The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1868-11-23

the Paraguayan army Is strongly entrenched
behind its Notifications at Villeta, point
on the river about one hundred and fifty
miles above Humaita. One one hundred and
fifty pound gun commands the river and
prevents the passage of all except iron
clads. The low, flooded ground in front of
the works is swept by twenty-one sixty
eight Founders The allied forces are en-
camped four miles southwark, it being as near
as they can approach the fortified point, owing
to the typographical features Of the country.
The Brazilian commander, from his own
report, has little hope of 1anking the position.
IT. however, the Paraguayans are driven from
Villeta they will retire little distance into
the interior, gain strength by the movement
and weaken that Of the allies, who must leave
their IRON clads to follow them.
In military view the chances of allied
success grow less every day. It appears
that this is now fully recognized by the Argen-
tine Republic for we see In clause of the
inaugural address of the new Argentine Presi-
dent the idea that "the war must be continued
with energy. We cannot make peace with
honor so long as Lopez does not ask for II"
This indicates that when Lopez makes another
application for peace it will be entertained by
the Argentine Republic at least, although in
defiance Of the ''secret treaty" made between
the allies when the war commenced. In this
case it will cause the rupture between the Ar
gentine Republic and Brazil which we have
long predicted.
AS for Uruguay, she is now mere cipher,
Brazil herself? Every financial measure
which promises relief for the depleted
imperial treasury is resorted to. The
latest is an issue of gold bonds. These
are offered for sale by the government
for the deprecated paper currency, 50 that
one hundred dollars gold invested In them will
draw an annual interest of nine and one-tenth
per cent and receive one hundred and fifty
eight dollars in gold at the termination Of
thirty-three years. This, however, will not
give the empire much relief In the Issue Of
currency loans to meet the expenses OF the
war they made no provision for the payment
of the interest on them, and the gold bond
issue now proposed is to save the financial
reputation OF the country.
The revenue of Brazil Is to-day estimated
at about twenty live millions gold per annum,
taking into consideration the low price Of her
paper milreis, which form the basis of her
fiscal estimates. Her present expenditures
are about double that amount. The revenue
in 1859 was about twenty millions gold
annually, little in advance OF the expendi
lures al that time. II is thus seen that in the
last ten years Brazil compares very unfavora-
bly, in progress with the Spanish-American
States around her. although they have been
forced to advance in the midst Of revolutions.
The external debt of the country was esti-
mated in 1858 at sixty-fve millions, having
been somewhat decreased in the preceding
ive.years. To-day the debt, external and in
ternal, swes to the enormous figure Of five
hundred and seventy-five millions gold, and
her Paraguayan troubles and expenses far
from ended.
1t is matter Of surprise that Brazil has
been able to sustain herself in such vast ex-
penditure. She possesses no great manuiac-
turing districts. no extensive commercial
marine, no great internal elements Of strength
upon which she can build up mountain Of
debt like this and hope ~ struggle on in the
future, preserving her financial credit. Her
abIest anancier estimates that the expendi-
lures Of the coming year will be double the
revenues. How will the required amount be
raised? The white race; representing only
about one fourth part of the population Of the
empire held all the wealth at the commence
ment Of the war The balance OF the people,
consisting of Indians and slaves, represented
nothing financially except what they could pro-
duce from day to day The wealth has been
almost completely drained from the frst class.
The other classes have had their productive
power shattered by the demands to supply
material of war and men for the army. We have
arrived. therefore, at a mathematical result in
considering the condition of Brazil, aud find
that she is practically almost as exhausted rs
<he little people who are battling against her
al the head waters Of the Paraguay river. No
wonder that the whole north Of Brazil is ready
for revolution and refuses 10 furnish another
man for the war. No wonder that the inn
perial throne shakes under the storm II has
created. Dom Pedro ii. Is lighting as much
for his crown to-day as Is Lopez for the
nationality OF Paraguay. The royalists Of
Brazil have. as the war progressed, been
playing heavier aud heavier stakes, until
the form Of government itself is cast into the
Struggle and hangs for existence upon the
bayonets which CLEAN in the Plata valley.
For Brazil there is evidently no withdrawal
from the contest except through victory.
knowing this. she has steadfastly refused all
offers OF mediation from friendly Powers;
knowing this, the Emperor has already threat
ened 10 resign his crown If the war be discon-