400 Réis – Brazil

In 1901, Brazil’s currency situation was defined by the ongoing consequences of the encilhamento ("saddling up")—a period of chaotic financial speculation and rampant money printing in the early 1890s following the establishment of the Republic. This policy, intended to fuel industrial growth, instead led to severe inflation, a collapse of the real's value, and a deep crisis of confidence in the nation's paper currency. By the turn of the century, the country operated under an inconvertible paper money standard, meaning the milréis (the currency unit) was not backed by or redeemable for gold, and its exchange rate against foreign currencies was highly volatile and generally depreciating.

Economically, this instability hampered foreign investment and complicated international trade, as merchants struggled with unpredictable costs. The federal government, under President Campos Sales (1898-1902), was primarily focused on a deflationary policy to stabilize the currency and address massive foreign debt. His administration’s cornerstone was the Funding Loan of 1898, which rescheduled Brazil's obligations with international creditors in exchange for a commitment to gradually withdraw and burn paper money from circulation, a process known as retração (contraction).

Thus, the currency landscape in 1901 was one of fragile transition. The immediate speculative frenzy was over, but the economy labored under the tight monetary policies designed to clean up the mess. The goal was to restore fiscal credibility and eventually return to metal-backed convertibility, a process that would remain fraught and incomplete for years to come. The period marked a cautious and painful effort to impose order on a financial system still reeling from the republic's early excesses.