Rio Grande is the chief port, 1000 miles south of Rio de Janeiro, and 180 by sea north of Montevideo. The city lies just inside the entrance of the Lagôa dos Patos at its south end. Unfortunately, the entrance has been obstructed by a sand bar with a varying depth of water above. Vessels drawing more than 11 feet could not pass; uncertainty, often a few days’ waiting was the fate of others. An attempt to dredge a passage was unsuccessful, but with building of jetties improvement is manifest. Port works in the city, including a mile of quays, have been established, and a rapid development of the region is expected to follow. The city, population 40,000, has an active commerce by rail and water. By rail it is connected at Cacequy with the through line from São Paulo to Montevideo, and beyond this line at Uruguayana (population 20,000), on the Uruguay River, with the Argentine railways on the other side. There is regular steam navigation to the port of Pelotas, three hours, population 32,000, noted for its dried meat products, and to Porto Alegre at the north end of the lagoon, 150 miles and 12 hours distant. =Santa Catharina=, north of Rio Grande, less than one third of its size, has rather similar characteristics. Bordering on the Atlantic, it has Argentina on the west; on the north is the State of Paraná, from which it is separated for half the distance by the Iguassú River. The State is notable for wheat growing and other grains, for cattle and dairy products, for its exports of fruits, for its coal mines, and for the timber from its forests, especially the Paraná pines. It ranks second in Brazil as a producer of _yerba mate_, in Portuguese _herva matte_, 14,000,000 pounds being its annual output. Its manufacturing establishments (174) are of small size. The capital and chief port is Florianopolis on an island of that name. Improvements in the way of good port works are in hand, and though without rail connection a tonnage of about 300,000 has entered and cleared in a year. The port of São Francisco, a smaller town in the State, is called the best port south of Santos. This advantage will give the city future importance. Already it has rail connection by way of the town Rio Negro with Curityba and Paranaguá, and so with Ponta Grossa on the São Paulo-Uruguay Railway which of course crosses the State, a distance of 225 miles. The city is expected to be the terminus of a road which will pass through União da Victoria to the Iguassú Falls and across Paraguay to Asunción.