The Morris County chronicle. [volume] (Morristown, N.J.) 1877-1915, 1908-09-08

lures in the New York Coffee Ex-
change have almost ceased A year
ago the daily sales we're 10000.
There was a net decline IN sales,
mostly speculative, of 7,414,O00 bags
during the past twelve months az
compared with the previous year.
For all practical purposes it may
be said that gambling in coffee
| prices has ended for the time being,
not only in New York but in Ham
burg, Germany, and Havre, France,
| changes.
This has been brought about not
by internal reform of coffee ex-
changes, for traders are keen as ever,
nor by legislation, for all measures
| proposed at the last session of the
New York Legislature to end gam
bling in food ,stuffs and stocks were
defeated.
Due to Brazil's Action.
1t is due solely to the remarkable
experiment now being made by the
Government of Brazil to control, for
the benefit of her own people, the
surplus coffee supply of the world.
Some merchants in the trade call the
| undertaking socialism, others char
acterize it as an example of financial
paternalism, while Spectators de-
nounce it as a corner in the market,
an unwarranted interference by
government in private business. But
those importers who are allied in the
valorization scheme, as it is called,
declare that it is merely form of
protection for home industry, re-
versal in details of operation of our
own protective tariff.
The Brazilian experiment has been
in operation for year and half,
but only during the past few weeks
has the full Eorce of its operations
been felt in the markets of the world.
Slowly but steadily the transactions
of spectators have been squeezed
| down; very surely has the range of
| Quotations in prices been narrowed
| and steadied, until to-day the posi-
bility of rise or fall has been reduced
| to such small fraction that there
is neither excitement nor profit in
| speculation.
Nature smiled on Brazil in 1906
in unprecedented plenty, and the cof-
| fee crop for the year was nearly
double the customary production In
! the calendars of trade the coffee year
extends from July to June 80, so
that officially this bumper crop is
recorded as that Of 1867.
Ordinarily Brazil produces be-
tween ten and eleven million of bags
of coffee, or about two-thirds of the
total required for the worlds con-
sumption. She did that in the year
| previous and the year following the
4 great yield that upset all calcula-
tons by amounting to 10000, 900
bags, or more than enough to supply
all the world, without reckoning the
output from other countries.
Faced a Trade Disaster.
To pour such a surplus into the
channels of trade would have the GER
| tain effect of lowering prices down
to lowest ebb. Coffee growing is the
principal industry of Brazil. 1t is
the life of the country, the basis of
all trade, the foundation of the ma
tons financial operations. Coffee
prices more than cut in half meant
ruin for the planters and almost vi
tai embarrassment to the Govern
ment itself In this emergency the
! Government resolved to embark into
commercial enterprise and become
the dominant factor in the coffee
trade of the world.
The State of Sac PaulO produces
by far the larger part of Brazilian
coffee, and the financial operations
have been conducted chiefly in the
! name of its Government, although
! backed by the Federal Government.
| 1t was resolved that the Government
should buy from the planters their
surplus coffee and hold it against
possible future short crops and the
| increasing demand of the world. This
would prevent glut of the market
and collapse in prices. The neces-
sary legislation was enacted, and the
! Government both State and Nation
| al, borrowed money in the financial
centres of the world to buy up the
| coffee.
These loans were negotiated in
| two ways. One form was the or
binary loan from bankers for which
was pledged the export duties on
coffee. This was done in the case of
| $4,000, 900 advanced by the house
OF Rothschild. In other cases great
mercantile houses interested in the
coffee trade, such as Arbuckle Broth
ers and Crossman & Sielcken, of New
| York, and similar firms in Hamburg
and London, advanced funds with
| the coffee itself as security.
All told, the Brazilian State and
National Government obligated
themselves for about $45. 100000,
and they hold to-day, stored in ware
houses in Santos, Rio Janeiro, New
| York, Havre, Hamburg and other
trade centres, nearly. 100000 bags
| Of coffee, worth between $40 and
| $11 bag. Thus the Government is
in absolute control of the market. 1t
not only saved crop panic at home
! but obtained power over the
world markets that up to date has
been wielded only for good
Scarcely Any Fluctuation.
The legislative enactments auth
o..i1ino fbn ualog.iyatfon cchema fixed