New-York tribune., 1908-12-10
TO LEND $75,OOO,OOO
SIGN COFFEE CONTRACT.
Ten Millions Of Sac PGul0 Bonds
U7iU Be Placed Here.

The contract for the Sac Paulo coffee loan OF
100000 was signed in Brazil yesterday the last
preliminary having been the Senates AUTHORIZATION
on Tuesday Of the granting OF the Brazilian feo-
eral guarantee by the President and the loan will
be brought out at early date in this country
and Europe
or the new loan 100000 will bs placed here.
so5 900 in London s2OOOOOO in Paris s1o0o0o0 In
Berlin and S5.G0o0OO in Brussels. The American
part of the issue has been underwritten by the
National City Bank, the First National Bank ana
J. P. Morgan & Co. and the foreign underwriters
are J. Henry Schroeder & Co. of London; the
Societe Generale of Paris S. Beishroeder. of Ber-
lin and the National Bank Of Belgium. Brussels.
1t is understood that the bonds allotted to the
United States will be offered for public subscriR-
ton at a little higher than 921a and interest the
figure mentioned several weeks ago, when the TACT
that the First National Bank and the National
City Bank were to participate in this important
financial operation first published and that
early application for their listing on the Stock
Exchange would be made
The bonds to bear per cent interest aIu VIII
mature in 1913 but their retirement in advance Of
that date is allowed by the contract, and. accord
ing to present expectations will be completed within
six years The loan. which represents a consolida-
ton Of several loans effected by the State OF Sac
Pauo since 1895 the proceeds OF which have been
devoted to buying coffee the planters Of that
state with view TO saving them from disastrous
loss through the sharp drop in price to figures under
the cost Of productionis first obligation OF the State
OF PaulO, guaranteed as 10 principal ana III
teres by the Brazilian government and secured also
by the pledge OF more than seven million bags of
coffee stored in warehouses in this city and in
cities of Europe.
Additional security Is provided by a surtax Of
francs p bag on coffee exported from Brazil. The
proceeds of this surtax TO be renitted weekly
TO a committee of seven, in which the bankers are
TO have six representatives and the government is
to have one representative. The marketing of the
pledged coffee is to be IN the hands OF this com
.nttee which will apply the proceeds Of the sales Of
the commodity and the receipts from the surtax to
the redemption of the bonds either by purchase at
less than par IN the open market from time to time
or by drawing by lot for payment at par
The contract also provides that the surtax shall
Re increased If a larger crop shall be produced,
which would larger receipts TO be applied TO
meeting the interest the loan and the retire
meut Of the principal, while a smaller crop than
usual would mean higher prices for coffee and
therefore larger returns from the sale Of the cof-
fee pledged under the loan. The State of Sac
PauIo has also pledged itself to buy no more coffee
which signifies that the so-called ''Valorzation"
plan is a thing Of the past, and which, in addi-
ton to the provision for increased taxation on
heavy crops should operate to restrict the output
of the commodity in the future, and II has also
bound itself contract further external debt
within a given period Of time prejudiclal to the
arrangement with the bankers