ust several questions pending
between the empire and the republic of Paraguay, the most important of
which was that of the right of way by the Paraguay river to the interior
Brazilian province of Matto Grosso. This right had been in dispute for
several years. The expedition was not permitted to ascend the river
Paraguay, and returned completely foiled in its main purpose. Though the
discord resulting between the states on account of this failure was
subsequently allayed for a time by a treaty granting to Brazil the right
to navigate the river, every obstacle was thrown in the way by the
Paraguayan government, and indignities of all kinds were offered not
only to Brazil but to the representatives of the Argentine and the
United States. In 1864 the ambitious dictator of Paraguay, Francisco
Solano Lopez, without previous declaration of war, captured a Brazilian
vessel in the Paraguay, and rapidly followed up this outrage by an armed
invasion of the provinces of Matto Grosso and Rio Grande in Brazil, and
that of Corrientes in the Argentine Republic. A triple alliance of the
invaded states with Uruguay ensued, and the tide of war was soon turned
from being an offensive one on the part of Paraguay to a defensive
struggle within that republic against the superior number of the allies.
So strong was the natural position of Paraguay, however, and so complete
the subjection of its inhabitants to the will of the dictator, that it
was not until the year 1870, after the republic had been completely
drained of its manhood and resources, that the long war was terminated
by the capture and death of Lopez with his last handful of men by the
pursuing Brazilians. From its duration and frequent battles and sieges
this war involved an immense sacrifice of life to Brazil, the army in
the field having been constantly maintained at between 20,000 and 30,000
men, and the expenditure in maintaining it was very great, having been
calculated at upwards of fifty millions sterling. Large deficits in the
financial budgets of the state resulted, involving increased taxation
and the contracting of loans from foreign countries.

Notwithstanding this the sources of public wealth in Brazil were
unaffected, and commerce continued steadily to increase. A grand social
reform was effected in the law passed in September 1871, which enacted
that from that date every child born of slave parents should be free,
and also declared all the slaves belonging to the sta