The San Francisco call., 1908-07-19
CORNER IN COFFEE
STAGNATES MARKET
of Brazilian Govern-
ment to Sell Vast Crop in Stor-
age Clogs Worlds Marts

BY an unusual combination of cir
cumstances the coffee trade Of the
world has. for the moment become de-
moralized The market is at a stand
still and brokers are awaiting develop
ments. Private advices from New Or
leans brought news OF the actual con-
ditions 10 the dealers in San Francisco.
It appears that the Brazilian govern
ment. which has had more than S,000,-
0e0 sacks in storage, is endeavoring TO
place this vast supply on the market
as quietly as possible in order that
prices may not be disturbed. A cargo
Of $4,000 sacks is now on the water
consigned by way of New Orleans to
San Francisco dealers.
Some apprehension has been caused
by the attempt TO throw Brazilian cof-
fee on the San Francisco market. This
city has for many years been the dis
tTibuting point for a very large per-
centage of the Central American crop
The Central American article commands
almost twice as high a price as the
Brazilian product and some fear has
been felt by local brokers that market
conditions may be upset by the intro
duction of what they term an inferior
article.
PATERNALIsM Is COSTLY
II was not exactly through choice
that the government of Brazil came
into possession Of such a vast supply
Of coffee 1t was through a desire to
assist the growers to dispose of an
enormous yield at an advantageous
price, but the act of paternalism does
not appear TO have been great sue
cess
Up to 1903 Brazil produced coffee
crop each year averaging between
100000 and 6,000.00O bales. The mar
ket and the price were all that the
grower could ask But the country. it
appears, began to suffer from a species
OF overprosperity. In 1906 the country
had expanded to such an extent that
the coffee crop of that year amounted
TO 1s,50o.000 bales The supply far ex-
eeeded the demand and prices threat
ened TO slump Conditions were not
unlike those that confronted the south
ern cotton growers q rev years ago.
The cotton men talked of burning a
part of their crop and some of them
actually did so. In Brazil the govern
ment stepped in and quietly bought ND
marketed advantageousIy by the
growers.
BORROW FROM FRENCH
The s.357.o0O bales purchased by the
Brazilian government were procured at
about s11 a sack, bringing the total cost
70 about So. 100000. To assist in this
purchase, Brazil borrowed SIS. 900 900
from French bankers, giving the cred
itors lien on the coffee. 1his vast
supply was placed in warehouses. tho
intention being TO market it gradually
as conditions permitted
Nothing could be done in 1907. how
ever. as the crop OF that year supplied
all wants and the government car
ried its great store Ovar RI Tao7 TIT.
year the crop promises to be as large
If not larger. than ever. The country
is confronted with the prospect of an
other surplus.
When this condition was made known
to the French bankers who had ad
vanced the money on the supply in
storage, they demanded that an iTnne
diate attempt be made to market fbe
s.357,000 sacks. held in the warehouses
The matter has been turned over to
the American coffee trust and agents
have been sent throughout the United
States in an effort to dispose of the
supply as quietly as possible In addi-
ton TO the amount already consigned
TO San Francisco, shipments will be
made to dealers in New York and New
Orleans.
Up to the present time there has
been no break in the market. but
brokers are holding aloof, awaiting
the arrival OF these shipments In the
meantime trading in coffee is at a
standstill