The evening times. [volume] (Grand Forks, N.D.) 1906-1914, 1912-05-17
THEY HELPED THE
COFFEE TRUST
Three Banking Institutions
Helped Brazil Finance the
Government Coffee Pool

Washington. May 1.-THE first il.
lustration of the activities of the so.
called money trust" given to the
house investigating committee today
was testimony that three New Yorl
banking institutions, the National City
j. PierpOnt Morgan and company. anC
the First National. lent financial as.
sistance to the government Of Brazi
to limit the output of coffee and main.
tain prices of coffee at profitable
figure, for the benefit of the Brazilian
planters and American and European
coffee dealers.
This testimony came from Herman
Sielcken of the New York firm OF
Crossman and Sielcken, large dealers
in green coffee. Mr.. Sielcken was or
the stand more than three hours anG
his testimony was the first or oral in.
formation given to the committee.
Mr.. Seilcken attributed to the Ma.
tibnal City bank patriotic motive fol
it's investment. He regarded the loan
by the bank as of great benefit to the
United States and said that the bank
made the loan reluctantly to exploit
American trade with South America
Mr.. Seilcken was mildly excited al
several points of his testimony. He
questioned the propriety of the com.
mittee going into Brazifs affairs. and
the attorney general of the United
States and all the attorneys of the
country to discover any illegality in
his actions as Il coffee merchant
"My business has been pried into
by the attorney general and by grand
juries and my connection with this
valorization plan has been criticized
for this committee" said MIR. Sielcken
with SOmc heat
The witness said that unless some.
thing had been done to help the plant.
ers Of Brazil there might have beer
a revolution. The price of coffee had
grown so low through over production
that the Brazilian government exer-
cised its right to encourage planters
to diversity their crops. He said that
while tax had been put on the plant
ing of coffee the Brazilian government
and the state of Sac Paulo had not
tried to prohibit the planting
(Which would have been the worse
revolution in San Paulo or for the
consumers of this country to pay
much more for all Of their coffee q
asked Samuel Untermyer. counsel for
the committee.
You would have had to pay tina,
anyhow" said Mr.. Sielcken. He
argued that coffee would be still high
er " +~a valorization scheme had not
been put into operation.
Mr.. Untermyer read from tables to
show that the production of coffee for
several years amounted to but 6,0OO,-
900 bags and that 1t sold at from six
and one-half to seven cents a pound
Now the production was 100000
bags and the price was between thir-
teen and fourteen cents a pound. This
was accomplished by withholding from
the market the surplus supply of cof-
fee. he said.
Mr.. Seilcken testified that there was
100000 bags Of coffee now being
held out Of the market by the valoriza-
ton committee of seven. of which he
was member. OF that amount 900.-
006 bags were in warehouses of the
New York Dock company. he said.
would not the price of the coffee
60 down II this were put OIL the mar
ket?" Representative Byrnes asked
"No, 1t would have no effect on the
market" Mr.. Sielcken answered.
The big loan by which the valoriza-
ton scheme was floated was 15.OO0,-
900 pounds sterling. English. Ger
man, French and Belgian bankers took
100000 of 1t through j. H. Schroe-
der Of London. who sold to the Ma
tional City bank 100000 pounds
sterling. This amount was pro-rated
between the Morgan bank. the Nation
al City and the First National.