Evening star., 1923-12-13
in TODAY'S SPOTLIGHT
BY PAUL y. COLLINS

Brazil has met the predicament of
its coffee raisers by governmental
purchase and marketing Of the cof-
fee crop. The crisis appears Cat
least superficially) 20 be very SINH
lar to the conditions of our own
wheat crop. The experience, there
fore, of the Brazilians In carrying
into practice government marketing
is of unusual interest In this coun-
try, because Brazil has actually done
what the Secretary of Agriculture.
backed by the farm bloc and other
farm leaders. is demanding for the
relief of our wheat farmers. How
has the Brazilian plan worked out?
X \
Coffee constitutes more than half
the exports Of Brazil. That coun-
try supplies so per cent of the oof-
fee of the world. Brazil, therefore.
Is in a position to influence the world
market for coffee as directly as a
speculator who corners 80 per cent
of the grain can dictate marke ct
prices
The Brazilian coffee raiser. like the
American wheat raiser, is a one-crop
speculator. In 1s0S-07 the world
production began to exceed the de-
mand. and falling prices threatened
ruin. The state of Sac Paulo, where
four-ffths OF Brazils coffee is pro-
duccd. obtained II loan of 5000, 900
pounds sterling on the credit Of an
export tax on coffee. With this fund
the state bought from the producers
S,500,000 sacks OF coffee. which it
warehoused and subsequently sold
at fair price.
AT the same time a law was passed
by the state forbidding further in
crea, q of coffee planting precau-
tion which none Of our farm inter-
ests has yet proposed in licensing
wheat acreage. 10 control over
produotion' product and taxing wheat as
In 1917 there came a second crisis
In coffee, owing to the falling-off of
demand by war stricken Europe The
federal government emitted paper
money, which it loaned to the state
OF Sac Paulo to buy coffee, not only
from its own planters but from those
or adjoining states. which coffee was
retired from market-eXactly as pro-
eral government should do with our
excess wheat.
In 1921 came the third "valoriza-
tion." as this transaction IS called.
The state of Sac Paulo then felt that
Its resources were insufficient to
finance the situation, and il called
upon the federal government for help.
II was then not alone the planters
who were in jeopardy. but the banks
which had loaned money TO them and
taken mortgage which they had fore
closed.
The government issued more paper
money with which II made federal
purchases OF coffee, and then bor-
rCwed 100000 pounds sterling on
the coffee.
Through these three "valorizations''
the federal government has gradually
gotten into a socialiZed coffee brok-
erage for the protection Of its plant
ers and bankers. Out of that situa-
tion has recently come Il law for the
establishment of permanent coffee
defense commission, and to create q
fund for its use d tax on coffee eX-
ports is assessed. This permanent
coffee defense, together with the un-
loading Of the present government
stocks OF coffee, will close Brazirs
socialization and marketing of coffee
aside from the permanent defense,
similar TO our grain corporation.
loan of 100000 pounds sterling will
he made to finance the permanent
coffee defense until the export tax
creates sufficient funds. Laws give IL