for sending to the port of Lota Swiss, Tyrolese, and German emigrants,
on a principle that may be adopted with benefit in relation to the River
Plate. The emigrants must be provided with good characters, viséd by the
Chilian Consul at Hamburg, and on their arrival at Lota they are to be
sent on to Arauco by the Government, and placed in possession of their
land, according to the terms of the Chilian law lately published. The
colonists are to be furnished with between-deck passages, and they will
be allowed one ton of measurement for every adult, and half a ton for
each person under 12 years, and they are to be treated on board in
conformity with the Hanover Passenger Act. The Government also agree to
pay 40 dollars (£8) for the passage of each adult, and 20 dollars for
each child under 12 years of age. The contract is to last for four
years, and if the scheme should meet with favour in Germany, the
Government agree to contract for 100 families for the first year, 150
for the second, 200 for the third, and 300 for the fourth year, with
liberty to the contractors to exceed these numbers to the extent of 25
per cent. It appears to me questionable whether the contractors can
afford to take emigrants that distance for £8 passage money, but
probably the nature of the land concession is an inducement to families
possessing some means to augment this sum, in which case it becomes a
scheme of assisted passages on terms arranged between the emigrants and
contractors. It is, however, a step in the right direction, which other
Governments will do well to follow.
At Monte Video there is an Emigrant Office under the management of a
respectable committee, where every information is afforded as to
employment, but there is no Home or Asylum. At Buenos Ayres there is a
miserable building on the ground floor, called an Asylum, where
emigrants are allowed to remain four days. It seems to have been
formerly a large stable, and is indeed more fit for horses than human
beings. It wants both ventilation and cleanliness, the latter at all
events easy to provide, but, considering the vast importance of
emigration to the country, a more appropriate place might be maintained
at very moderate cost. It is not necessary, nor desirable, that
emigrants should on landing find themselves so comfortable as to care
little about removing, but there is a medium between this and the dirty
place open to them at present. Of course the sooner the emigrants are
sent off to the locality where their labour is required the better.
If ever there was a time when sheep farming ought to offer advantages to
new comers it is the present, when the value of sheep has fallen so low
that land may be stocked for a very small sum as contrasted with former
years, and land itself can be bought or rented at considerably less than
formerly. This has inflicted great loss upon the older residents; indeed
the result has been sometimes so disastrous that sheep farmers here and
there are giving it up altogether, and others putting as much of their
land as possible under tillage. Everything is therefore in favor of new
settlers who may choose to try their fortunes in this particular line,
only they must make up their minds to rough it for a few years, and be
content with a life in the campo.
The consumption of an article like wool can never be subject to any
lengthened depression, and with railway facilities there will be
increased means for utilising the carcasses of sheep, by boiling down,
or otherwise disposing of them. On the other hand, in the ordinary
course of things, more land will be put under cultivation, and
agriculture as well as sheep farming is destined to play an important
part in the commercial history of the River Plate.
As I have already remarked, the want of population is the great drawback
under which this country now suffers, and is an impediment to progress
in every way. This can only be remedied by emigration receiving the
direct aid as well as the encouragement of Government. It is not
sufficient that a few stray people find their way up the country, but
centres of population and labour should be formed in the most productive
parts of every province, which would lead to agricultural progress, and
eventually to the formation of new towns and cities. The mere extension
of existing cities will never bring solid wealth to the Argentine
Confederation, nor develop political stability.
RAILWAYS IN BRAZIL.
Unfortunately the promoters of railway enterprises in Brazil, entered
into with British capital, have looked more to the guaranteed interest
offered by the Government upon the money to be expended than to
legitimate sources of traffic, out of which a dividend might be earned.
All the Brazilian Railways, with the exception of the little Mauá, at
Rio de Janeiro, and to which reference is made in my former book, have
been created since 1853, the first in order and time being the Recife,
or Pernambuco, about which there has been so much controversy between
the Company and the Government. Before submitting any comments of my
own, I will quote the following from the report lately issued by the
Minister of Public Works, Senhor Dantas, upon this and the other lines.
The document is official, and therefore worthy of reliance:—
The annexed gives the length, receipts, and expenses of the railways
in 1867. The receipts and expenses of the S. Paulo Railway include
only nine and a half months:—
Name. Kilos. Receipts. Expenses.
D. Pedro II 197.4 2,523:796$781 1,117:034$992
S. Paulo 139.0 1,236:423 702 305:140 286
Pernambuco 124.9 599:331 445 414:772 537
Bahia 123.5 263:323 292 517:870 760
Gantagallo 49.1 709:222 555 365:830 300
Mauá 17.5 297:595 347 172:297 628
————— ————————————— —————————————
Total 651.6 5,599:693 122 2,892:955 503
These figures leave a balance of 2,706:737$610 over the cost of
working.
D. PEDRO II. RAILWAY.
With the Macacos branch the length of this railway is 203
kilometres, 56.6 kilometres having been added during last year in
its prolongations towards the station of Entre Rios. Failing to come
to an agreement with the Companhia Mineira for the extension to
Porto Novo da Cunha, an offer was made by the Companhia Uniao e
Industria to construct a cart road to that point, the final offer of
this Company being to make it gratuitously if certain favours were
conceded to it. However, its offers were declined, as a cart road
was judged incompatible with the requirements of the railway. Under
these circumstances, as the state of the finances did not permit the
contracting for the extension, orders were issued to give it a
commencement by administration; and at the present time the works of
the first miles are tolerably advanced.
A proposition to construct and work the fourth section has been
received from capitalists and planters of the district it would
serve, and it is now awaiting solution.
The competition between the railway and the Uniao e Industria road
being prejudicial to both, the directory of this road has proposed
bases for a compromise as under:—The Uniao e Industria road company
to give up all its traffic between its station of Posse and Rio,
receiving as compensation certain advantages, the principal one
being the duration of its contract for twelve years, and the receipt
of 120 rs. on every arroba transported on the railway between Entre
Rios and Rio, which, it is estimated, would give the company
324:000$ annually, and transfer traffic of 2,700,000 arrobas, or
1,000:000$ annually, to the railway. In order to facilitate this
transaction the company proposes to lease the railway for twelve
years and pay a dividend of four per cent. to the Government. It
also proposes to make any extension determined on, that to Porto
Novo to be finished in five years, the Government to furnish the
money, and the company to receive no compensation for its trouble
except what would arise from the 120 reis the arroba upon the
traffic over the line from Entre Rios and Rio. On the completion of
the Porto Novo branch, the company would receive 2,000:000$ out of
the profits over the four per cent. dividend as indemnity for any
loss, rights or advantages secured to it by the contract of October
29, 1864, and it would then commence the construction of the railway
through the valley of the Parahybano towards the Serra of
Mantiqueira, using for this purpose four-fifths of the net revenue
received from the railway, one-fifth remaining for the company, this
continuing until the end of the twelve years, and the company
binding itself to make, at its own cost, the branch from Juiz de
Fora to the railway station of Uba. If, however, the Government
judge it better to construct a system of macadamised cart roads,
centering at Entre Rios, the company will then pay six per cent. on
the railway, and will construct within four years, twenty leagues of
road to Porto Novo da Cunha, and on to Barra do Pomba, and will,
within six years, macadamise the Serraria road as far as Mar de
Hespanha, the road from the Parahybuna station to Flores, and that
from the Uba station to Juiz de Fora; making also, during the last
six years of the contract, the road to Barbacena, following as much
as possible the trace drawn for a railway, and prolonging it to S.
Joao de El Rei. Besides, the company will settle 2,000 families of
colonists along the road from Uba to Juiz de Fora, and on that
between Juiz de Fora, Barbacena, and S. Joao de El Rei. The company
also binds itself to keep in order all the cart roads in
construction, transporting freight and passengers on them at the
rates provided for the Uniao e Industria road; and, in addition, to
deliver up to the Government, at the end of the twelve years, the
railway and roads in good condition.
Three proposals have been made for the prolonging of the railway to
the waterside; that of the engineers, Senhors Bulhoes and Passos,
proposes to bring the line to the Praia da Gambôa, and there
construct large warehouses and furnish all facilities for shipping
and landing goods; that of Senhor F. B. Jansen Lima and others
proposes to pass by a tunnel through the Livramento Hill to the
Praia da Saude; that of Senhor Feliciano José Henrique proposes to
connect the Santa Anna station with the principal parts of the city
wherein goods are now stored.
The capital employed in the railway having been 27,525:957$816 upon
the 31st of December last, its net income of 1,422:434$402 during
the last year represents a dividend of 5.16 per cent. upon its cost,
which percentage should, when the Entre Rios traffic assumes a
normal condition, rise to six per cent. in view of the greater
number of stations now open, and if the Uniao e Industria freights
pass over the line there can be no doubt that the percentage will
exceed seven per cent. per annum.
The following table shows the progress of the railway since its
commencement. The Macacos branch is excluded, it not existing in the
first years:—
Year. Working. Revenue. Per Cent.
1859 606:870$492 720:900$443 84.18
1860 611:402 672 920:765 784 66.40
1861 688:506 150 1,073:731 050 64.12
1862 800:934 211 964:996 982 82.99
1863 849:421 671 969:621 542 87.60
1864 964:199 300 1,211:615 205 79.57
1865 1,088:133 594 1,756:148 520 61.96
1866 834:057 521 1,848:783 351 45.11
1867 1,082:283 327 2,506:836 961 43.17
Net revenue of 1867 1,422:434$402
The stations opened during 1867 were:—Uba on May 5, Parahyba do Sul
on August 11, Entre Rios on October 13.
BAHIA RAILWAY.
The shareholders of this railway continue to suffer the consequences
produced by the excess of expenses over receipts. Last year's
balance showed an increase of 12:867$764 in receipts, and of
24:383$445 in expenses, giving a deficit of 218:630$092, more by
11:515$681 than the preceding year's.
This result is no doubt disheartening, but meantime I await the
report of the commission I authorised the President of the province
to appoint, whose investigations must have revealed the latent
causes of this state of things, in order to take such measures as
may be recommended for the purpose of placing the enterprise on the
footing reclaimed by its and the public treasury's interests.
The construction of the feeding roads judged necessary for the
improvement of the traffic could not be carried on rapidly owing to
the financial condition of the province.
The register of cattle established at Alagoinhas is estimated to
give the railway a further traffic of 24,000 bullocks and to augment
the receipts by 40:000$.
In my opinion, however, the only measure which can save the capital
employed in the railway is its prolongation, but unfortunately those
causes subsist which counselled me to postpone surveys for the
prolonging of this and the other railways, with the exception of the
Dom Pedro II. line, whose existing conditions are different.
The debt of the Province of Bahia to the National Treasury for
advances on account of the Two per Cent Guarantee was estimated at
1,516:862$220 up to the first half of last year, and at present must
be more than 2,000:000$.
PERNAMBUCO RAILWAY.
Notwithstanding the elements of prosperity which the company already
counts on, and those which the future reserves for it, its financial
position is not at present satisfactory, nor have its shares been able
to obtain in London quotations worthy of the destinies awaiting it. To
such result that false position has contributed, besides other things,
in which the company has been placed by the various operations through
which the company sought to obtain its capital. As you know, part of
this capital enjoys the guarantee of interest, another part was obtained
by a loan effected by the Imperial Government, and finally, a third
fraction, furnished by the shareholders, runs the risk of not realising
the least return for a long time. The question of the increase of
guaranteed capital, in discussion between the Imperial Government and
the company, must indubitably have aided in augmenting the
embarrassments in which the company flounders. It would be very proper
to put an end as soon as possible to every question delaying the
prosperity of an enterprise whose capital has contributed largely to the
development and riches of the Province of Pernambuco. It is needful to
give a definite settlement to that question of the increase of the
guaranteed capital of this railway which has been submitted to your
deliberation. The directory in London is constantly reiterating its
reclamations for a final decision. As we do not possess the needful
means for undertakings of this kind, it is of much importance to us that
foreign capital, which comes to try and to explore, may obtain
advantages that may encourage other enterprises.
On the other hand, it is of very great interest to the State that
companies which enjoy a guarantee of interest may prosper in such a mode
as to dispense with the guarantee. The company having to meet the next
payment of debenture bonds, whose time was ending, and neither having
funds in hands for it nor the power of raising them in London, it
recurred to the Imperial Government, asking for a loan of £40,000, but
this the Government could not grant, as it was not duly authorised.
The question of the prolongation to the city of Recife has occupied my
attention, especially since the engineer of the company presented the
plans and estimates for the realisation of the project. According to
them the direction of the line should run parallel to the streets of
Santa Rita, Nova, and Praia, and the cost is estimated at £5,000.
Although the company comprehends the advantage it should obtain by
this prolongation it is not disposed to undertake the works without
a guarantee on the capital expended, or without some other pecuniary
assistance. The advantages which this work will produce for the
agriculture and commerce of the province, and the small sacrifice
which its execution asks from the public coffers dispose me
favourably towards it, and if, as I hope, the examinations I ordered
into those plans and estimates do not change my opinion, I will at a
proper time authorise a contract for this improvement.
In accordance with the dispositions of the law I authorised the
Imperial Legation in London to lend the sum of £15,000 to the
company, to be employed in increasing the rolling stock. The company
proposing, however, to accept the loan without interest, and to
amortise the principal with the excess of revenue over seven per
cent., I declared the proposal inacceptable.
The revenue diminished by 47:917$011 from that of the preceding
year, it coming to 599:331$445. The expenses on the contrary rose
from 364:134$259 in 1866 to 414:772$537, an increase of 50:638$270
occurring therefore in 1867. This double result is partly explained
by the diminution of the traffic in consequence of bad harvest in
the localities profiting by the road, and partly by the need to
promptly carry out the repairs of the road. Although it is desirable
that this result had not occurred, it should not suscitate serious
apprehensions for the future of the railway.
SANTOS AND JUNDIAHY RAILWAY.
This line was inaugurated on the 15th, and opened on the 16th of
February, 1866: this road at once commenced to show an extensive
traffic, which, augmenting day by day as the planters became
convinced of its superiority over ordinary methods, prognosticates
most brilliant destinies to it. However, notwithstanding its evident
inferiority, the common road still maintains a serious competition
with the railway and takes from it a part of the products which are
sent to Santos from the interior, inasmuch as, out of 1,004,779
arrobas, at which amount the total traffic is estimated, 611,818 go
by the railroad, and 392,961 by the highway. Despite this
competition, and the difficulties with which every enterprise
struggles at first, however well organised, the gross receipts of
the Santos and Jundiahy railway, since its opening, up to the end of
1867, rose to 1,236:423$702, thus giving more than 4¾ per cent. upon
the capital employed. It maybe presumed that, when the short life
competition referred to is overcome, and when the line is extended
to Campinas, taking into account the natural increase of production
in a province so favourably placed, the revenue would soon double,
thus freeing the treasury from the onus of the guarantee of
interest. The Santos and Jundiahy Railway is, therefore, one of
those amongst us which promise best; and perhaps it may be
considered the first industrial undertaking of the kind, if the
serra service, by means of inclines, does not exact a constant
outlay which will diminish the revenue.
During the past year the trains of the road transported 176,081
passengers, namely:
1st Class 19,078½
2nd Class 26,033½
3rd Class 130,952
Season tickets 17
————————
Total 176,081
The plan of Engineer P. Fox for the extension of the line to
Campinas having received the preference over the other traces
presented to the ministry in my charge, the President of the
province undertook to promote a company of planters and capitalists
to carry this important benefit into effect. The company having the
right of preference to the extension of the railway, I instructed
our Minister in London to obtain an explicit declaration from the
directory renunciatory of its right, in order that there might be no
future doubts or reclamations. The directors replied that the
company expressly desisted from the right, and, therefore, the
association could proceed with its measures for the realisation of
its object. In the opinion of Engineer E. Viriato de Medeiros the
amount of capital expended up to the 30th of July, 1866, amounted to
£2,548,434, but for payment of interest due it was estimated
hypothetically at £2,650,000.
The provincial assembly not having empowered the President to pay
the interest of two per cent. upon the guaranteed capital, to which
the province had bound itself, it was necessary for the national
treasury to take upon itself the satisfaction of the provincial
promise. It is therefore requisite that the provincial assembly
provide in the estimate of this year for relieving the public
treasury from the charge upon its already too burdened coffers.
It will be seen from these reports that all the guaranteed railways are
exposed to difficulties arising out of the special character of the
relations existing between the various companies and the Government, and
that Senhor Sobragy, the talented manager of the Dom Pedro Segundo
Railway, has been sent to England to try to come to terms with the
companies. In my opinion, however, nothing short of the Government
taking over the railways, giving in exchange a guaranteed stock, can
ever meet the requirements of the case, or bring these concerns out of
their present unfavourable position. It would be useless to recapitulate
here the causes of their failure. Certainly no fault can be laid to the
charge of the Government, which has acted in perfect good faith towards
them, and done probably more than any other Government ever did or would
do to assist undertakings of this or any other kind. Rashness,
ignorance, and bad advisers have led to most of their difficulties, and
with such proofs of the mismanagement of railway directors on our home
lines no one will be surprised at the unsuccessful result of their
management of lines abroad.
As an evidence that railways can be made and properly managed by
Brazilians I need only refer to the Dom Pedro Segundo, a line quite as
important as any in the country. In separate chapters I have referred to
this railway, and also to that in the province of San Paulo.
I believe it would be greatly to the advantage of the rising generation
in Brazil if the young men were trained to become engineers, rather than
lawyers or doctors, with which the towns and cities swarm. Brazilians
are neither deficient in talent nor energy, if properly brought out, and
the employés of the Dom Pedro Segundo are chiefly natives. The splendid
road to Juiz de Fora furnishes an example of this, and I regret time did
not permit me to make another visit there, which Senhor Mariano very
kindly urged on me. Had it not been for the heavy expenditure of the
Paraguayan war, the railway system of Brazil would doubtless have been
much more extensively developed, and the provincial lines now in
existence carried further into the interior, as it is impossible the
latter can ever be productive of much revenue, or of much national
benefit until they are prolonged to the chief centres of cultivation,
which, as a general rule, lie upwards of one hundred miles from the
coast. The provinces of Pernambuco and Bahia both attach great
importance to railway extension to the river San Francisco, but it does
not appear from the report of Captain Burton, who lately explored that
river, that it is likely to yield so much traffic as is supposed. The
want of population is the great drawback to railways, and until this
want can be met by emigration of some kind, a large amount of internal
wealth must lie waste.
My long detention in the southern part of Brazil and the River Plate
prevented me visiting Bahia and Pernambuco, and judging from personal
observation as to the state and condition of the railways there, or
reporting on the new tramway from Caxioera to the interior, which
promises to be of great utility to the country traversed by it, as well
as remunerative to the shareholders interested in its future.
COMMERCE OF BRAZIL AND THE RIVER PLATE.
During the unfruitful dominion of Spain and Portugal, commerce with
South America was limited to the exchange of commodities between the
mother countries and the populations planted in the New World revealed
to Europe by the daring genius of the great Genoese navigator and those
bold spirits who after him traversed and explored strange oceans and
seas unknown. The Courts of Madrid and Lisbon adopted the most stringent
measures for the preservation of their monopoly and to prevent
commercial intercourse with their colonies by the subjects of foreign
States. So successful were the means taken to this end that very little
was known with certainty in England concerning those immense regions
until after the War of Independence freed them from the yoke under which
they had so long groaned. I need not in this place indicate all the
causes that led to this great revolution, but there can be no doubt the
example of our own American colonists and the principles disseminated by
the French Revolution exercised a potential influence in stirring the
South American communities to liberate themselves from the oppressive
restrictions with which they were fettered.