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 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 (-milreis). Gold is the nominal standard of value, the monetary unit being the gold milreis worth 2s. 2d. 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.

In addition to the indebtedness of the national government, the individual states have also incurred funded debts of their own. The aggregate of these debts in 1904 was £20,199,440, and the several loans made during the next two years, including those of the municipalities of Rio de Janeiro, Santos, Bahia and Manáos, add fully two and a half millions more to the total.

Brazil was discovered in February 1499 (o.s.) by Vicente Yañez Pinzon, a companion of Columbus. He descried the land near Cape St Augustine, and sailed along the coast as far as the river Amazon, whence he proceeded to the mouth of the Orinoco. He made no settlement, but

took possession of the country in the name of the Spanish government, and carried home, as specimens of its natural productions, some drugs, gems and Brazil-wood. Next year the Portuguese commander, Pedro Alvares Cabral, appointed by his monarch to follow the course of Vasco da Gama in the East, was driven by adverse winds so far from his track, that he reached the Brazilian coast, April 24, and anchored in Porto Seguro (16° S. lat.) on Good Friday. On Easter day an altar was erected, mass celebrated in presence of the natives, the country declared an apanage of Portugal, and a stone cross erected in commemoration of the event. Cabral despatched a small vessel to Lisbon to announce his discovery, and, without forming any settlement, proceeded to India on the 3rd of May. On the arrival of the news in Portugal, Emanuel invited Amerigo Vespucci to enter his service, and despatched him with three vessels to explore the country. The navigator’s first voyage was unsuccessful; but, according to his own account, in a second he discovered a safe port, to which he gave the name of All-Saints and where he erected a small fort. Vespucci’s narrative is, however, suspected of being apocryphal (see ).

The poor and barbarous tribes of Brazil, and their country, the mineral riches of which were not immediately discovered, offered but few attractions to a government into the coffers of which the wealth of India and Africa was flowing. For nearly thirty years the kings of Portugal paid no further attention to their newly-acquired territory than what consisted, in combating the attempts of the Spaniards to occupy it, and dispersing the private adventurers from France who sought its shores for the purposes of commerce. The colonization of Brazil was prosecuted, however, by subjects of the Portuguese monarchy, who traded thither chiefly for Brazil-wood. The government also sought to make criminals of some use to the state, by placing them in a situation where they could do little harm to society, and might help to uphold the dominion of their nation.

The first attempt on the part of a Portuguese monarch to introduce an organized government into his dominions was made by John III. He adopted a plan which had been found to succeed well in Madeira and the Azores,— dividing the country into hereditary captaincies, and

granting them to such persons as were willing to undertake their settlement, with unlimited powers of jurisdiction, both civil and criminal. Each captaincy extended along fifty leagues of coast. The boundaries in the interior were undefined. The first settlement made under this new system was that of São Vicente Piratininga, in the present province of São Paulo. Martim Affonso de Sousa, having obtained a grant, fitted out a considerable armament and proceeded to explore the country in person. He began to survey the coast about Rio de Janeiro, to which he gave that name, because he discovered it on the 1st of January 1531. He proceeded south as far as La Plata, naming the places he surveyed on the way from the days on which the respective discoveries were made. He fixed upon an island in 24° S. lat., called by the natives Guaibe, for his settlement. The Goagnazes, or prevailing tribe of Indians in that neighbourhood, as soon as they discovered the intentions of the new-comers to fix themselves permanently there, collected for the purpose of expelling them. Fortunately, however, a shipwrecked Portuguese, who had lived many years under the protection of the principal chief, was successful in concluding a treaty of perpetual alliance between his countrymen and the natives. Finding the spot chosen for the new town inconvenient, the colonists removed to the adjoining island of São Vicente, from which the captaincy derived its name. Cattle and the sugar-cane were at an early period introduced from Madeira, and here the other captaincies supplied themselves with both.

Pero Lopes de Sousa received the grant of a captaincy, and set sail from Portugal at the same time as his brother, the founder of São Vicente. He chose to have his fifty leagues in two allotments. That to which he gave the name of Santo Amaro adjoined São Vicente, the two towns being only three leagues asunder. The other division lay much nearer to the line between Parahyba and Pernambuco. He experienced considerable difficulty in founding this second colony, from the strenuous opposition of a neighbouring tribe, the Petiguares; at length he succeeded in clearing his lands of them, but not long afterwards he perished by shipwreck.

Rio de Janeiro was not settled till a later period; and for a considerable time the nearest captaincy to Santo Amaro, sailing along the coast northwards, was that of Espirito Santo. It was founded by Vasco Fernandes Coutinho, who having acquired a large fortune in India, sank it in this scheme of colonization. He carried with him no less than sixty fidalgos. They named their town by anticipation, Our Lady of the Victory (Victoria); but it cost them some hard fighting with the Goagnazes to justify the title.

Pedro de Campo Tourinho, a nobleman and excellent navigator, received a grant of the adjoining captaincy of Porto Seguro. This, it will be remembered, is the spot where Cabral first took possession of Brazil. The Tupinoquins at first offered some opposition; but having made peace, they observed it faithfully, notwithstanding that the oppression of the Portuguese obliged them to forsake the country. Sugar-works were established, and considerable quantities of the produce exported to the mother country.

Jorge de Figueiredo, Escrivam da Fazenda, was the first donatory of the captaincy Ilhéos, 140 m. south of Bahia. His office preventing him from taking possession in person, he deputed the task to Francisco Romeiro, a Castilian. The Tupinoquins, the most tractable of the Brazilian tribes, made peace with the settlers, and the colony was founded without a struggle.

The coast from the Rio São Francisco to Bahia was granted to Francisco Pereira Coutinho; the bay itself, with all its creeks, was afterwards added to the grant. When Coutinho formed his establishment, where Villa Velha now stands, he found a noble Portuguese living in the neighbourhood who, having been shipwrecked, had, by means of his fire-arms, raised himself to the rank of chief among the natives. He was surrounded by a patriarchal establishment of wives and children; and to him most of the distinguished families of Bahia still trace their lineage. The regard entertained by the natives for Caramuru (signifying man of fire) induced them to extend a hospitable welcome to his countrymen, and for a time everything went on well. Coutinho had, however, learned in India to be an oppressor, and the Tupinambas were the fiercest and most powerful of the native tribes. The Portuguese were obliged to abandon their settlement; but several of them returned at a later period, with