taken by Mr. Weinberger at 75 per cent., and to bear 6 per cent. interest, payable half-yearly. The Bonds to be secured on 25 per cent. of the Customs receipts on the Atlantic coast, and to be redeemed in five instalments of $200,000 gold each, payable every five years.

CUSTOMS LEGISLATION, 1904.

In May, 1904, a Decree was promulgated providing that as from the 14th June the import duties were to be paid in gold at the rate of $1 gold to $5 currency.

EXCHANGE.

The average monthly rate of exchange during 1902 and 1903 is shown below: the figures must only be regarded as approximate :

The following Table gives the highest and lowest prices of the Bonds of the External Debt each year since the issue of the Loan :

In his Special Report for 1903 to the President, the Minister of Finance gives the following figures with regard to the value of Imports and Exports in 1903:—

Imports
Exports

$ Gold. $ Currency. 2,419, 503.87 at 680 % exchange, 16,452,626.31 21,877,097.69

Excess of Exports

5,424,471.38

The Exports included Coffee to the value of $7,140,963. As compared with 1902 the value of Imports had increased by $249,993 gold, and that of the Exports by $11,246,244

currency.

Amount of Guarantee due from Government to Paraguay Central Railway, 30th April, 1904, (subject to adjustment)

External Debt, per head (exclusive of Railway Guarantee)...

1871.-Eight per Cent. Loan. £1,000,000, issued by Messrs. Robinson, Fleming & Co., at 80 per cent. Sinking Fund, 2 per cent.

1872. Eight per Cent. Loan. £2,000,000, issued by Messrs. Robinson, Fleming & Co., at 85 per cent. Accumulative Sinking Fund, 2 per cent.

1874.-Both Loans went into default.

1875. These Loans were a subject of inquiry by the Parlia mentary Committee of 1875. Of the second Loan, about £1,400,000 was repurchased by the Government Agents. All interest paid came out of the proceeds of the Loans; none was provided by the country.

1885.-Terms were arranged between the Government and the Bondholders' Committee acting with the Council as follows:

(1.) Reduction of the outstanding principal of the Debt by 50 per cent.

(2.) Interest on the reduced Debt at 2 per cent. for 5 years, 3 per cent. for the next five years, and 4 per cent. thereafter together with a Sinking Fund of per cent. from the eleventh year (June, 1896).

(3.) An assignment of 500 square leagues (equal to 2,177,344 acres) of good and suitable public lands in full payment of the arrears of interest from the default to the 1st July, 1886, amounting to £1,306,217.

The amount of New Bonds to be issued in exchange for £1,505,400 of the Loans of 1871 and 1872 outstanding was £850,000. This amount covered the expenses of conversion,

etc., and the balance was subsequently handed over to the Paraguay Central Railway Company against arrears of guarantee.

LAND WARRANTS.-These were issued in the proportion of 830,000 square varas (about 145 acres) of land to each holder of £100 nominal value of unpaid Coupons.

1888. The Paraguay Land Company was formed to deal with the Land Warrants with a Capital of £250,000 in Shares of £5. The Company issued two fully-paid Shares for each £100. Warrant. The Warrant-holders provided working Capital in the form of 5 per cent. Debentures to the amount of £61,710. The name of the Company was altered in 1889 to that of Anglo-Paraguayan Land Company. It has since been reconstructed, and the Capital reduced.

1892.-The Coupons due 1st July went into default.

1893. The Government proposed to issue 4 per cent. Moratorium Bonds in payment of interest in arrear, these Bonds to be secured by a special tax on "Yerba Maté," and the Committee intimated that they would be prepared to recommend this proposal to the Bondholders. The Arrangement was unanimously passed by the Chamber of Deputies in July, 1893, but was thrown out by the Senate in the following September.

1895-6.—An ad referendum Arrangement was concluded in August, 1895, between the Executive Government and Mr. H. L. White, the Bondholders' Agent at Asuncion. The terms proposed were accepted by the Bondholders, but at the same time the Government were asked to increase the rate of interest and give better security. This they declined to do, and in April, 1896, Congress ratified the Arrangement of August, 1895. The chief provisions of this Arrangement

are:

(1.) Interest on the 1886 Bonds to be reduced as follows:For the first three years from 1st January, 1896, to I per

cent. per annum.

For the next three years to 1 per cent. per annum.

Thenceforwards till the extinction of the Debt, to 3 per

cent. per annum.