External debt: £ s. d. Loans of 1883, 1888 and 1889. 26,478,500 Oestede Minas R.R. loan 3,388,100 Loan of 1898 7,331,600 Funding loan of 1898 8,613,717 9 9 Railway rescission loan of 1901 15,467,015 16 1 Port works loan of 1903 8,500,000 ------------------- £69,778,933 5 10 ===================
Internal debt, funded: Milreis 5 % apolices, Law of 1827 483,546,600 4½% " " 1879 20,548,000 6 % " " 1897 37,082,000 5 % " " 1903 17,300,000 ----------- Total, funded 558,476,600 (at 15d. £34,904,787) ===========
Internal debt, not funded: Milreis Paper money 664,792,960 Savings bank and other deposits: In paper 246,812,407 In gold, 19,053,861 r (say) 34,296,950 Floating indebtedness (a/cs current, bills, &c.) ? ----------- Total, not funded, approx. 945,902,317 (at 15d. £59,118,895 stg.) ===========
Approximate total indebtedness £163,802,675
In addition to these, the government was still responsible for interest guarantees on fourteen railways, or sections of existing lines, with an aggregate capital of about £4,900,000 held in Europe and 12,055,440 milreis held in Brazil, on which the national treasury paid in interest £191,324 and 1,398,493 milreis.
The paper currency of Brazil consists of both treasury issues and bank-notes, the latter issued under government supervision. Its fluctuations in value have been not only a serious inconvenience in commercial transactions, but also the cause of heavy loss to the people. Under the provisions of the funding loan of 1898 a scheme for the withdrawal of the paper money was carried into effect, and by the end of December 1906 the amount in circulation had been reduced from 788,364,614 ½-milreis (the outstanding circulation 31st August 1898) to 664,792,960 ½-milreis. Two funds were created for the redemption and guarantee of paper issues, the latter receiving 5% of the import duties payable in gold. Up to 1906 the Caixa da Amortisação (redemption bureau), which has charge of the service of the internal funded debt, superintended the redemption of the currency, but in that year (December 6, 1906) a Caixa de Conversão (conversion bureau) was created for this special service. It is modelled after the Argentine Conversion office, and is authorized to issue notes to bearer against deposits of gold at the rate of 15 pence per milreis although exchange was above 17d. when the scheme was proposed. The notes are to be redeemable in gold at sight, the Caixa de Conversão to keep the gold paid in for that express purpose. The coffee producers of São Paulo and other states found that the appreciation in value of the milreis was reducing their profits, and they advocated this measure (at first with a valuation of 12d.) to check the upward movement in exchange. Metallic money is limited to nickel and bronze coins, but in 1906 the government was authorized to purchase bar silver for the coinage of pieces of the denomination of two milreis, one milreis and 500 reis (½-milreis). Gold is the nominal standard of value, the monetary unit being the gold milreis worth 2s. 2½d. at par. The 10-milreis gold piece weighs 8.9648 grammes, 916 fine, and contains 8.2178 grammes of pure gold. There is no gold in circulation, however, and gold duties are paid with gold cheques purchased at certain banks with paper money. The banking facilities of the republic have undergone many changes under the new regime. A fruitful cause of disaster has been the practice of issuing agricultural and industrial loans under government authorization. Commercial business at the principal ports is largely transacted through foreign banks, of which there are a large number.