Large foreign debts have of course a depressing effect upon exchange in the long run, but at the time when the loans have been made there has almost always been a rise corresponding to the influx of gold; this effect was a marked cause of wild ups and downs of exchange in the palmiest days of the present century. I have frequently asked bankers in Brazil if they would like to see an absolutely stable rate of exchange: more than once the answer has been Yes, and the examples of the stabilized countries of the world quoted as showing that real financial strength can only be obtained with a firmly gold-backed currency. But even the most conservative banker will admit that variations in exchange have been the cause of large earnings on the part of financial houses in Brazil, and it is certain that fluctuation is not only the source of many fortunes, but that it materially lends itself to the promotion of the gambling spirit that helps both to make and to undo a young country; it is a spirit prevalent in many parts of Latin America and perhaps particularly in Brazil where such spectacular turns of Fortune’s wheel have been seen from time to time in different parts of the country. _Investment in Brazil_ Investment in Brazil from other countries has been of three chief kinds: blood, brains, and money. The investment in blood came during the sixteenth, seventeenth and eighteenth centuries almost exclusively from Portugal—with a forcibly introduced negro element from Africa at the same time—while during the nineteenth century colonies were introduced of a remarkably wide variety of peoples; the investment in brains came so far as technical skill is concerned almost directly as a result of the great investment of the third element, money, which began soon after the erection of the monarchy in Brazil in 1808, flowed steadily for eighty years, and increased to a golden torrent after the establishment of the republic in 1889.