The world shock of 1914 brought exchange down with a run, and, although it recovered from the first fall, it was soon evident that Brazilian credit could not bring it back to its old level, and that the financial burden of the country, its obligation to pay foreign debts, would be rendered still more onerous by this depression; it would take just so many more milreis, with Federal receipts perilously lessened by the stoppage of imports, to buy pounds sterling, than in normal times. Brazil asked her foreign creditors for relief, obtained a Funding Loan by which payments on interest and amortization were suspended until October, 1917. As the specie payments called for by the foreign debt would have needed about £5,200,000 in both 1915 and 1916, a burden was lightened, for the time, which the increased balances of trade during the intervening period have also helped to lift. But between 1914 and 1918 the Foreign Debt was increased by nearly £12,000,000 of accumulated interest, and the sums required for annual service were more difficult to find after the depreciation of the milreis in 1920. In 1920 the total nominal Foreign Debt was £120,400,000, plus 325,000,000 francs. Later, Brazil borrowed a few millions from the United States, and in early 1922 again borrowed successfully in London. The internal debt, at the beginning of 1921, amounted to over one million contos. It will be seen from the following list that while nearly £12,000,000 came from France yet the great bulk of the borrowed sums came from England originally: a considerable proportion of the original sums—apparently about forty per cent—were destined to the construction or acquisition of railways and port works in the Republic. BRAZIL’S EXTERNAL STERLING DEBT, DECEMBER 31ST, 1920