The star. (Reynoldsville, Pa.) 1892-1946, 1908-09-30

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,
where are the other principal ex-
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 Brazirs Action.
It 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
paternalsm. while spectators de-
nounce it as a corner in the market,
ain 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, a re-
versal in details of operation of our
own protective tariff.
The Brazilian experiment has been
in operation for year and a half,
but only during the past few weeks
has the full force 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 possi-
bility of rise or fall has been reduced
to such a 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 19067.
Ordinarily Brazil produces be-
p1 million nj hn q
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
great yield that upset all calcula-
tions by amounting to 20,000,O00
bags, or more than enough to supply
all the world, without reckoning the
output from other countries.
Faced Trade Disaster.
To pour such 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 a 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
SIS, 100000 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 s45,000,O00,
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
s11 a bag. Thus the Government il
| in absolute control OF the market. II
not only saved a crop panic at home
but obtained power over the