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PARAGRAPH 541–COFFEE.

In further substantiation we quote from the report of Mr. Buchanan, a director in the Dumont coffee estates:

“The advice I tendered to the directors when I came home was that we should increase the number of trees which we prune each year. For some years back we have always pruded a certain proportion, according to the labor which we have been able to get; but I strongly recommend to the board that they should try to increase this, for not only does pruning increase the yield and improve the trees, but it also tends to regulate the quantity of crops which we get from the whole estate every year, and it is a most desirable thing that we should get an even crop from the whole estate every year.

Further, we believe that considerable weight should be given to the belief that actual increased acreage will to some extent offset the unfavorable appearance of the flowering, and rightly should be considered in approximating the total fructification.

To many who have accepted at its face value the law which prohibited new planting, this perhaps will be startling information, but let the facts speak for themselves.

Mr. Nortz, in commenting upon statistics compiled by Mr. Gomez Texeira, notes:

“That of the 657,000,000 trees in the State of Sao Paulo, 120,000,000 are from one to eight years old; therefore few of them contributed to the large crop of 1906–7. I may also add that 20,000,000 of these trees have been secretly planted during the years of prohibition.

"Although the law preventing making new plantations has not yet been abolished, and although there are many people in Brazil who believe that it will continue to be applied, we have not met a planter in the interior of Sao Paulo who has not said he was ready to plant a certain quantity of trees, generally in the proportion of 10 to 20 per cent of what they already own.

“ The truth is that for six months or so there has been a sort of fever among the planters of the State of Sao Paulo to plant new trees, especially since some of the larger planters have had certain privileges submitted to them which would make it easy for them.

An offer of 2,750 contos de reis ($88,000) has been offered for a plantation at Ilba Grande (Soracabana), containing 550,000 square feet of trees in full force of production and 275,000 square feet that will not begin producing until next year. These latter trees are only four years old. We know of new trees having been planted in Baurs, Bebduro, Parana, etc., where the soil is fairly good. Those planting in the last-named State are not confronted with the tax of 5 francs per bag (which did not previously exist in the State of Sao Paulo), which is naturally an inducement for these planters to go into it, and for this reason, in spite of the higher railway freight rate, the planter in the State of Parana is placed in a much better position than in the adjacent districts of Sao Paulo."

From a careful review of all the facts, we can not persuade ourselves that despite the clamor of irregular flowering, the crop will be as small as 7,000,000 bags Santos, predicted by the leading bull interests; in all probability it will be normal, say 9 to 9 million Santos. This, with the release of say 1 to 14 million bags of valorization holdings and the conceded large crop of mild coffees, should not warrant any advance of values. We rather look for prices to recede considerably, believing that manipulation which has solely dominated our market for the past year can not go on continuously, for as surely as water seeks its level, so will the inexorable law of economic adjustment prevail. Wishing you the compliments of the season, Respectfully,

P.J. SHANNON & Co.

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2,343,000

925,000 7,554, 732 3,987, 476 1,304,800 12,096,304

Stocks:

Santos.
Rio.
Europe...

United States.
Arrivals principal ports of Europe:

During May.

From July 1 to June 1.
Arrivals principal ports of United States:

During May..
From July 1 to June 1..
Deliveries principal ports of Europe:

During Yay:
From July i to June 1.
Deliveries principal ports of United States:

During May...

From July 1 to June 1..
Milreis price per 10 kilos exchange standard

No. 7 Santos.
Milreis price per 10 kilos exchange standard

No. 7 Rio.
Rio exchange (par value 27d.)...

...
Bid price of June option closing June 1..
Bid price for May option during that month:

Highest..

Lowest.
Spot quotations of Rio exchange standard
No.7.

961,000 1,778,000 496,000 729,000
335,000 170,000

80,000

216,000 7,278, 129 8,771,695 8,270,132 9, 457,956 2,441, 441 3,332, 644

3,873,197 3,415, 329 684,394 555, 420

433, 187 622,375 8, 229,757 10,836,344 9, 287, 117 | 11,427,301

381, 421 229, 154 207,579 442,701 5,879, 707

6, 440, 529 7,588,079 6,056,778 1,026, 572 772,517 799, 294 719,961 9,509, 680 10,039, 430 10,352, 063 9,698, 185

472,985 385, 966 375, 755 554,898 6, 460, 047 6,843, 134 7,147,063 6,561,396

6$250 3$850 3$450 3$400

551, 620 6,830, 339

953,499 9,613,309

555, 440 6,518,849

29600

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Production and consumption of all kinds of coffee for the last 20 years.

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172

121

160 104 152 13 77

1800-1.. 1991-92. 1992-2. 10 94. 184-95. 1895-99, 18-97.. 1897-99..

99 1999 1900. 1900-1901. 1991-2.... 1902-3... 1903.. 19945 1915-6.. 1900-7.. 1907-8. 1902 9.. 190+10...

5,358,000 3,905, 000 9,323,000 8,718, 661 604,339
7,397,000 4,582,000 11,979,000 10, 804,551 1, 174, 449
6, 202,000 5,082,00011, 284,000 10,946, 228 337,772
4,309,000 5,092, 000 9, 401,000 10,571, 533
6.095,000 5,009,000 11,764,000 11, 212, 851

551, 149
5, 476,000 4,901,000 10,377,000 11, 142, 813
8,680,000 5,238.000 13,918,000 12, 241, 204 1,673, 796
10, 462,000 5,596,000 16,058,000 14,571, 902 1,486,098
8,771,000 4,985, 000 13,750,000 13,480,904

275,096
8,959,000 4,842, 000 13,801,000 14,972, 699
10,927,000 4,173,000 15,100,000 14,329, 925 770, 075
15, 439,000 4,296,000 19, 735,000 15,516,663 4,218, 337
12,324,000 4,340,000 16,664,000 15,966, 498 697,502
10,408,000 5,575,000 15,983, 000 16, 133, 707
9,968,000 4,450,000 14, 448,000 16,163, 353
10, 227,000 4,5-5,000 14,792,000 16,741, 215
19, 654,000 4,160,000 23,814,000 17,544, 750 6,269, 250
10,283,000 4,551,000 14,834,000 17,525, 418
12, 419,000 4,499,000 16,918,000 18,649, 002
14,944,000 4,181,000 19, 125,000 18,098, 474 1,026, 526

1891.. 11892..

1893.. 1, 170, 333 1894..

1895..
765, 813 1896..

1897..
1898.

1899..
1,171, 699 1900..

1901..
1902..

1903.
150, 707 :904..
1,715, 353 1905..
1,949, 215 1906..

1907.. 2, 691, #18 1908.. 1,731, 602 1909..

814

1,909, 120 2,955, 023 3, 100,618 2, 146, 423 3, 115, 680 2,588, 193 3,975, 880 5, 435,974 6,200,013 5,840,561 6,867, 627 11, 261,331 11, 900, 173 12,361, 454 11, 265, 510

9,636,563 16,399,954 14, 126, 2271 12,841,0571 13,719,530

1910..

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PARAGRAPH 541-COFFEE.

Average price of spot Rio 78 on July 1 for last 20 years 9.44.

Note.—These statistics are issued monthly and made up from figures of the Coffee Exchange of the City of New York. We suggested that they be filed for reference.

Compliments of Steinwender Stoffregen & Co., 87 and 89 Wall Street, New York. JUNE 1, 1911.

BRIEF OF R. E. HILLS, DELAWARE, OHIO.

HOUSE OF REPRESENTATIVES,

Washington, July 13, 1912. Hon. Oscar UNDERWOOD,

House of Representatives. Dear MR. UNDERWOOD: I am taking the liberty of sending you herewith a letter from Mr. R. E. Hills of the V. T. Hills Co., wholesale grocers, of Delaware, Ohio, relative to the valorization of coffee. Of course I do not know whether any further tariff legislation is contemplated at this session of Congress, but I thought it appropriate to get the suggestion of Mr. Hills to you. I know Mr. Hills personally, and he is a very competent and successful business man and gives much attention to public questions. Thanking you for any attention you may be able to give this matter, I am, Yours, very respectfully,

FRANK B. WILLIS.

DELAWARE, Ohio, July 11, 1912 Hon. FRANK B. WILLIS,

House of Representatives, Washington, D. C. MY DEAR MR. Willis: I have been considerably exercised recently, and indeed for some time past, by the situation in this country in connection with the price of Brazilian coffee. You are aware, without doubt, of the fact that the price of Rio and Santos coffees in this country to the consumer has been increased just about 100 per cent since the valorization scheme has been in operation, largely as the result of the scheme.

This is not particularly a matter which concerns the wholesale or the retail dealer in this commodity. Our profit is largely governed by percentage arrangement, and therefore, on coffee selling to the retail dealer at 24 cents we make more profit per pound than if we sold the same goods at 12 cents, but, in the interest of the consumer, it is a matter of concern to the dealers.

I notice the Government has been embarrassed recently in one départment by another department bringing suit against a stock of this coffee in New York City. I notice also that France has gone after the same parties for the same reason.

Now I am not much of a statesman, but it has occurred to me in thinking over the situation that the proper way to deal with Brazil in this matter is by means of retaliatory legislation. If reciprocity is good why not use a little negative reciprocity in this kind of a case. The solution seems simple, which would simply be of levying an import tax on coffee coming from a country levying an export tax on the same goods, and I would favor making the import tax 100 per cent larger than the export tax from the producing country. The immediate effect of this of course would be to increase the cost of these goods to our consumers, but the ultimate effect would be to encourage the importation from countries located in Mexico, Central America, and the northern part of South America, which to-day produce as good coffees as we are getting now from Santos.

It has taken Brazil something like five years (I have not the dates at hand) to bring about the present conditions which are such as show a profit to the producers in Brazil and a tremendous profit to the syndicate which has handled the loan and purchase. I figure that in the course of a few years on the plan that I suggest we would be importing the bulk of our South American grades of coffee at a cost to our consumers of not over 60 per cent of what these goods cost them now.

It may be, Mr. Willis, that this is a question you have thought of and thought out much more fully than I have, and if my suggestions are not worth considering or for arry reason are entirely impracticable, I would not ask you to consider them further, but I am impressed with the fact that the Government of Brazil and the government of three of their individual States and the syndicate of European and American capitalists, who have been parties to this deal, have reaped enormous profits and the consuming public has p:id the bill, and it seems is if we of the United States are

PARAGRAPH 541-COFFEE. sitting still and drinking our usual morning cup of coffee with perfect equanimity and acting as if we were entirely willing to be parties to this transaction. Yours, sincerely,

R. E. Hills. LETTER OF T. E. JAMISON, ROANOKE, VA.

ROANOKE, VA., December 20, 1911. Hon. OSCAR W. UNDERWOOD,

Chairman Ways and Means Committee, Washington, D. C. DEAR SIR: I have been requested to address you in reference to the situation on coffee, and as I am writing Hon. Thos. Gallagher, I herewith inclose to you copy of my letter, which expresses my views in reference to coffee. If I can be of further service, please command me. Yours, very truly,

T. E. JAMISON.

DECEMBER 20, 1911. Hon. Thos. GALLAGHER, M. C.,

Washington, D. C. DEAR SIR: I beg to acknowledge receipt of your favor of December 15, and note very careiully what you have to say in reference to coffee. There is no question in my mind but what the coffee market has been manipulated in the last two years in such a manner as to advance prices very materially and to exact from the consumer more money than, in my judgment, is necessary, as when you take into consideration the amount of coffee in sight including the amount in the hands of the valorization committee there is no scarcity of coffee.

I suggested a plan to Hon. G. W. Norris some time ago to place an internal revenue tax on all dealers in coffee that handle more that 200,000 bags, based on 130 pounds to the bag, or 26,000,000 pounds annually. Any excess of this quantity, up to 50,000 bags additional, or 6,500,000 pounds, to bear one-half cent per pound internal revenue tax. The tax then to increase in multiples of one-half cent per pound on each additional 50,000 bags, or 6,500,000 pounds. All coffee bought on exchange anywhere in the United States to be counted as spot coffee.

The object of this plan is to allow all dealers in coffee to do a very large volume of business without paying any internal revenue tax and to permit all coffee on import to be free of duty. This plan is absolutely fair to all dealers, and in my judgment, would prevent any concern from cornering the market and controlling the price of coffee.

I have been informed that the valorization committee has over a million bags of mffee in storage in New York. Under this plan the valorization coffee, if the law were effective, would bring a revenue to the Government under this plan of more than $4,000,000. I can not help but believe that the valorization scheme is responsible to a large extent for our present high price on coffee and if this is true, which I believe it is, the Brazilian Government has exacted from the consumers of this country on account of the valorization scheme millions and millions of dollars. It would be hard to estimate the amount, but as this country consumes from nine to eleven pounds of coffee per capita, based on 90,000,000 people, that would be 900,000,000 pounds of coffee.

No. 7 exchange standards have advanced about 6 cents per pound in the last two years, and according to this estimate it would amount to $54,000,000. If the above plan were adopted it would prevent at any time in the future any cornering or manipulation of prices, for the reason that no one dealer could accumulate large quantities of coffee without paying an internal-revenue tax; while, on the other hand, any dealer could continue to import coffee free of duty.

It has been suggested that a better way to handle the coffee situation would be to allow this country to import up to the limit of consumption and in addition to this quantity to place an import duty. in my judgment, would have a tendency to induce large moneyed interests to purchase large quantities of coffee, for the reason that when they had controlled the amount up to the limit of consumption any additional imports would pay a duty which would encourage and foster speculation and would assist in helping to corner the coffee in this country.

I have given the coffee situation very careful study for the last two years, and honestly believe that the plan suggested would solve the problem of most of our troubles in reference to coffee. I doubt exceedingly if there are half dozen dealers in this country that would handle more than 26,000,000 pounds of coffee annually.

PARAGRAPH 543-COIR YARN.

I therefore trust that you may find some fruit in my suggestion and that you may be able to work out a plan that will be effective. If I can be of further assistance, I will gladly come to Washington and go into the matter with you more thoroughly.

Yours, very truly.

PARAGRAPH 542.

Coins of gold, silver, copper, or other metal.
PARAGRAPH 543.
Coir, and coir yarn.

COIR YARN.

TESTIMONY OF FRED M. CLEVELAND, REPRESENTING JOSEPH

WILD & CO., AND HEYWOOD BROS. & WAKEFIELD, WAKEFIELD, MASS.

The witness was duly sworn by the chairman.

Mr. CLEVELAND. Mr. Chairman, I wish to speak in regard to the free list, in regard to two items. We, manufacturers of cocoa mats and matting, request that coir yarn, or cocoa yarn or fiber, which are imported free of duty under section 543 of the free list, be left upon the free list in any revision of the tariff which may be suggested by your committee.

The materials that we use in the manufacture of doormats and cocoa mattings are not products of this country at all. The entire supply is produced on the Malabar Coast of India and on the Island of Ceylon, with probably more than 90 per cent of the production being on the Malabar Coast. There is no cocoa fiber made in this country or its dependencies, and no cocoa yarn is spun in this country. Cocoa yarn and cocoa fiber are imported free of duty into Germany, Belgium, and Great Britain, where there is extensive manufacturing of cocoa mats and cocoa mattings. The prices paid in these countries for the labor in manufacturing mats and mattings are very much lower than the prices paid in the United States, and any duties placed upon the raw material of the American manufacturers will be a most serious handicap to them in competing against the steadily growing sale of mats and mattings imported into the United States from these countries. We could not stand under any duty on those in competition with the manufacturers in foreign countries.

Mr. Harrison. Does not your product come into competition with the mattings made out of the Japanese and Chinese straws?

Mr. CLEVELAND. Not at all, sir; it is different kind of matting; very limited in its sale.

Nir. Harrison. Does it come into competition with the floor coverings made out of wire grass in Minnesota?

Mr. CLEVELAND. It has been put largely out of business by the mattings made out of wire grass, made in Minnesota. We sell very little matting as compared with what we used to, for the reason that the wire-grass matting is very much cheaper than the cocoa matting can be made; there is still a limited use for cocoa matting, and you will probably find it in any hotel, a strip laid down on a rainy day.

The CHAIRMAN. Go ahead with your statement.

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