No. 77.
Mr. White
to Mr. Evarts.
Rio de Janeiro, February 27, 1879. (Received April 7.)
Sir: When Mr. Gaspar Silvaria Martins became minister of finance a mil-reis was worth 26 pence; when he retired from the office it was worth but 21, and to-day it is worth but 20½ pence.
Customs duties are payable in national currency, and consequently government suffers from the depreciation of its currency.
Last year the national deficit was $10,000,000, and unless a remarkable change takes place this year will furnish higher figures.
Business is bad, and the prospects are not encouraging. I could not conscientiously advise my countrymen to invest their capital here at this time.
Foreigners and foreign capital control the trade of this country.
English banks regulate exchange; the great bulk of the debt of Brazil, principal and interest, is payable in gold; emigration gravitates towards the cities, and the great farming regions are almost wholly uninhabited, and coffee and tobacco are depended upon to keep the machinery of government in motion, and to pay for imports.
With the exception of the blacks, Brazilians do not perform manual labor, and very few of them are engaged in trade.
[Page 134]A professional existence or a political office is the wish and work of the Brazilian.
The wealthy Brazilian keeps his money in England or France, receiving from 3 to 4 per cent. interest, and he pays taxes on improvements, for which the government or province pays from 7 to 10 per cent. to foreign contractors.
Brazilians, as a rule, do not invest in home bonds or securities or improvements.
Monopolies and corporations having government guarantees of from 7 to 10 per cent. have been a great curse to this country.
In many instances a company has received a government guarantee of 7 per cent. on “estimated cost,” when the actual cost would not be more than one-half the estimate; but the assumed cost has almost invariably been the statement furnished the government.
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The series of causes are sufficient to clearly demonstrate the effect which is now felt by the business interests of Brazil.
The soil of this country is rich and fertile, and if the colonization of skilled farm labor can be accomplished, this country will become one of the great; nations of the earth.
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I know it is popular to say that this country is an Eldorado for Americans with energy and money, and many American newspapers have pictured Brazil as the land of plenty, but it is my duty to give you the facts, and to describe affairs as they exist.
Unless a man has ample capital to carry on a business in which he has had experience, or is under contract, or has a specialty which he has good reason to believe will pay here, he is much better off in his own country.
There is room here for our merchants and manufacturers who have goods and wares adapted to this market, provided they can compete with the home prices of foreign dealers.
Eventually the trade of this country will be controlled by our country, but it will take time and honest goods, and persistent effort, to bring it about.
English capital, English goods, English subsidized steamship lines, and English influence, must be met, checked, and overcome.
It is necessary to have established here branches of solid American business houses, and to have the quality of goods kept up.
I think it is wrong in Brazil to tax our flour and many other of the necessaries of life, but in the present distressed condition of affairs the time is inopportune to suggest a change.
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In giving you this extended and frank explanation I believe I but perform my duty.
I have, &c.,