Industrial and commercial South America

Cattle Industry

A leading industry of Brazil which, it has been said, may even in São Paulo supersede in importance that of coffee is live stock. Two packing houses now slaughter 300,000 cattle per year, one Brazilian, at Barretos, the other an American, the Continental Products, at Osasco near São Paulo, exporting chiefly to France and Italy. Another American Company has at São Paulo a plant that will handle daily 1500 head of cattle, 1000 hogs, and 2500 sheep. In tributary territory, which would include parts of Matto Grosso and Minas, 2,500,000 cattle are estimated. It is said that the best breeding ground is Matto Grosso, where the cattle run wild as once in Texas, though each rancher has a certain range and his cattle are branded. The Brazil Land and Cattle Company procured 8,000,000 acres in Matto Grosso, Paraná, and Minas, mostly well watered and with good grazing, except in Matto Grosso. Much fencing was done and buildings were erected. Recent increase in prices has improved prospects. This property is now owned by the Continental Products Company, in which the Wilson packers are interested.

Other vast lands are available. From the ranges of Matto Grosso the cattle are driven across to fattening pastures of southwest Minas and northwest São Paulo where the land has been planted to grass, though it is said that a native grass, caipim gordura, grows there all the year round. Argentina’s alfalfa lands make the cost of fattening an animal six months $7.50, while with caipim gordura in Brazil $1.33 covers the expense. Some Brazil grasses are of the highest class while others are good only for goats. On the Araguaya River the grass is 16-17 feet high. The Jaragua is over 3 feet. In Amazonas and Pará cattle are said to flourish but not goats or pigs. Rio Grande near the Uruguay line has fine grazing lands; those in Minas and São Paulo at an elevation of 1200-1400 feet where animals never need shelter are excellent.

Before the packing houses were started jerked beef only was marketed from the herds, hence, as thin cattle were preferred for that purpose, there was no object in improving the grade. Now there is systematic progress. Breeding farms are operated, fine stock has been imported, and in time high grade meat, perhaps equal to the Argentine, will be marketed. Twelve thousand tons were sent to Europe and the United States in six months in 1916, though the first experimental 1¹⁄₂ tons was sent in November, 1914. At the School of Agriculture, Piracicaba, São Paulo, are good imported bulls, and one of native type, the Caracú, with pale buff hide, fitted to be the base of standardized herds. It seems that in some sections, notably Matto Grosso, a cross with the Indian zebu, which has a hump, and its descendants, is best qualified to resist the climate and the insect pests of that region; but in the pastures of Paraná and Rio Grande, Herefords, Durhams, Jerseys, etc., will flourish. The zebu is of large size and its skin is excellent leather, but packers say the hump does not pack well, and the shoulder is thin. Plants now or soon to be in operation south of São Paulo are three: in Rio Grande, one of Swift, one at Pelotas, Brazilian, and one at Sant’ Anna of Armour. The President of Paraná has been extending high roads towards Guarapuava to tap the State of Matto Grosso, and a large drove of cattle has come down. He desires to have an American packing house established in the State and will arrange with a suitable company to make no advance on the export tax for 15 years. Paranaguá, a port which we have already noted, is well served by the Brazilian Lloyd Line and the Funch-Edye from New York. Similar concessions are offered in Santa Catharina, which State has lower export duties; and by the Governor of Rio Grande, who would exempt from all export taxes any foreign company; though a tax of 10 milreis, $3.33, is imposed for every cow slaughtered, to protect the herds from decimation. If all the herds number 30,000,000, 2,500,000 or more might be slaughtered yearly without diminution. Cattle formerly were killed for their hides only, and the export of these is still important; 37,000 tons exported in 1915 were valued at $13,000,000.

Sheep raising seems inappropriate for a tropical climate, but in Rio Grande do Sul development is possible, also on the highlands of São Paulo, Minas, and Matto Grosso. Experiments with Romney Marsh have been successful for both wool and meat. Now there are 11,000,000 sheep, 7,000,000 goats, 18,000,000 hogs, 6,000,000 horses, and 3,000,000 mules and donkeys in the country.

Manufactures

While Brazil may not be called a manufacturing country, she had over 26,000 such plants in 1916; and her statesmen are eager to increase these industries, for which her immense water power gives her unusual advantages. The largest concern in this field has a capital of $8,000,000 and an annual output worth $4,500,000; it employs 2800 hands making sacking, yarn, rope, thread, etc., this in São Paulo. In the textile field, the cotton mills naturally lead with over 200 mills and an investment of $80,000,000. They exist in various States, employing 80,000 persons; one in Pernambuco near the city of Olinda is a sample. The estate of 45 square miles of pasture and woodland borders on the sea, the shore fringed with coconut trees. Machinery and some technical workers were brought from England. All the processes of making fine cloth are there followed; they spin, dye, weave, color, and print. Native dyes are used in part. Of 3500 hands employed 70 per cent are women and children. Over $35,000 a month are paid in wages. Dwellings are rented at low prices or owned by employes; schools, hospital, and dispensary are free. A dairy and a stock farm belong to the estate, brick factories, a bakery, etc. A lumber yard is important. One thousand tons of coal a month are usually consumed, but in war time wood was used. The cotton is bought, $200,000 a month, and as much a year is spent for chemicals, drugs, etc. From 960 looms 1,500,000 metres of cloth 22-26 inches wide are produced a month, from blue denim to fine flowered fabrics; the products are sold in 80 stores owned by the Company in various States. Brazil has 11 flour mills of commercial importance, located in the States of Rio, São Paulo, Paraná, and Rio Grande do Sul, at one time having no tax on wheat, but ten cents a kilo on flour, by means of which the infant industry was started. In 1915, 800,000 barrels of flour were imported from the United States and 600,000 from Argentina, a little from Uruguay; at the same time enough wheat was imported and milled to make 2,750,000 barrels, evidence of the work of the mills. For metal working there are 134 shops for imported iron. Factories exist of almost every kind. Leather goods are produced especially shoes for which there are many factories; hats, clothing and a variety of ordinary articles, such as soap, hosiery, brooms, paper, wagons, etc. Brazil workmen are skilful and the industries are certain to increase.

Mining

The mining industry of Brazil, if not precisely in embryo, for it has been in a very flourishing condition, is now in a state of prospect; on the verge of a great development rather than of active operation, except for a few varieties of metals. At the moment there is little working except in gold, diamonds, monazite, manganese, and coal.

Manganese has recently been the chief mineral exported on account of war necessities, 245,000 tons valued at 7 million dollars, in the first half of 1917, in contrast to 85,000 tons in the same part of 1914. The mines are in Minas, Matto Grosso, Bahia, and elsewhere, those in Minas being accessible to the port of Rio. In Matto Grosso, 18 miles from Corumbá, there is a deposit called the Urucum, estimated at 30,000,000 tons of undeveloped ore; one, the Quelez, in Minas of 5,000,000, 30 miles from Rio, and others. The ore averages over 50 per cent of metallic manganese, with a little iron silicate and phosphorus. Americans are interested in the works as the metal is valuable in the iron and steel industry. With better transportation facilities for these and other deposits, a good future is certain.

Gold mining was naturally the first to be developed. Minas has been the chief producer. Of Minas Geraes the writer Diaz said, “In this State what does not hide gold contains iron; what does not contain coal spreads diamonds.” After the discovery of gold in 1693, 80,000 men toiled for a century at placer mining for the King of Portugal. About $1,000,000,000 has been taken out. The Morro Velho, said to be the oldest producing mine in the world, is now with the Ouro Preto worked by British Companies. The first is being worked at the depth of a mile with no sign of exhaustion. The gross receipts for the year ending February 28, 1917, were over $4,000,000, the profits $750,000, from a tonnage crushed of 187,400. The Ouro Preto Company operates the Passagem Mine five miles from the former capital of that name, being the first to use a stamp mill in 1819. The average thickness of the lode was ten feet, now about eight. Gold properties exist in many States, the most important around three mountain chains, the Mantiqueira and Espinhaço, which cross Minas and Bahia, running into Pernambuco; the range between Minas and Bahia, and Goyaz, continuing into Piauhy and Ceará, west of the São Francisco River; the third east of the Paraguay and Araguaya Rivers. Those most worked are in the Espinhaco Range in Minas and Bahia. Dredging has been carried on with varying success, but some of the companies have been overcapitalized. An American Company has recently acquired some old concessions of land in Goyaz, rich in gold and diamonds, where extensive operations are expected shortly.

Diamonds. As for diamonds, since the first stone was discovered in 1721, many precious gems have been produced. During 40 years in that century $17,500,000 worth were exported. The city, Diamantina, 500 miles from Rio, is the centre of one of the most important fields. Gems are found in pot-holes, one of which contained 10 pounds of diamonds and 28 of gold. Others are in clay deposits in rocks of sandstone and schist. In the River Bagagem near the border of São Paulo, 250 miles from Diamantina, three great diamonds have been found: the Estrella do Sul, in 1853, weighing 254 carats uncut, was sold to the Gaekwar of Baroda for $400,000, the others weighing 117 and 175 carats. Other fields are in Paraná, Bahia, Goyaz, Matto Grosso, and São Paulo, in Goyaz on the Garças River, tributary to the Araguaya. Apparently most of the stones are now smuggled. They are said to be finer than the Cape diamonds and also to be sold for them. Black diamonds are found, of great value in the arts, and many precious and semi-precious stones, such as amethysts, tourmaline, topaz, etc., in various places.

Copper exists in several States, but production is slight. A mass weighing over 2600 pounds was discovered years ago near the city of Bahia, and there are six well known districts in the State. In Rio Grande do Sul an extensive property was opened which showed 6.5 per cent copper and 30 grams gold per ton. Minas will probably rank next to these States. Promising quantities are near Campos in Rio de Janeiro; there are also ores in Goyaz, Paraná, Matto Grosso, Parahyba, Ceará, Rio Grande do Norte and Maranhão; some are hardly accessible. One of those in Bahia covers nearly 15,000 acres, about 30 miles from the railway. Belgians and Dutch have operated at Camaquam, Rio Grande do Sul.

Iron in actual mountains occurs in Minas, 12 billion tons of the highest grade in 52 outcroppings. Deposits have been acquired by American, British, German, and French interests. The manager of a British company which owned 90,000 acres said, “One could travel 23 miles one way and 16 another on outcrops of ore, canga, or rubble.” In one deposit 30,000,000 tons are in sight, 60 per cent pure.

American interests, the Itabira Company, have secured deposits which include the celebrated iron mountain of Itabira do Matto Dentro in the east near the head of the Doce River. The hematite iron district is reached from Rio by the Central and the Leopoldina Railways; but this deposit will be tapped by a prolongation of the Victoria-Minas Railway, now running along a part of the Doce River. Also a branch will lead to a terminal 40 miles north of Victoria, Santa Cruz, a small port which will be developed and equipped with special loading machinery. Here will be erected a steel plant with an annual capacity of 150,000 tons of steel products, pig-iron, steel plates, rails, etc. The iron, 326 miles from this port, runs 69 per cent pure; some in the United States runs 52 per cent. It will be several years before manufacture can begin. Coal will be imported.

Development of iron properties has been retarded by lack of transportation and fuel. Wagon roads are unknown. The altitude is 2000-4000 feet and the climate good. The coal is hardly good enough or in sufficiently large supply. Oil development is uncertain. As there is water power the use of electricity may be arranged.

Near Ipanema, São Paulo, iron is found. A large deposit has been located in Paraná three miles from the port of Antonina. Other deposits in the two States south give good promise. So far charcoal has been used for a little smelting.

Coal mining has been carried on for a long time in a small and primitive way, but most of the coal used has been imported. The principal deposits found are in Santa Catharina and Rio Grande do Sul, others are in Paraná and Pernambuco. In Paraná American interests have made extensive purchases and expect to develop the property at once. Rio Grande do Sul has been estimated to have 800,000,000 tons and to be able to supply 1,000,000 a year.

In Santa Catharina the veins are about ten feet thick; some in Rio Grande are 4-10 feet, some 13. The property at Xarquedas, operated for some years, produces 20,000 tons per annum. With greater activity, in March 1918, 650 tons were produced daily from two shafts, and 1000 or more was expected by the addition of a third. With high volatile matter, good gas and salable coke are procured for Pelotas. Coal is found in several river valleys in Santa Catharina. State surveys are being made, and with improvement in transport by land and water a great industry may be developed of enormous value in promoting manufactures. Railway construction has been authorized by the President to aid coal companies in work, and other concessions have been made. The briquettes from Santa Catharina coal show hardly less caloric value than those of the Welsh patent fuel. Much is used by the Lloyd Brasileiro and other steamship lines including the Japanese; by railways, mills, etc. A little is exported to Argentina and Uruguay. The Rio Grande Railway is or was burning coal mixed with wood on its locomotives. The best coal is 42 per cent combustible, and when pulverized is equal to any other. Bituminous schist sold at $12.50 a ton was used for gas in São Paulo during the War. There are great seams 10-12 feet thick in São Paulo and Rio Grande do Sul. Lignite occurs in Pará, Amazonas, and Minas, enormous peat beds in various places.

Monazite sands exist on the Brazilian coast, probably in larger quantities than in all the rest of the world. In 1910 Germany imported $1,000,000 worth. The thorium in the sands, used in the manufacture of gas mantles, is extracted in Brazilian factories before exportation. Two per cent of thorium is in the sand, sometimes nearly 6 per cent. It is found on the coast north of Rio and on some river banks in Rio, Espirito Santo, Bahia, and Minas.

Graphite exists in several States, especially Minas and Bahia in rather inaccessible locations, but one deposit in Rio is worked, for a pencil factory in the city of Rio; others in a small way for local use.

Other Minerals. Platinum is found in gold bearing quartz and in river alluvium in Pernambuco, Minas, and Parahyba; nickel in Minas, Santa Catharina, and Rio Grande do Sul; salt in Rio Grande do Norte, Rio, and Minas, worked in the last two; much is imported. Other minerals found in various localities are asbestos, antimony and tin, bismuth, barium, cinnabar, emery, kaolin; marble, white, rose, onyx, and green; mica, molybdenite, saltpetre, silver and lead, soapstone and talc, and wolfram. Among the stones garnets, opals, pearls, rubies, sapphires, emeralds, topaz, and tourmalines are found in more or less profusion as well as rock crystal, useful to opticians. Minas contains almost every variety of ore and gem, which with its good climate and fertile soil have made it the best populated State, though without a large city.

Petroleum has been discovered in a number of States, among them São Paulo, Minas, Alagôas, Pernambuco, Bahia, and Sergipe; some of excellent quality in Bahia; but whether in quantities for large exploitation is uncertain until further investigation and work are carried on. Some geologists believe that prospects are highly favorable. Oil of fine quality is recently reported at Piracicaba, São Paulo, but as the petroleum is generally in schist rock its extraction would be expensive. Recent advices state that Brazil has 35 oil fields in four States with an area of 10,000 square miles; in the entire country 75,000 square miles with an estimated producing capacity within ten years of 500 to 600 million barrels.

Investments

In view of the varied resources of Brazil, to enumerate the possibilities for investors would be difficult. There is hardly a line of industry which cannot there be carried on successfully. That of coffee growing is so well developed as to be somewhat overcrowded, but in almost any other line there is a field for the investor. Whether it be mining of gold or diamonds, of coal, iron, or manganese, be it agriculture, stock raising, the lumber industry, or manufacturing, the harnessing of the waterfalls to produce hydro-electric power, the construction of public works, the field for the capitalist, large or small, is of infinite variety and excellent promise. The present Government is planning a broad and active development of the electric power available from its great and numerous water-falls.