The Hawaiian star. [volume] (Honolulu [Oahu]) 1893-1912, 1911-07-26


ization programme economically un-
sound In December 1906, in an inter.
view by a reporter of the Wall Street
Journal, Hermann Sielcklen, of Cross
man & Bro of New York city, the
American representative of the syndic.
ate who supplied portion of the gold
necessary to carry the load, said: It
is no scheme at all. 1t is simply a
plain business proposition which hous-
es representing $3.50, 100000 capital can
without any doubt carry through to the
measure of success which is necessary
to accomplish the object for which the
plan was undertaken"
But many factors conspired 10 in
/ terfere with the success of the scheme.
! a new government was coming into
office in Brazil what would its attitude
be? Continued over-production was
threatened. Prices were still low. 1t
seemed that those who had predicted
failure were to have their predictions
realized Something had to be done to
interest further loans. At this date
the Saturday Evening Post published
the following: Dispatches announce
the utter collapse of the coffee corner
at loss to the Brazilian government
of $15,OOO,OOO'
But it was not to be. When the
scheme had been in operation two
years, it did not look promising, and Sac
Paulo discovered she had more than
she could carry. Brazil now came to
the rescue of the four states which
had originally undertaken to corner the
crop alone, and in December 1908 a
new agreement was entered into. A
new loan of fifteen million pounds ster-
ling was made, the government of Bra
iii now guaranteeing principal and in
: terest, and bonds were issued for the
amount. One-third of the bonds were
taken in London, one-third in Paris, D.
100000 in New York, and the balance
! went to the money centers of Europe.
A committee of seven was named to
handle the coffee, six by the firms that
furnished the money, and one by the
Brazilian government The coffee was
to be shipped to the representatives of
the several firms as collateral and the
agreement provided that 100000 bags
only should be disposed of in the crop
year 19O9-1O, 100000 during 1901,
100000 during 1911-12, 100000 during
1928, and thereafter 100000 yearly
To further help the scheme, Brazil was
to levy a surtaX on all coffee shipped
cut of the country, over 100000 bags
annually, of about a half a cent pei
pound, and remit the proceeds of this
tax weekly to the bond-holders. 1t was
also agreed that the government
should enact law that would prohibi
the planting of additional coffee trees
and prevent as far as possible an in
L
the whole scheme depended on such {
law, and it was done, with the result
that the surplus is steadily declining
prices advancing, and consumption
rapidly overtaking production. w
have thus here presented the unique
spectacle of a powerful government
n for the first time in history, engage
in restricting by statute the production
Of a necessary commodity for tn, pul
pose of enhancing the price. Attemp
ed corners in cotton, wheat and cor
have failed in the past, but here W
- have corner that has been con
plete success. Every person VIII
m drinks a cup of coffee is contributin
his mite towards the millions of profit
now being reaped by the scheme"
#&& 50
- "On January LIST last the syndicat
had on hand 6,31O,323 bags coffee,
which 1,461, $50 were stored in Ne
York, the balance in European war
70 houses. This coffee is a much hight
grade than No Z Rio This coffC
represents at present prices a value
2O,OO0O0O pounds sterling, while I'll
obligation of Brazil to the syndicat
according to officials figures, is but Il
ee 100000 pounds at the time. Will
this difference does not represent tn
Y entire advanced cost to the consumer
it probably does represent the ne
Profits to Brazil on the amount pu
= chased for account of the syndicate