The San Francisco call., 1908-10-21
THE COFFEE TRADE
The Situation Regarding the Sac Paulo
Government Valorization Loan

The New York circular of Henry Nordlinger &
Co. says:
Santos were seriously interrupted by strike of
ooek laoorers at that port. The movement of
Is 10 be expected therefore, that the receipts at
Santos during the current month will be quite
large, the natural receipts being augmented by
the accumulations resulting from this strike
These large receipts do not influence us in our
opinion with regard to the size of the crop We
maintain estimate of Il, ,25O. 600 bags for Rio
and Santos to which we gave expression in our
report OF the 18th ult
European newspapers have gone too far in
decrying the proposed Sac Paulo government loan
of f15,U00,O00. and have entered field of which
they have little or no knowledge. These news
crop Is equal TO that of 1901 1902, when about
15.500,000 bags were brought to market,
but do not give their source of information
Anonymous statements do not carry great weight
being too often dictated by selfish motives. De-
spite reports, which have it that the government
is meeting with serious difficulty in placing the
loan, we learn from good authority that this
loan of f15, 900, ,000 with coffee as collateral
will be offered for public subscription at an
80 per cent.
The coffee trade has no interest In the sue
cess failure of this public offering. The un-
derwriters have made themselves responsible TO
take the bonds, whether the public relieves them
of their obligations or not. The only interest
the trade has in this matter Is to know what
proviso has been made with reference TO the dis
posal of the collateral. We as yet in the
dark as to whether or not the coffee is to be
right of disposal will eventually rest.
DISTURBING ELEMENT
''It is certainly a disturbing element in the
trade have $500, 900 bags of coffee locked up,
the ownership of which is liable to be shifted
any day from the shoulders of the government
TO those of the bond holders 1t would be far
preferable to see this coffee distributed among
the trade, where it properly belongs and where
1t would find natural outlet. We must, how
ever, consider the 1t is and not as 1t
might should be. The government is today
the biggest factor in the coffee business, and
will most likely remain so for good or evil. The
original aim of the government undertaking was
to protect the planters from starvation prices.
but the law of supply and demand can not be
upset by any power and it is bound to assert
itself sooner or later.
Despite the fact that last years crop
about 2 soc, 900 bags smaller than the consump-
tion, and despite the fact that the government
not only held It's coffee out Of the market, but
added about 900 bags to its holdings, that
crop was marketed below cost of production. 1t
is reasonable to ask what will happen when we
again have excessive crops to deal with, as may
and most likely viii be the case year or two
hence. With conditions as they prevail the trade
will doubt continue its present policy of buy
ing only for its immediate requirements.
mo reports have yet been received by us
regarding the Towering. The weather OF late
favorable, with rains and sunshine alter
mating. This ought to bring about good results.
While do not look for bumper crop next
year, we believe that larger crop than the one
now marketing may be reasonably expected.