Mr. Thompson to Mr. Hay.

No. 144.]

Sir: I send inclosed herewith a copy of the second annual message of President Rodriguez Alves, read on May 3, at the opening of the second session of the fifth legislature. I also send full translation of certain sections of special interest to the United States.

On the whole the message is of an optimistic tone, especially with reference to the progress of the work of building a modern harbor and dock system at Rio; a part, with the construction of a wide central avenue in the city and the creation of a new National Department of Health, of the plan to make Rio a healthy city, and particularly, to free it from yellow fever, in which much progress is already evident.

The financial situation is dwelt on at length and reflects the generally improved conditions of recent years in the government’s finances which since the time of the funding loan agreement in 1898 has apparently nearly paid its way, at the expense, however, of largely increased taxes and customs duties. A gradual recovery from the crisis of 1900 is also apparent in the showings of exports and imports, which, according to the estimates, both record considerable increases over the previous years. The increase in exports is particularly noticeable—the regular annual depreciation in the value of the coffee crop at last has been overcome by the increase of the value of the rubber and cotton exports.

The Peruvian situation is dwelt on at length, this being the only serious foreign complication Brazil has on its hands. Nothing new is, however, said on this point.

I have, etc.,

D. E. Thompson.

Extracts from second annual message of President Rodriguez Alves, read at the opening of the second session of the fifth legislature.

The people of the Isthmus of Panama constituted itself last year into an independent state under the name of Republic of Panama. This important event was communicated here by the provisional government then organized. I replied to this communication at the same time with Argentina, Chile, the United States and Mexico, the five republics thus recognizing the new republic, for whose prosperity I have the best wishes.

After the denunciation by the Government of France of the commercial modus vivendi we had with that country, the latter renewed it by agreeing to desist from increasing the duties upon coffee, in exchange for the application of our minimum tariff to French products.

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To the United States of America, the country which you know is the largest importer of the principal article of Brazilian exportation, and moreover, receives it free of duty into its markets, I have conceded, to be effective within the current fiscal year and beginning April 20 last, the reduction of 20 per cent in import duties of certain articles of their production, availing myself thus of the authority you gave me by article 6 of law No. 1144, of December 30, 1903.

Mr. Joaquim Nabuco, minister on special mission in Rome, comissioned to defend our right in the arbitrament of the boundary question between Brazil and British Guiana, already presented his third and last memorial to his Majesty the King of Italy, on the same occasion in which the English embassador presented his. The discussion between the parties being thus terminated, we await, with the greatest confidence in the justice of our cause, the sentence of the august sovereign.

Through the initiative of the Argentine Government, which I accepted with the greatest satisfaction, the Governments of the Argentine, Uruguay, Paraguay, and Brazil will be represented in a sanitary congress which will take place in this city, and the opening of which is fixed for the 5th of June next.* * * The preparations in Brazil for the transmissal of the articles destined to the universal exposition at St. Louis, in the United States of America, have been completed. The articles have been sent and the Brazilian commissioners have proceeded thither.

In view of the quantity and quality of the objects sent from almost all the States and from the federal capital the conviction is justified that our country will be well represented, and to this end the State governments have efficiently contributed, as well as the commercial associations and industrial concerns.

Our pavilion is almost completed—it is among the first completed—and according to the opinion of reliable persons it will be particularly prominent among all the other nations at that great fair for its beauty.