The strength of the army is determined annually by congress, but every able-bodied citizen is nominally liable to military service. Its peace footing in 1898 was 1000 men. After the war of 1899-1903 its strength was successively reduced to 10,000 and 5000, a part of this force being employed in the useful occupation of making and repairing public roads. The navy in 1906 consisted of only three small cruisers on the Caribbean coast, and two cruisers, two gunboats, one troopship and two steam launches on the Pacific. There was also one small gunboat on the Magdalena.

Education.—Although Bogotá was reputed to be an educational centre in colonial times, so slight an influence did this exert upon the country that Colombia ended the 19th century with no effective public school system, very few schools and colleges, and fully 90% of illiteracy in her population. This is due in great measure to the long reign of political disorder, but there are other causes as well. As in Chile, the indifference of the ruling class to the welfare of the common people is a primary cause of their ignorance and poverty, to which must be added the apathy, if not opposition, of the Church. Under such conditions primary schools in the villages and rural districts were practically unknown, and the parish priest was the only educated person in the community. Nominally there was a school system under the supervision of the national and departmental governments, but its activities were limited to the larger towns, where there were public and private schools of all grades. There were universities in Bogotá and Medellin, the former having faculties of letters and philosophy, jurisprudence and political science, medicine and natural sciences, and mathematics and engineering, with an attendance of 1200 to 1500 students. The war of 1899-1903 so completely disorganized this institution that only one faculty, medicine and natural sciences, was open in 1907. There were also a number of private schools in the larger towns, usually maintained by religious organizations. The reform programme of President Reyes included a complete reorganization of public instruction, to which it is proposed to add normal schools for the training of teachers, and agricultural and technical schools for the better development of the country’s material resources. The supreme direction of this branch of the public service is entrusted to the minister of public instruction, and state aid is to be extended to the secondary, as well as to the normal, technical and professional schools. The secondary schools receiving public aid, however, have been placed in charge of religious corporations of the Roman Catholic Church. The expenditure on account of public instruction, which includes schools of all grades and descriptions, is unavoidably small, the appropriation for the biennium 1905-1906 being only £167,583. The school and college attendance for 1906, according to the president’s review of that year, aggregated 218,941, of whom 50,691 were in Antioquia, where the whites are more numerous than in any other department; 4916 in Atlantico, which includes the city of Barranquilla, and in which the negro element preponderates; and only 12,793 in the federal district and city of Bogotá where the mestizo element is numerous. Although primary instruction is gratuitous it is not compulsory, and these figures clearly demonstrate that school privileges have not been extended much beyond the larger towns. The total attendance, however, compares well with that of 1897, which was 143,096, although it shows that only 5% of the population, approximately, is receiving instruction.

Religion.—The religious profession of the Colombian people is Roman Catholic, and is recognized as such by the constitution, but the exercise is permitted of any other form of worship which is not contrary to Christian morals or to the law. There is one Protestant church in Bogotá, but the number of non-Catholics is small and composed of foreign residents. There has been a long struggle between liberals and churchmen in Colombia, and at one time the latter completely lost their political influence over the government, but the common people remained loyal to the Church, and the upper classes found it impossible to sever the ties which bound them to it. The constitution of 1861 disestablished the Church, confiscated a large part of its property, and disfranchised the clergy, but in 1886 political rights were restored to the latter and the Roman Catholic religion was declared to be the faith of the nation. The rulers of the Church have learned by experience, however, that they can succeed best by avoiding partisan conflicts, and the archbishop of Bogotá gave effect to this in 1874 by issuing an edict instructing priests not to interfere in politics. The Church influence with all classes is practically supreme and unquestioned, and it still exercises complete control in matters of education. The Colombian hierarchy consists of an archbishop, residing at Bogotá, 10 bishops, 8 vicars-general, and 2170 priests. There were also in 1905 about 750 members of 10 monastic and religious orders. There were 270 churches and 312 chapels in the republic. Each diocese has its own seminary for the training of priests.

Finance.—In financial matters Colombia is known abroad chiefly through repeated defaults in meeting her bonded indebtedness, and through the extraordinary depreciation of her paper currency. The public revenues are derived from import duties on foreign merchandise, from export duties on national produce, from internal taxes and royalties on liquors, cigarettes and tobacco, matches, hides and salt, from rentals of state emerald mines and pearl fisheries, from stamped paper, from port dues and from postal and telegraph charges. The receipts and expenditure are estimated for biennial periods, but it has not been customary to publish detailed results. Civil wars have of course been a serious obstacle, but it was announced by President Reyes in 1907 that the revenues were increasing. For the two years 1905 and 1906 the revenues were estimated to produce (at $5 to the £1 sterling) £4,203,823, the expenditures being fixed at the same amount. The expenditures, however, did not include a charge of £424,000, chiefly due on account of war claims and requisitions. During the first year of this period the actual receipts, according to the council of the corporation of foreign bondholders, were $9,149,591 gold (£1,829,918) and the payments $7,033,317 gold (£1,406,663). It was expected by the government that the 1906 revenues would largely exceed 1905, but the expectation was not fully realized, chiefly, it may be assumed, because of the inability of an impoverished people to meet an increase in taxation. An instance of this occurred in the promising export of live cattle to Cuba and Panama, which was completely suppressed in 1906 because of a new export tax of $3 gold per head. Of the expenditures about one-fourth is on account of the war department.

The foreign debt, according to the 1896 arrangement with the bondholders which was renewed in 1905, is £2,700,000, together with unpaid interest since 1896 amounting to £351,000 more. Under the 1905 arrangement the government undertook to pay the first coupons at 2½% and succeeding ones at 3%, pledging 12 to 15% of the customs receipts as security. The first payments were made according to agreement, and it was believed in 1907 that the succeeding ones, together with one-half of the unpaid interest since 1896, would also be met. It is worthy of note that this debt, principal and accumulated interest, exceeded six and a half millions sterling in 1873, and that the bondholders surrendered about 60% of the claim in the hope of securing the payment of the balance. It is also worthy of note that Panama refused to assume any part of this debt without a formal recognition of her independence by Colombia, and even then only a sum proportionate to her population. The internal debt of Colombia in June 1906 was as follows:—

Consolidated5,476,887 dollars silver,
Floating 2,345,658 dollars gold.

Whether or not this included the unpaid war claims was not stated.

Money.—The monetary system, which has been greatly complicated by the use of two depreciated currencies, silver and paper, has been undergoing a radical reform since 1905, the government proposing to redeem the depreciated paper and establish a new uniform currency on a gold basis. The paper circulation in 1905 exceeded 700,000,000 pesos. The issue began in 1881 through the Banco Nacional de Colombia, its value then being equal to that of the silver coinage. Political troubles in 1884-1885 led to a suspension of cash payments in 1885, and in 1886 Congress made the notes inconvertible and of forced circulation. In 1894 the Banco Nacional ceased to exist as a corporation, and thenceforward the currency was issued for account of the national treasury. On October 16, 1899—the outstanding circulation then amounting to 46,000,000 pesos,—the government decreed an unlimited issue to meet its expenditures in suppressing the revolution, and later on the departments of Antioquia, Bolívar, Cauca, and Santander were authorized to issue paper money for themselves. This suicidal policy continued until February 28, 1903, when, according to an official statement, the outstanding paper circulation was:—

Pesos.  
National government issues600,398,581 
Department of Antioquia35,938,495.60
  ”  ” Bolívar18,702,100 
  ”  ” Cauca44,719,688.70
  ”  ” Santander750,000 
——————
700,598,865.30

So great was the depreciation of this currency that before the end of the war 100 American gold dollars were quoted at 22,500 pesos. The declaration of peace brought the exchange rate down to the neighbourhood of 10,000, where it remained, with the exception of a short period during the Panama Canal negotiations, when it fell to 6000. This depreciation (10,000) was equivalent to a loss of 99% of the nominal value of the currency, a paper peso of 100 centavos being worth only one centavo gold. International commercial transactions were based on the American gold dollar, which was usually worth 100 pesos of this depreciated currency. Even at this valuation, the recognized outstanding circulation (for there had been fraudulent issues as well) amounted to more than £1,400,000. In 1903 Congress adopted a gold dollar of 1.672 grammes weight .900 fine (equal to the U.S. gold dollar) as the monetary standard created a redemption bureau for the withdrawal of the paper circulation, prohibited the further issue of such currency, and authorized free contracts in any currency. Previous to that time the law required all contracts to specify payments in paper currency. Certain rents and taxes were set aside for the use of the redemption bureau, and a nominally large sum has been withdrawn from circulation through this channel. On the 1st of January 1906, another monetary act came into operation, with additional provisions for currency redemption and improvement of the monetary system. A supplementary act of 1906 also created a new national banking institution, called the Banco Central, which is made a depository of the public revenues and is charged with a considerable part of their administration, including payments on account of the foreign debt and the conversion of the paper currency into coin. The new law likewise reaffirmed the adoption of a gold dollar of 1.672 grammes .900 fine as the unit of the new coinage, which is:—