The elections of 1863 resulted in a complete defeat of the Conservatives, but the victorious Liberals did not need to pass any radical currency legislation. Hard times had disappeared by the operation of natural law. The bank-notes approached par and the budgets nearly balanced. With 1864 the country entered upon a new era of prosperity. The production of coffee had doubled from 1840 to 1851, and then had remained stationary. But with the cessation of the Civil War in the United States an era of high prices was inaugurated which coincided with Brazil's financial rehabilitation, and stimulated planting. Although real activity in the building of railroads did not begin until after the Paraguayan war, four short lines had been started before 1862. The years of peace and order had disaccustomed the people to the thought of violence, and a steady advance had been made toward government by law. The highly educated statesmen placed by the Emperor at the head of affairs understood the most important principles of good government and tried conscientiously to put them in practice. In transportation, banking, posts, and telegraphs, commercial methods, etc., the improvements of modern civilisation were easily introduced, though in agriculture the indolence of proprietors and the apathetic ignorance of the slaves prevented any rapid advance. On the whole, Brazil had made greater political and industrial progress when the Paraguayan war broke out than any other South American country, though grave vices remained to hamper her further development. The mass of the people were apathetic and ignorant; slavery tended to discredit industrious habits, at best so difficult to maintain in the tropics; the upper classes showed little interest in or aptitude for commercial matters: commerce, banking, railroads, mining, and engineering prospered only where foreigners personally engaged in them. The people themselves, in spite of the enlightenment of the educated classes, showed little initiative or energy. CHAPTER XIX THE PARAGUAYAN WAR Brazilian statesmen might well have been pardoned if, in 1865, they had claimed for their country the hegemony of South America. The result of the war against Rosas had been brilliant; the Argentine had only just emerged from half a century of civil war; Uruguay was almost a Brazilian protectorate; Brazil's internal condition was settled; in concentration of power, as well as in wealth, population, and extent, she was at the head of the continent. With the republics on the west she maintained good relations, while all the time she was firmly pressing her territorial claims on toward the foot of the Andes. She even attempted to control the navigation of the great waterways of South America. [Illustration: GOVERNOR'S PALACE IN SAO PAULO.]