Evening star. [volume] (Washington, D.C.) 1854-1972, 1926-01-31
BRAZIL COFFEE MONOPOLY
MULCTS AMERICAN PUBLIC
Small Toll Exacted by State OF Sac
Paulo From Almost Every
Breakfast Table.

fact that In 1918 the Brazilian gov.
eminent bought 100000 bags OF
coffee at around s to 9 cents pound
and sold this coffee at a market price
around 16 cents or nearly 100 per
cent profit. The profit indicates the
strength Of the monopoly. Again, IN
1921. the Brazilian government bought
100000 bags of coffee at between
and cents a pound and sold this
stock at around II cents per pound.
Turned Over to State.
.. How did this monopoly come
about?
A. The monopoly was first organized
In 1906 by the federal government,
but It was later turned over to the
Sac Paulo state government. The
original plan was to secure loans for
the purchase Of coffee when 1t glutted
the market and its price was IN
profitable. The first purchase was
made in 1913, when about 10000
900 bags (132 pounds each) We're
bought and stored with loans ad-
vanced by foreign merchants who
were given preferential buying ad-
vantages. This stored supply was
liquidated during 1911-13. The sec
ond purchase. of 10000 bags. was
made In 1915 and Equidated in 1919,
and the third purchase in 1921 and
sold In 1928. The government has
exercised its control over the move
ment of coffee from the interior to
the ports by building IL large ware
houses IN the interior.
Q. Is there any monopoly in the
United States that distributes the
coffee purchased from the Brazilian
monopoly? I ask this because IT
would do the American people no good
S,,N, I'll 10
monopoly If the distribution Of a
competitive product was handled by
an American monopoly. The price
wouldn't come down for the American
consumer.
No Monopoly Here.
A. There Is no evidence of any col
fusion or monopoly among those i'm
porting coffee. Coffee is imported
principally at New York. New Or
leans and San Francisco. These three
ports apparently are IN strong COM
petition. In addition there are about
$50 coffee roasters who are in strong
competition.
q. What is the Importance eco
no,nically to the average American
household?
A. We consume about I2i9 pounds
Of coffee per capita annually. For
the average family of five this would
average more than 60 pounds OF coffee
per family. The retail price during
the last year has averaged about 30
cents a pound, which amounts to $50
q year for the average family. This
Is probably not an undue burden on
the higher income families, but on the
lower incomes difference of 10 to Is
cents a pound is a considerable item.
Q. How should this Brazilian
monopoly he comhated?
Means of Retaliation.
A. There could he Government re-
taliation. but this would result IN an
aggravated international situation
which might be very dangerous. There
are other ways, however, that cannot
be criticized. We could stimulate cot
fee production in competing countries.
There is a large undeveloped territory
in Central America and countries Dor
dering on the Caribbean where the
finest grades Of coffee can be produced.
American capital can develop coffee
production there and effectively com
bat the Brazilian monopoly. Our bank
ers have refused loans to Brazil for
the financing Of the monopoly. This
has helped. Publicity and investiga-
ton will exert a beneficial pressure.
Finally 6. collective buying agency has
been suggested.
Q. But Is not that the distrtbutiTe
trust and may 1t not be Just as bad?
A. OF course such a plan would
have to be carefully safeguarded IN or
der to protect the American consumer
from any exploitation from an Ameri
can coffee monopoly. The antitrust
laws would, no doubt, be invoked If
such a danger arose.
Q. What international III feeling
has been engendered by the coffee, nj
trate and rubber exposures?
A. The best answer is Secretary
Hoover's words before the congress
sional investigator committee:
THE departments OF our Govern
ment have been visited not once, but
scores of times during the past year
by business men demanding that the
administration save them from injury.
Our public resent what they consi6""
as an injustice and Jeopardy to their
interests on the part of foreign gov
ernments. International prejudice Is
consequently stirred. Thus the state
of governments are drag
ged into the chickering's and higgHngs
of the market with innumerable new
frictions every day. There is acri-
monious discussion at home and over
seas. Our Government cannot ignore
the situation. Even II our officials
were to remain silent, the problem
could not be depressed in the public
mind"
Copyright. 1920