No. 67.
Mr. Partridge to Mr. Fish.

No. 229.]

Sir: The depression in commercial matters in Rio de Janeiro, during the year 1874, may be partly explained by the excessive importations during that ye°r. According to the “Annual Retrospect for 1874,” published by the Jornal do Commercio, it appears that the value of foreign imports into Rio de Janeiro alone was, during 1874, Rs. 88.697:385$312; during 1873,Rs. 75.650:238$531; showing excess in 1874 of Rs. 13.047:146$781, or about seven millions of dollars. So unusual an amount of imports did not find ready market, and remained in deposit, (bond,) thus locking up the capital invested, and tightening the money market. Money was dear, and the scarcity was sensibly felt. This was especially the case during the last months of 1874; and, notwithstanding the irredeemable paper-money—the only currency of Brazil—which is outstanding to a large amount, (nearly one hundred millions of dollars,) and which, not being exportable like gold or silver, must remain in the country and constantly seek employment. The want of currency experienced during those last months of 1874 was similar to that felt in the United States after September, 1873. The effect of this is declared to have been more prejudicial than anything known here since their disastrous year of 1864, when there was a general bankruptcy of the great houses, and the consequences of which had not disappeared when in 1865 began the enormous expenditures of the war with Paraguay. Part of this result is attributed to the fact that, in May and June last, the imperial treasury was greatly in want of funds; and paying readily 6 per cent, for loans, at short date, absorbed large amounts, which otherwise would have been available to commerce. Exchange on London (90 days’ sight) reached the par of 27 pence sterling to the milreis, in consequence of the failure, at first, to place the new Brazilian loan there; and as soon as this failure was known, so that the expected fund there was not available for exchange, the rate was lowered, and the milreis became worth only 26 pence. To these circumstances must be added the fact, that other ports of the empire are rapidly becoming ports of import and supply to the interior, thus diminishing the monopoly formerly enjoyed by Rio. The various railways from those ports—Santos, (San Paolo,) Bahia, Pernambuco—and the increasing steam-navigation on the Amazon from Para to the interior, give facilities to those ports, which now have direct and independent lines of steamers from England and Germany, and are thus enabled to import directly, and to distribute at lower freights to consumers in the interior.

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Notwithstanding the injury to Rio, therefore, by this change in the channels of commerce, the prosperity of the empire has not been diminished from this cause; and the other ports, especially Santos, are largely increasing their trade and importations.

I am, &c.,

JAMES R. PARTRIDGE.