The British investment in Brazilian securities, apart from many enterprises and businesses of a private nature, were reckoned at the commencement of 1916 at £226,719,052, or the equivalent of about $1,133,595,000. The French investment is estimated at Fr. 1,500,000,000 or some $300,000,000, and that of Belgium, with considerable railway interests, at about half this sum; Germany and Portugal also hold a certain quantity of Brazilian securities.
The following are the most important securities represented by the British investment in Brazil; the list shows that it was this money, more than any other element, which contributed to the opening-up of Brazil in the nineteenth century, giving her railways, public utilities, and helping to operate a number of industries. There was no philanthropy about this stream of bright pounds sterling. South American investments were expected to return a better rate of interest than did similar securities in Great Britain, and frequently results justified the hope. The average return on British investments in South America, which altogether total about £1,050,000,000 (say $5,250,000,000) in 1913 was four and seven-tenths per cent; this average dropped to three and one-half in the first year of the European War, a showing which very many profit-earning corporations in other regions of the world would have been glad to equal in that critical time.
| BRITISH INVESTMENTS IN BRAZIL | |
|---|---|
| Railways | |
| Amount invested, 1916 | Name |
| £605,569 | Brazil Great Southern |
| £341,000 | Brazil North Eastern |
| $57,835,200 | Brazil Railways, 5 classes[[20]] |
| £4,187,650 | Great Western of Brazil, 4 classes |
| £15,893,429 | Leopoldina, 6 classes |
| £2,600,000 | Madeira-Mamoré |
| £4,000,000 | Mogyana Sul-Mineira |
| £100,000 | Quarahim International Bridge |
| £6,000,000 | São Paulo (to Santos) |
| £3,175,000 | Sorocabana |
| £900,000 | Southern São Paulo |
| Public Utilities | |
| £1,154,700 | Port of Pará |
| £115,800 | Cantareira Water Co. (S. Paulo) |
| £1,321,900 | City of Santos Improvements, 4 classes |
| £2,003,000 | City of S. Paulo Improvements |
| £1,200,000 | Manáos Harbour and Manáos Improvements |
| £349,000 | Pará Improvements |
| £1,761,875 | Rio de Janeiro City Improvements, 4 classes |
| £1,423,400 | Central Bahia Railway Trust, A and B |
| £275,000 | S. Paulo Gas, 2 classes |
| £2,571,871 | Rio Claro Ry. and Investment, 2 classes |
| £527,800 | Amazon Telegraph, 2 classes |
| £91,000 | Pernambuco Waterworks, 2 classes |
| £596,000 | Manáos Tramways |
| £1,384,449 | Pará Electric, 4 classes |
| $110,361,400 | Brazilian Traction, Light and Power, 2 classes |
| $1,400,000 | Jardim Botanico Tramways |
| $28,013,500 | Rio de Janeiro Tramways, Light and Power, 2 classes |
| $6,821,917 | S. Paulo Tramways, Light and Power, 2 classes |
| $2,000,000 | S. Paulo Electric |
| (The five last mentioned companies are registered in Canada, and the securities are thus issued in dollars, although the stock was largely held in Great Britain and Canada, prior to the European War.) | |
| Industrial Companies | |
| £1,182,400 | Dumont Coffee Estates, 3 classes |
| £120,000 | S. Paulo Coffee Estates |
| £150,000 | Agua Santa Coffee Co. |
| £646,265 | S. Juan del Rey Mining |
| £643,601 | Rio de Janeiro Flour Mills |
| £100,154 | North Brazilian Sugar |
| £100,000 | Mappin and Webb (Rio and S. Paulo) |
| £850,000 | Brazilian Warrant Co. |
At the same time the British share in the total foreign debts of the Federal, State and Municipal governments are estimated at about £150,000,000 out of aggregate obligations of some £180,000,000. These debts are treated in more detail on another page.
There are very many enterprises carried on with British capital which do not figure upon the Stock Exchange, or are branches of businesses which do not differentiate the capital employed in Brazil. Included in one or other of these classes are the shoe factories belonging to Clarke (Glasgow) in São Paulo; the cotton-spinning mills of Coats, also heir of Scotch skill; several cotton cloth mills, as the Carioca in Rio, and others in Petropolis and Campos; sugar factories in Pernambuco, etc. Included also in money investments should be counted the eight and a half million pounds of paid-up capital of the three British banks, the British Bank of South America, the London and Brazilian and the London and River Plate, which total with their branches to twenty-four establishments. It is impossible to say what part of the huge shipping investment serving Brazil should be included, but it is a highly important element and quite the greatest developing factor in Brazilian commerce; the Royal Mail is the great popular passenger and freight line, while Lamport & Holt, Booth, Harrison, the Prince, Johnson, and other smaller lines do a big Brazilian business.
Among firms doing energetic work and with large capital invested are the two great coal firms, Wilson’s and Cory’s, with their depots for Welsh coal, their fleets of lighters, repair equipment, salvage departments and stevedoring; old-established commercial firms such as Stevenson’s and Duder’s in Bahia, chiefly occupied with cacao export—the latter in addition to other activities maintains a fleet of modern whaling boats, and a factory for refining whale-oil; there are the “dry goods” stores of Sloper’s series; the new house of Mappin; the Brack firm in Pernambuco; all these and a score of other classes are not only commercial developers but in a greater or smaller degree employers of Brazilian labour. There are British cattle breeders, sugar and cotton growers, owners of coffee and cacao estates, operators of ironworks, foundries, schools, bookshops, oil-depots, and many other enterprises. The total British investment of money in Brazil cannot be under £300,000,000.
The external debts of the Brazilian States and Municipalities have varied very little since 1913–14. Loans became difficult to obtain from the beginning of Balkan troubles, while since the outbreak of the great European War there have been no additions to cash advances and in only a few cases has there been substantial reduction of debts. On the contrary, most debtor States and cities found it necessary to make funding arrangements by which specie payments were suspended for a number of years—measures which gave temporary relief, but seriously increase the amount of money to be paid annually when the funding period comes to an end.
Certain states, as São Paulo, Rio de Janeiro, Paraná (paid up until the autumn of 1917), Espirito Santo, and the Federal District, have made gallant efforts to avoid piling up debt in this way, and by severe economy have continued to pay interest on their foreign obligations. The sacrifice has not been small, for with depressed exchange it has taken an unusually large number of paper milreis to buy sterling, and at a time when it has not been easy to collect even paper revenues. The effort is all the more creditable.
With the worst part of the 1921 crisis past, state finances have been materially eased by calls for Brazilian products at enhanced prices, and there is a perceptible restoration of confidence, at the end of 1922. In some districts the post-war boom proved an undisguised blessing, bringing profits that could not have been looked for under normal conditions: coffee, hides, rubber, cacao, frozen meat, sugar and manganese, have all brought stimulated prices, and many home industries, such as coal mining and cotton spinning and weaving, have been greatly encouraged.
In round numbers the external debts of the separate states of the Brazilian Union appear to amount to about forty-seven million pounds, with the municipalities adding another twelve or thirteen million pounds.