Pernambuco, or Recife, is the first port at which the transatlantic steamers stop, and it is either here, or at Bahia, that the American traveller down the east coast first sets his foot on Brazilian soil. It is the second city of importance in northeastern Brazil, and the state of Pernambuco, of which it is the capital, is second in importance only to Bahia. Recife is nearer to Europe than any other South American port, and it is usually made the first port of call by the many steamers which ply to that continent. A coral reef extends along the shore, and at a distance of a few hundred feet from it, thus making a natural harbour for vessels that are not of too deep draught; and it is this reef that gives the name to the city, for Recife means a reef. It is a natural wall rising straight up out of the water, on the top of which has been built a low wall of stone. At high tide this wall is generally high enough to keep out the sea. Recife is a busy port and a great shipping port for sugar, as that is the particular product of this state. The influence of the early Dutch colonists here can still be traced in the old buildings. One finds in travelling through Brazil that each state has only one principal production, which supports the people, and the export tax on which provides the government with funds. At one time this state had a monopoly in sugar production and Pernambuco sugar was known the world over. [Illustration: THE MUNICIPAL THEATRE, PERNAMBUCO.] Recife is divided into three parts by streams of water or lagoons, and there are many bridges connecting the various parts. In fact it is cut up so much by these arms of the ocean that it has been called the South American Venice. The city is fifth in size in the republic, and is quite a pretty little city with plazas and parks after the usual style. In the oldest part of the city the streets are narrow and crooked, but on the other and larger peninsula, the blocks of houses are larger, the streets wider, and there are some good stores as well as tram cars. The colour of the inhabitants is rather marked, but there is, possibly, not so large a percentage of the negro element as in the larger city lower down on the coast. The state of Pernambuco is a state about the size of Ohio, and one of the important states in the republic. Its population exceeds the million mark. Because of its large black population, many of whom were formerly slaves, education has not advanced here as much as in a number of the states farther south. Its commerce is considerable, with sugar as the leading item. Cotton is also an important production. At the port one can see cotton coming in on wagons, ox-carts, the backs of mules and even on the black shoulders of the inhabitants. The coast-line of Pernambuco is only a little over a hundred miles in length, but the state runs inland for several hundred miles.