LOCAL CHARACTERISTICS 25 



currency in its relation to gold. This factor is of 

 special importance in connection with rubber pro- 

 duction, for not less than 75 per cent, of the total cost 

 is due to payments to collectors working on a profit- 

 sharing system. These payments are made in currency, 

 whereas the value of all rubber is regulated by the gold 

 prices quoted in Europe or the United States. How 

 far-reaching is this question of exchange may be 

 gathered from the fact that during the last twenty years 

 the sterling value of the milreis has varied from sixpence 

 to eighteenpence. A sudden drop or rise in exchange 

 does not meet with any corresponding difference in the 

 rate paid for the necessities of life, and it is only after a 

 comparatively prolonged period that the prices of local 

 commodities respond to the higher or lower sterling 

 value of the currency. At present the established rate for 

 nearly all calculations is sixteen pence to the milreis. 

 If gold should be drained away from Brazil, and the 

 rate fall to twelve pence, a substantial gain would accrue 

 to the producer, for he would receive a greater number 

 of milreis for every pound of rubber delivered. Where 

 daily wages are the rule the amount paid in currency 

 fluctuates very slightly, even when substantial variation 

 in exchange takes place. Hence it is that when the 

 currency depreciates and the national credit is adversely 

 affected the situation becomes distinctly more favourable 

 for all industrial undertakings where the value of the 

 production is regulated by the prices ruling in foreign 

 markets. However incongruous the statement may 

 appear to be, there is no doubt that national bankruptcy 

 might infer an immediate revival of prosperity for the 

 rubber industry in the Amazon Valley, and prove to be 

 a temporary solution of the present crisis. 



