1876, it is shown that, notwithstanding the constant increase in the yearly revenue and appropriations, the actual expenditure during each year has greatly exceeded both revenue and appropriation; that while estimates of receipts fell short of what was really collected, the various ministries had, in their expenditures, exceeded not only the suras voted by law, but the excess or surplus which otherwise at the end of that time would have thus accumulated a large surplus fund, but also had constantly incurred indebtedness beyond, by raising money in various ways to meet expenditures far beyond what was authorized, and for purposes not contemplated in any law; that this excess of expenditure beyond both appropriations and receipts amounted now, in thirty-six years, to more than three hundred and eighty millions of dollars, (seven hundred and fifty-nine thousands of contos of reis); that of this sum about one hundred and fifty millions had been contributed in excess of the estimates, so that the amount of expenditure beyond actual receipts, at the end of thirty-six years, was still more than two hundred and thirty millions of dollars, which now formed part of the national debt.
This last, of course, is of much greater amount, including the deposits on interest by savings-banks and the proceeds of unsettled estates, together with floating debt (treasury notes) and the paper money in circulation, and summing up together some three hundred and seventy-eight millions of dollars.
These annual excesses of expenditure have been hitherto met by each succeeding ministry by using these deposits as if they were regular resources, and by diversion of funds raised for other purposes (railroads, &c.) to meet contingencies not foreseen or provided for by law.
This process has now gone on so long, that the interest on the accumulating indebtedness now requires those funds which were hitherto paid on account of the principal; this last is no longer practicable, and, now, at last, the deficit is acknowledged.
The remedy for this is still to be found, and the proposed increase of duties (twenty per cent, additional) will only lessen the receipts.
The true remedy, which the ministry has not had the courage to propose, namely, a cessation of all public works that can be postponed and [Page 51] a reduction of all salaries to government employés, (increased, and nearly doubled in some instances, three years ago,) is the only escape offered from embarrassment, failure, and bankruptcy of the treasury.
These salaries and pay of all government officers and employés amount now to 24½ millions of dollars, nearly one-half (49 per cent.) of the whole revenue. The interest on the public debt consumes one-third more, so that for all other public charges whatever, army and navy material, public works, carriage of mails, railway and navigation subsidies and all other public objects, there is now disposable only one-sixth (about eight or nine millions of dollars) of the whole revenue of Brazil. I annex hereto the tables used by Mr. Celso, (the treasury statements since 1840,) which show annually the estimated receipts and the excess actually collected, and the expenditures provided tor each year by law in contrast with, those actually made.
From these, the present financial condition of Brazil may be learned without further reference than to preceding dispatches from this legation.
I am, &c.,