Commerce and industry continued to expand throughout the Paraguayan war. From 1865 to 1872 the annual revenues doubled, and though in 1868 the emissions of paper money had reduced its value one-half, it steadily rose thereafter until in 1873 it again reached par. Just after the war the budget balanced, and the production of coffee rose one-half. But with relief from financial pressure the Conservative ministers became extravagant, and when the great world panic of 1873 came both government and country were badly caught. A foreign loan of five millions sterling made in 1875 was not enough to meet the mounting deficits. In 1878 new issues of paper money were resorted to, and exchange dropped, remaining below par for ten years in spite of a subsequent doubling of coffee production and a great increase in the value of exports. Population, however, which had increased from five to ten millions from 1840 to 1870, in the next twenty years mounted to fifteen millions. [Illustration: BRIDGE AT MENDANHA.] The suppression of the slave trade by the Aberdeen Act and the Queiroz law made it probable that the institution itself would ultimately disappear. Brazilian character and customs had always stimulated voluntary emancipation, and in Brazil the negro does not reproduce as rapidly as the white. In 1856 the slaves numbered two millions and a half, being nearly forty per cent. of the population, but in 1873 their number had fallen to 1,584,000, or only sixteen per cent. The institution was, however, socially and politically very strong. Slaves furnished nearly all the labour employed in the production of staple exports, and it was believed that emancipation would be followed by agricultural collapse. But the Emperor was too enlightened a Christian and too susceptible to the good opinion of the civilised world not be at heart an abolitionist. However, it was only at the height of his influence that he deemed it wise to force the consideration of abolition on the reluctant nation. Agitation had begun modestly in 1864; in 1866 gradual emancipation was seriously proposed, but the breaking out of the war caused the matter to be adjourned. In 1869 Joaquim Nabuco, father of the present Brazilian minister to Great Britain, succeeded in virtually committing the Liberal party to emancipation. With the return of peace the question was taken up vigorously. The reactionary Conservative Cabinet resigned rather than be an instrument of the Emperor's wishes as to emancipation, and Pimenta Bueno was appointed Prime Minister for the especial purpose of getting a law through Congress declaring all children born thereafter free. This statesman failed, but Rio Branco, father of the present Minister for Foreign Affairs, was more successful. After a bitter and prolonged parliamentary struggle, in which Rio Branco used every weapon that his position gave him in gaining and holding doubtful Congressional votes, the law was passed in 1871. Thereafter all