The daily worker. [volume] (Chicago, Ill.) 1924-1958, 1928-10-10

BRAZIL COFFEE
CAUSE OF U. S.
! BRITISH FIGHT
Importers Try to Break
Price Monopoly

SAC PAULO, Brazil, Oct. "a
new British American shuttle for
South American business has broken
out, this time in the coffee business
of Brazil, the chief coffee producer
in the world. The trade war prom
Uses to assume critical stage in
view of the fact that 100000
British dollars are at stake and pro-
fits of American import firms are
threatened.
The whole matter is now being
seriously discussed in the Brazilian
press and was brought to the atten-
ton of the public by the decision of
American importers to boycott Bra
lillian coffee, or at least buy just
enough to meet home demands I'M
til other markets are monopolized.
This action was taken in an attempt
to force the Coffee Institute of
Brazil, financed by British loans, to
lower it's prices on coffee.
Brazil Monopoly.
The coffee industry of Brazil has
developed by leaps and bounds dur
ing the last few years until it has
become the chief coffee source of the
world. The coffee growers, as soon
as their industry assumed world
wide Importance and became the
chief source of income in the state
of Sac Paulo, assured a monopoly
price on their products by organic
ing the Coffee Institute, which is
nothing more or less than a trust
of the principal coffee growers in
Brazil.
The crop, however, proves to be
SO great that much of it has to be
kept in storage and sold abroad in
large quantities. To finance the
growers until they can sell their
crop a large system of credits was
necessary, for which the Coffee In
stitute got its funds from London
bankers. To cap the situation the
Brazilian government is intimately
concerned with the coffee industry
since it receives the major part of
its revenues from the export tax
on coffee, which finds it's chief con-
sumner in the United States. Besides
the treasurer of the state of Sac
Paulo becomes automatically the
president of the coffee institute.
Government Involved.
That state is built economically
upon its coffee industry and any
change in the structure of industry,
or a sudden reduction in profits,
would dislocate business. Realizing
this the state has cooperated with
the coffee producers consistently,
doing everything to encourage the
business, such as building roads and
railroads for them, again on money
borrowed from England. The state
does not have any other successful
industry, general chaos reigning in
the textile mills.
The coffee institute, with the help
of British capital, has been able thus
far to retain its high price level and
to reap tremendous profits. But a
note of danger has been instilled by
the American producers, who do not
seem to be satisfied with their pro-
fits and are demanding reduction
in the price of coffee. This not forth
coming, the Americans have declared
virtual boycott of Brazilian cof-
fee.
War Clouds.
The editor of the Rio de Janeiro
paper, o. Journal, this morning
pointed to the danger of the Amer
lean sabotage and wrote, america,
directed by the able strategist,
Hoover, fought rubber's valorization
and defeated it. am not surprised
that America plans to do the same
with coffee, for America is doing
it now vigorously, and I call Brazil's
attention to it."
The serious situation, in which
Brazil seems to be caught between
the United States and Britain, has
led DR.. Paulo R. Pestana, director
Of the department Of industry and
commerce to declare, ION the horizon
are surging dark clouds, messengers
of approaching peril"