Evening star., 1923-05-30
BRAZIL NEEDS LOAN
UPON COFFEE CROP
Planters Must Have Aid or
Wide Changes in Prices in
U. S. Are Likely.
BY j. c. R0YLE.

Special Dispatch to The Star.
NEW YORK. Nav 30.-"And a cup
of coffee
Scores of millions of meals wind
up in just that way daily throughout
the United States. But the sum which
that cup Of coffee will cost in the
next six weeks or two months de-
ncnds largely on whether the repub-
lie of Brazil can borrow a large sum
of money from some other nation.
According to the Department of
Commerce, the United States now mas
only sufficient coffee in store here
and bound to American ports to sup
Fly the country for five weeks. The
coffee cups of this country require
$4,000 bags month to keep them
full.
The rrice in Brazil. from whence
this country draws its main supply
is higher than the price for raw COT
fee in this country. Brazil is at
tempting to keep ii up through the
process Of valoriZation, which simply
means an attempt TO give an I;, aIui-
tuary market value to commodity
through governmental interference:
The methods may include purchase OF
coffee by the government TO keep IL
from coming on the world market OF
the making of loans to producers
crops
Rumper Crop i'm Prospect.
Under ordinary circumstances, with
culy FIVE weeks supply on hand or
in. prices for coffee here normally
would rise to at least the level main
tained in Brazil. Brazil. however,
has a bumper crop in prospect Estl-
Last 100000 bags from the Santos
district alone and for the whole coun-
tiy more than the world can consume
in the coming season.
As a result importers, brokers and
Merchants are not buying coffee at
present. believing that lower prices
are bound to come.
There is an entire lack of con-
fiiicnCe in the present situation on
the part of brokers and coffee mer-
chants in the United States in view
of the prospective bumper crop in
Brazil" II. j. Fallon of the large
coffee firm of Lamborne Hutchins n
Co. said today.
Already it is known that Brazil
has been refused d loan by Great
Pritain to finance the coming crop
and prevent it being poured on the
market with a consequent break in
prices. The only other alternative
coffee men see for Brazil would he
To buy the coffee from the planters
by means of an issue of paper notes
which would mean weakness in
Brazilian exchange which would be
bound to affect the country detri-
mentally.
Effort to Limit Shipments.
An effort is being made to restrict
shipments to Santos and Rio to f5,-
600 bags. day. but if this is done
il will put tremendous pressure on
store their unsold production and
who have little chance of borrowing
on it except from the government.
The valorization plan in 1907 was
successful, but in that year output
fell far below expectations, whereas
this year weather conditions have
been ideal and tremendous crop is
probable.
The new crop will begin to come on
the market about July l. If Brazil can
not float a loan before that time and
provide her planters with enough
cash so that the crop will come on
brokers and dealers feel that lower
prices are in prospect. Consequently
they are not buying coffee at present
prices and they hope that present
stock will last until a flood of coffee
from the new crop comes on the
market.
There admittedly is narrow margin
in these calculations and If the stocks
run short there is possibility of tenn
porarily higher prices even though Bra
zil does not successfully negotiate
loan.
In addition the voyage from Bra
lillian ports to this country is not a short
one and coffee shipped as soon as the
new crop comes on the market, would
have a limited time in which to reach
American consumers provided the pres
ent stocks do not hold out.
Discuss building Situation.
Leaders of both employers and work
CTS in the building trades in many sec
tjuHS of the country spent much of to-
day in discussing the wage and cost
situations with their assistants in an ef-
fort to arrive at some basis upon
which Il definite settlement may be
based without checking progress in
this great industry. General indications
were that there would be no wide
spread stoppage of work June l.