Evening star. [volume] (Washington, D.C.) 1854-1972, 1912-05-19
PETITION IN EQUITY FILED
Sale of Stored Product Valued at
100000 900 Demanded.
VALORIZATION PLAN ATTACKED
Charged That Brazilian Scheme Is
Conducted Contrary to the
Sherman Law.


eral Wickersham today moved against
the SO called coffee trust or Brazilian
vaiorization scheme In petition in
equity filed in the United States court
here. the valorization plan is declared to
be a violation of the Sherman anti
trust law.
The court is asked to decree the scheme
unlawful, to enjoin the valorization COM
nittee from Withholding coffee from the
market and to appoint receiver to sell
the 100000 bags. valued at S1OO0O.oOo.
now alleged to be stored in warehouses
Of the New York Dock Company. The
government also applied for a temporary
injunction restraining the valorization
committee from removing or disposing
Of coffee held in America pending the
termination of the issue.
The members of the valoriza ton COM
mittee have agreed and conspired
among themselves, the government
charges. to withhold from the market
large quantities of coffee under their
control for the purpose of raising the
price to an unnatural and unreasona BILE
extent. They thus have attempted it
i declared, to restrain the coffee trade
throughout the world. including inter-
STATE state and foreign commerce of the
fraud the public for their own enrich
ment.
Becomes International Question.
The suit has distinctly international
color The Brazilian state of Sac Paulo.
the greatest coffee district in the world.
Is party to the agreements which are de-
clared unlawful in America The gov
eminent holds that the Brazilian state
was induced to enact laws and enter into
agreements in connection with the velori-
Zation plan by those interested in main
tanning and increasing the price of coffee
The fact that the alleged agreements
and conspiracies were not unlawful in
Brazil, and were participated in by a
foreign state, the government holds, can
not justify the commission of any act in
the United States TO restrain trade.
The defendants are Herman Sielcken
of New York, Baron Bruno Schroeder of
Edcuard Bunge of Antwerp. L. E. Vi
comte Des Tourches OF Havre, DR..
Paulo Da Silva Prado of Sac Pauio.
1heodor Willie of Hamburg. the Societe
Dock Company. All the defendants ex-
cept the last named are members of the
yalorization committee.
William T. Chantland. special assistant
10 the Attorney General, who investigated
the alleged trust, has charge Of the gov
ernments case, With jesse G. Adkins,
assistant attorney general, he brought
The bill to New York and conducted the
proceedings.
Effect of Valorization.
The immediate effect of valorization
vas to withdraw from commerce 10S6S.-
I'D bags of coffee. says the petition. The
price of Rio No. Z. 1t is pointed out as an
illustration. has risen from IL cents per
iy ltO per cent.
The petition says the amount of money
realized by individuals from the valoriza-
tion scheme clearly shows that its real
purpose was to enrich those instigating
IL. and not to help the Brazilian state OF
Sac Paulo.
The S15.OG0,oo0 loan made to Sac Paulo
by ]. Henry Schroeder & Co. of London
and the Nat .onal City Bank of New York
in 1906. it Is declared, cost Sac Paulo
more than ~ per cent by reason of in
tereSt. discount, charges for handling the
loan and the expenses in connection With
il.
The expense of carrying into effect the
valor.zaton scheme through loan OF
$15,0O,O00 In 1905 has cost the govern
ment estimates, 3l1 cents per pound for
every pound of coffee held by Sac Paulo
for valorizat on
The defendants come within the scope
of the Sherman law, 1t is declared. be-
cause their purpose was to reduce the
worlds supply of coffee, restrain its ex-
pcrtation from Brill to foreign countries,
including the United States. which re-
ce:ves - per cent of the Brazilian crop.
Direct Restraint Alleged.
As the United States consumes a. per
cent OF all the coffee sold in the world,
the petition declares that every act which
prevents its importation in normal guam
titles or increases prices is d direct re-
stra;nt upon foreign and interstate trade.
The petition recites in detail laws
agreements and contracts entered into by
Sac Paulo and ratified by the Brazilian
federal government for the valorization
of coffee.
The coffee crop in 1867 was the
largest IL the worlds history aggre-
eating 23,Sli0O bags This great pro-
duction. II is alleged. caused those in
terested in increasing the price of cof-
fee TO procure the passage by Sac Paulo
Of laws levying export taxes on coffees
and providing for loans u finance the
vaiorizatlon scheme now in effect.
The SIJopO.UD loan In 1908. made to
Sac Paulo by J. Henry Schroeder x
60. Of London and the Society Generate
81 Paris. was guaranteed. not only by
surtax and levies on expectation made by
the state. but also by 6.1,i $40
bags OF coffee which Sac Paulo had in
New York and Europe. This is the
valorization coffee in charge of the COM
mittee of seven. The state obligates itself
10 permit the sale OF limited number
OF bags yearly at the prevailing market
price. These sales have reduced the
amount in the hands OF the committee
between +.no0oob and 5.0oo.0o. OF which
there are said to be $4,000 bags
stored in New York.
Moved TO Prompt Action.
The Department of Justice was stirred
To quick action in filing the antitrust