vice of the national debt absorbs a very large part of the
expenditure, about 45% of the estimates for 1907 being assigned to the
department of finance. The department of industry, communications and
public works takes the next highest proportion, but about half its
expenditures are met by special taxes, as in the case of port works
and railway inspection, and by the revenues of the state railways,
telegraph lines and post office. The depreciation and unstable
character of the paper currency render it difficult to give a clear
statement of receipts and expenditures for a term of years, the
sterling equivalents often showing a decrease, through a fall in the
value of the milreis, where there has been an actual increase in
currency returns. This was most noticeable between 1889 and 1898, when
exchange, which represents the value of the milreis, fell from a
maximum of 27-3/4 pence (27d. being the par value of the milreis) to a
minimum of 5-5/8 pence. Since 1898 there has been an upward movement
of exchange, the average rate for 1905 having been very nearly 16
pence. In this period the increase in the sterling equivalents would
be proportionately greater than that of the currency values. The gold
and currency receipts and expenditures for the six years 1900 to 1905,
inclusive, according to official returns, were as follows:--

+------+---------+---------------------------+--------------------------+
| | Average | Revenue. | Expenditure. |
| Year.| Rate of +-------------+-------------+------------+-------------+
| |Exchange.| Gold | Currency | Gold | Currency |
| | Pence. | Milreis. | Milreis. | Milreis. | Milreis. |
+------+---------+-------------+-------------+------------+-------------+
| 1900 | 9.50 | 49,955,522 | 263,687,253 | 41,892,150 | 372,753,986 |
| 1901 | 11.38 | 44,041,302 | 239,284,702 | 40,493,241 | 261,629,212 |
| 1902 | 11.97 | 42,904,844 | 266,584,912 | 34,574,643 | 236,458,862 |
| 1903 | 12 | 45,121,844 | 327,370,063 | 48,324,642 | 291,198,960 |
| 1904 | 12.28 | 50,566,572 | 342,782,191 | 48,476,413 | 352,292,147 |
| 1905 | 15.89 | 64,207,004 | 243,355,396 | 51,606,272 | 265,699,281 |
+------+---------+-------------+-------------+------------+-------------+

Reducing gold to a currency basis at 15d. per milreis (the offici