The Lee County journal. (Leesburg, Ga.) 1904-19??, 1908-10-02


change have almost ceased. A year
ago the daily sales were 10000.
There was a net decline in sales,
mostly speculative, of 7,414,O00 bags
during the past twelve months as
compared with the previous year.
For all practical purposes 1t 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 Brazils 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 1t as an example of financial
paternalism, while spectators de-
nounce 1t 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 a year and 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 10
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
great yield that upset all calcula-
tions by amounting to 100000
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 foI~4he planters and almost vi
tai embarrassment to the Govern
ment itself In this emergency the
Government resolved I'd 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
$15,000,000 advanced by the house
of Rothschild. In other cases great
mercantile houses interested in the
coffee trade, such as Arbuckle Broth