The Dawson news. (Dawson, Ga.) 1889-current, 1912-06-01
THE GREAT COFFEE TRUST
INTERNATIONAL GROUP WHICH
FIXES THE WORLDS PRICES.
Governments Suit Against Combine
Promises Interesting Develop
ments. Formation of Trust.

PROMISES interesting Develop
ments. Formation of Trust.
NEW YORK.-Interest interna-
tional in scope has been aroused by
the action begun by the government
to break UP the coffee trust and
bring the price down from the arti-
fetal figures established by half a
dozen men who control the coffee
supply of the world. The action was
instituted by the federal district
court in New York by Henry A
Wise, United States attorney; and if
Mr.. Wise is successful $4,000 bags
of coffee, now stored in the ware
houses of the New York Dock Com
pany, Brooklyn, will be seized by the
government and sold at auction for
whatever price the worlds demand
creates.
Forty per cent of the worlds an
nual consumption of about 18,000,-
600 bags of coffee is marketed in this
fact that since 1906 the coffee pro-
duction of the world has largely ex-
ceeded the demand the price has
jumped from 70 cents a pound in
1906 to p cents a pound in 1911,
and in that year alone the United
States paid tax of more than $46,-
100000 to the coffee trust.
1t is to remedy this condition that
the government suit, which was pre-
pared at Washington under the di-
rection of Attorney General Wicker
sham, was instituted. The only rep
resentative of the trust in this coun-
try is Herman Sleicken and he and
the New York Dock Company are re-
strained by a court order from re-
moving or disposing of the $4,000
bags of coffee held in storage. The
other defendants to the suit belong in
London, Belgium, France, Germany
and Brazil. These defendants, with
Sleicken, comprise the committee
formed to fix the price of coffee for
the world and the amount to be sup
piled annually to the worlds mar
kets.
Formation of the Trust. q
The inception of the scheme to
form a combine to control the coffee
supply of the world came into being
with the production of a bumper
crop in the state of Sac Paulo, in
Brazil in 1905-06. In that season
the production jumped from 14,800,-
900 bags to 29,S0O,00O bags, and it
the bottom would drop out of prices.
The result was that Sac Paulo form
ed a contract with foreign bankers
whereby a loan of 100000 was
| advanced for the purpose Of buy
| ing up and holding the worlds sup
ply OF coffee At the same time the
supply to be furnished the world
was restricted to 18,00O,0O00 bags.
Later other similar deals were en-
ers and merchants were made the
arbiters of the coffee markets of the
world
The republic of Brazil, which fur
nishes 20 per cent of the worlds COT
fee, guaranteed the loans and an ex-
| port tax Of 80 cents a bag was placed
on all coffee shipped from Brazil to
provide a sinking fund to repay
them. The stock of 100000 bags
held by the state of Sac Paulo in
various cities in Europe was turned
over to committee, which was
formed to buy the worlds coffee and
fix prices. The committee at once
began buying coffee and storing it
and presently was in a condition to
dictate prices and apportion the
amount of coffee to be marketed. It's
power up to the present is absolute.
What effect the government suit
may have in reducing prices is prob
lematical Even if the government
won and succeeded in obtaining pos
session of the 100000 bags Of coffee
there is nothing to prevent the trust
to buy them at auction and thus re-
tain control of the coffee trade in this
country. 1t is likely, therefore, that
congress may be asked to pass a law
prohibiting the Importation of coffee
into the country for the purpose of
cornering the market. This would be
a serious blow to the trust, as the
United States furnishes one of the
best markets in the world for coffee.
We consume 40 per cent of the
worlds production, and if this farket
ket were closed to the trust the com
bine would speedily die and prices
would again be controlled by the law
OF supply and demand