Mr. Thompson to Mr. Gresham.

No. 287.]

Sir: Under the constitution of Brazil the sessions of the National Congress terminate upon the completion of three months from their opening, but may be continued from time to time as the necessities of the public service may require. In accordance with this provision Congress has continued the present session until October 7. I inclose copy of the decree with a translation.

This action of Congress is believed to have no material political significance beyond the fact that it has been the desire of the vice-president to have an adjournment during the continuance of the state of [Page 73] siege, but the state of siege has expired and he has tacitly given his sanction to the continuance by the promulgation of the decree.

On the 1st instant the state of siege expired and no attempt was made in either house to have it continued. The State and Federal elections have taken place in Santa Catharina and those in Rio Grande do Sul and Parana are called for the early part of the coming month. Brazil has, therefore, regained her normal condition, the first time since the commencement of the Federalista movement in the south. In consequence, trade is rapidly improving, and with it a material advance in the rate of exchange and Government securities. It is a source of much pleasure to see the Government, after passing through so many difficulties, again firmly established. It is a triumph for republican institutions.

There have, however, been troubles in the north which called for the exercise of federal authority. In the States of Alagoas and Sergipe dissensions in the State governments have arisen, but I believe have now been happily settled.

There have been no new developments in the Portugese difficulties and diplomatic relations still remain severed.

Telegrams from Paris in the local papers yesterday note that the Brazilian Government has reopened the question of boundary between its territory and that of French Guiana, but no further information has been made public.

I have, etc.,

Thos. L. Thompson.