Coffee: The Epic of a Commodity

by H. E. Jacob

  Harsh measures were unavailing. From year to year, the natives showed themselves more and more disinclined for coffee-growing. Since they were paid for coffee by weight in Colombo, the capital, they had a way of boiling the berries beforehand to make them heavier and larger. Nevertheless, despite such pranks coffee-growing continued to thrive in Ceylon until in 1857 something ominous occurred.

  That was the year of the Sepoy Rebellion, when Britain was hard put to it to maintain her grip on Hindustan. There were massacres of the whites in Cawnpore, Delhi, and elsewhere. During this period, strange birds visited Ceylon and feasted on the ripening berries. Similar invasions of crows had been recorded during the days of Dutch rule. While the English remained unperturbed, or dispersed the birds now and again by a sprinkling of grape-shot, the Cingalese looked anxiously in one another’s brown faces. No doubt the birds would fly away again, but were they really birds? Were they not discontented spirits, whose crooked claws were a token of death and of a curse that had been decreed against the wealth of the English plantations?

  The common folk of Ceylon who made a modest living in other ways than by coffee-planting—cotton-weavers and rice-growers, fishermen and sailors, makers of palm-oil and distillers of arrack, brick-makers and potters—praised the gods that they had nothing to do with coffee, which was doomed to destruction. But the English paid no heed. Wearing white topis and red tunics—red as if stained with blood—they returned from crushing the Indian mutiny. The excrement of the strange birds, the dung with which the plantations were freely besprinkled, did not differ from any other manure. The blue-eyed men, who cared nothing for omens, continued to hold sway over the island.

  But ten years later, in 1867, the Cingalese began to whisper that a disease had attacked the coffee-shrubs. They showed one another leaves spotted with a red vesicular eruption, tiny vesicles at first, and only on the underside of the leaves. Hands and clothing, to which the spores clung, spread the disease everywhere. Three years later this rust had affected two-thirds of the plantations in the island. It attacked only the coffee-shrubs. Rice-fields and coco-nut-palms were unaffected. By the decree of destiny, the deadly organism was deadly only to the coffee-plant.

  From the spores that settled on the leaves, a mycelium grew into the substance of the cells. A reddish-brown eruption covered the leaf and choked it. By 1870, this blight, Hemileia vastatrix, had stripped most of the shrubs.

  Too late did the governmental authorities of Ceylon recognize the danger. At first they had regarded the blight as a local phenomenon. But when it spread all over the island they cabled to London for help. Botanical institutes throughout the world conducted experiments. But by the time a remedy was suggested, the malady was too widespread, destruction was too far advanced.

  Experts from England fought the plague with sulphur and lime, with sulphate of iron and sulphate of copper, with tobacco sprays. Here and there they were successful. But since millions of coffee-trees had been infected, they could not cope with the evil. By the middle of the eighteen-eighties, Hemileia vastatrix had conquered. In the devastated coffee-plantations a new crop was grown—tea. India’s sun and Buddha’s heaven watched over the tea-plant. Its leaves were healthy. Patience and strength dwelt in their tissues. The tea-plant was a challenge to men to be as vigorous and simple as it itself was.

  The last coffee-crop harvested in Ceylon was in the year 1900, and amounted to no more than seven thousand sacks. For years the island had been one of Brazil’s rivals, but now was out of the running.

  It had once more become a tea-growing country. In 1926, Ceylon led the world as a tea-producing land, exporting this product to the value of 213,000,000 rupees.

  23

  The Economic Struggle of Brazil

  WHILE on the island of Ceylon a biochemical destroyer was calling a halt to the growth of coffee, the coffee-plantations continued to expand luxuriantly in Brazil. There no cry of alarm hindered advance. Year after year, in one province after another, the coffee-berries ripened. No matter that the harvest could not be reaped. The trees went on reproducing themselves. Perpetually they scattered new seed upon the land.

  Besides, the planters were compelled to garner their crops, for they had workmen to pay and to keep busy. So, anxious at heart, the plantation-owners gave orders that the ripe berries should be picked, though they knew that they were being ruined thereby. What else could they do?

  Six varieties were mainly planted, varieties as different as apples or roses that bear different names. Experts could recognize them from a distance by the position and aspect of the twigs. The favourite shrub was the “creolo,” the “national coffee of Brazil.” Next came the “bourbon,” more valuable but more delicate, more sensitive to frost and wind; it was less long-lived than the “creolo,” but bore more fruit. The “botucatu,” or the “yellow,” was the richest in caffeine. Its berries remained yellow until they ripened.

  Java coffee, our old acquaintance of the Dutch Indies, was early transplanted to Brazil. The yield was good, but the taste was coarse. Then there was the largest of the Brazilian coffee-trees, the “maragogipe,” which was grown in the Bahia district. It had abundant berries, and produced coffee of a good flavour.

  The story of the harvesting was the same year after year. The blossoms were small, odorous, white. The calyx had five sepals; the corolla, five petals; the androecium, five stamens. After pollination, the fruit grew in the ovary. At first it was green, then yellow, then cherry-red. When signs of drying appeared in the berries, pickers came with their ladders. Cloths were spread round each tree. The harvest did not ripen everywhere at the same moment. That depended mainly upon altitude, being later in the mountains than in the valleys. At the drying-stations, the berries had to be sorted into “secco,” “maduro,” and “verde.”

  When the harvest had been garnered, the “preparation” followed, in accordance with either of two well-tried methods.

  The first method was simple and inexpensive. After the berries had been dried for a while in the sun, they were pounded in wooden mortars to break the husks, from which the beans were then separated by sifting. The “wet process” was more thorough, but costlier, since it needed machinery. Through a pipe, the berries were poured into a pulping-machine, which detached the outer envelope of the fruit from the bean. The sugar-containing, sticky pulp having been detached, the beans were washed, and stored for a while in fermenting-tanks. Then, for three or four weeks, they were exposed to the sun on the great drying-terraces. Every evening they were raked together into a mound, and covered with coco-nut matting, palm leaves, or thin tin-plate, to keep off the dew. Early next morning, they were spread out once more in the sunshine. If rain threatened, the coffee was quickly shovelled into ventilated store-houses, where the drying process could continue.

  When, after four weeks, the beans had acquired a “dureza vitrea,” a glassy hardness, the experts knew that the process was finished, provided that the outer shell could no longer be scratched by the fingernail, and that when the bean was struck by a hammer, it was not flattened, but remained resilient. The coffee was now ready for shipment. No, not quite. It still contained useless elements which added to its weight, and therefore to the cost of freightage. These were horny substances which had to be detached from the bean in another machine. With them was also removed the “silver-skin” that had continued to cling to the bean. Now at length the coffee was a finished commodity, ready for the market and for the world.

  The “ensaccadores” packed it for transport to the coast. Sack after sack left the plantations. Shading his eyes with his hand, the white-clad planter sat watching the daily exit of his goods. Could he be expected to understand that he was ministering to his own destruction? Had the world been stood upon its head? Had a curse been uttered upon the sowing and harvesting of coffee?

  In the year 1906, matters seemed to have reached this pass. The new harvest was reckoned at twenty million sacks. According to the logic of facts, the shipment of this harvest w
ould bring down the price of coffee to zero.

  What was the use of attempting to sell coffee which had become worthless? It might just as well be given away. Should the harvest be brought to market, chaos would ensue.

  Ninety per cent of the popular wealth was inherent in coffee-growing. In the whirlpool that would result, not only would the planters be ruined, but practically the entire population. It seemed likely that Brazil would be destroyed by the greatest revolution that had ever been known in the world.

  At length insight and courage were found to build an economic dam. The Convention of Taubaté marks a memorable day in the history of economics.

  The idea of “valorization” originated in the mind of an Italo-Brazilian from São Paulo, a planter and merchant named Siciliano. He had carefully calculated the chances. If a prohibition of fresh planting were enforced throughout Brazil, the state, so Siciliano believed, could, without great risk, present itself to the planters as middleman, sequestrating the entire harvest, to sell it again at some later date when market conditions should have become favourable. We see that Siciliano had read the story of Joseph and Pharaoh to good purpose.

  The respective state presidents of São Paulo, Rio de Janeiro, and Minas Geraes now assembled in the little town of Taubaté, between Rio and São Paulo, and there, in accordance with Siciliano’s advice, arranged for a maintenance of prices, propaganda, strict regulation of the coffee-trade, and at the same time stabilization of the currency. But to Alves, the federal president of Brazil, state interference to the extent implied by stabilization of the currency seemed unduly bold. After lively disputes, he refused to sign the decree. All the planters of Brazil stood solidly behind the Convention. They regarded any delay in ratification as dangerous. The federal state of São Paulo, whose harvest had reached the fearful amount of fifteen million sacks, so that it was more interested than its neighbours in measures for the protection of the market, could not wait, and set about valorization alone.

  In general, a state is supported by the financial strength of its citizens. Here, however, the state was supporting itself, at a great sacrifice, by saving its citizens from bankruptcy. The state did this by entering the market as a wholesale purchaser, and by buying their coffee from the planters at a price that could never have been maintained in a free market. Over-production had been so preposterous that, theoretically, coffee was not worth a farthing a pound. The state purchased the harvest and stored it away under lock and key. São Paulo was acting as Joseph had acted long before in Egypt when faced with a glut of grain. Joseph had withheld the superfluity from the market in order to release it by driblets in the later, lean years.

  The planters stood behind the state and supported the measures adopted. Consumers were not so well content. Traders, above all, were disgruntled, declaring the governmental action to be nothing better than a commercial speculation. The authorities, they said, were trying to keep up the price of a commodity by artificial means, or, by an economic coup de main, to prevent the price from falling to its natural level.

  Were these accusations justified? No. Who could tell whether, if the government, remaining true to liberal principles, had let matters alone, the market would have been left undisturbed to the interplay of supply and demand? Before this, speculators had effected a corner in coffee, releasing supplies into the market only when it suited their pockets. There could be little doubt that the same thing would have happened in the present case. In the year 1905, there had quietly been formed at Havre a syndicate to exert a permanent control over the coffee-market. The clamour for a free market was only a screen behind which financial groups and private capitalists wanted to play their own game with the chief product of a continent. Could these magnates of financial and commercial capital have had their way, the Brazilian planters would have been ruined, but the consumer would not have benefited in the least. What could it matter to consumers the world over whether the superfluity of coffee was kept away from the market by the São Paulo government or by a syndicate, or, in smaller quantities, by a few thousand coffee-dealers?

  The government was not strong enough to do the work alone, and appealed for help to international capital. Help was given, for international capital was interested in the welfare of Brazil. Europeans had long since come to settle in Brazil as planters; European capitalists had made advances upon mortgage to Brazilian planters, and owned various Brazilian securities. Complete ruin of the coffee-planters of Brazil would have made shoes pinch in many other parts of the world. A revolution in Brazil—not one of the minor military revolutions that occur in Spanish America every ten years or so, but revolution on the grand scale, a war of social extermination—would have thrown back the country into a condition in which drought, the primeval forest, and the rivers would have come into their own once more. The purchasing power of the Brazilian market, so important to European producers, would have been destroyed for an indefinite period. If financial capital in the rest of the world now rallied to the help of Brazil, it was in order to avert the ruin of a country so gigantic that, as Albrecht Penck once said, “it will, perhaps, some day have a population of twelve hundred millions.”

  Among all those to whom appeal for help was made, Hermann Sielcken, a Hamburg merchant with a large business, was the first to see clearly how far the disturbances were likely to extend if Brazil were allowed to go down to ruin. He combined with a few other capitalists to form a financial group which, through Henry Schröder in London as intermediary, provided the first loan to the state of São Paulo. At a cost of three million sterling, São Paulo bought two million sacks of coffee from its own planters. This “valorization coffee” was shipped to New York, Hamburg, and Havre, to be stored there under seal. The firms owning the warehouses made advances to the São Paulo government on the security of the goods, thus providing means for continuing to buy coffee.

  When still more money was required, the state of São Paulo farmed out one of its railways for a further loan of two million sterling. Valorization went on briskly. In the year 1908, eight million sacks of coffee were being kept under seal in the financiers’ warehouses as security for their loans. To defray interest and other expenses, the São Paulo government made the exporters pay a duty of three francs per sack at the time of shipment.

  But the state of São Paulo was still the owner of this coffee, wherever it might be stored, whether in Hamburg, New York, Havre, or elsewhere. Brazil had to be enabled to keep the coffee in store until there should be a favourable turn in the market. In December 1908, the Brazilian government raised a loan of five million sterling to defray all previous valorization commitments and to enable the buying process to continue. The great financiers of the world had so much confidence, by this time, that the loan was over-subscribed on the first day. The security for the loan consisted of seven million sacks of government coffee in the warehouses, the stocks being administered by a committee of financiers, merchants, and government officials, meeting on equal terms.

  The harvest of 1906, which had nearly submerged the country with its waves of coffee, was thus artificially cleared out of the way. Experience had taught that after a bumper harvest, for two years in succession the crops would be comparatively small. Like animals, plants are likely to be weakened for a time by excessive reproduction, and must restore their energies out of the air and the soil. On this occasion, however, experience was given the lie. The ensuing seasons, as the Brazilian planters noted with anxious hearts, were exceptionally favourable, with the result that the harvests of the years 1907 and 1908 were more considerable than had been hoped, so that the process of valorization had to be greatly protracted. It was not until February 1913 that the last sacks of government coffee were released from the warehouses and put on the market.

  Thus for seven years the government sequestrated by purchase the principal product of the country. The seven-year term makes the parallel with Joseph in Egypt closer than ever. But Joseph stored grain, which is food. Unfortunately coffee is not an article
of nutrition. At best, the money paid for it can be used to buy food.

  The Brazilians were not wise enough to learn from the menace that had hung so long over their heads. Instead of setting to work, by degrees, to plant some other crop than coffee, they continued on their old ways. The evil had not been cut at the root, but was only superficially and temporarily pruned. The root continued to flourish luxuriantly, with the natural result that a few years later the crisis was redoubled.

  This time it took on a new face, one which had never been regarded as possible, the face of 1914.

  For a while the world went crash—at any rate, that political world which the nineteenth century had bequeathed to the twentieth. The crash tangled other wires besides those which concerned the defence of coffee in Brazil.

  The “defesa do café” aimed at regulating access to the market, and thus keeping up the price of coffee. No Brazilian ever contemplated the possibility that the very existence of the market might be threatened; that, for instance, the German market and the Austrian market might be closed to them by a blockade. Now, however, such a market crisis had come. Whither, then, was Brazil to export her coffee? Could France and Italy make good for the loss of Germany and Austria? Worse still, not only were the Central Powers blockaded by the Allies, but the Allies themselves were blockaded by the German submarine campaign. For a time, neutrals likewise were outside the market, the trade with Denmark and Sweden, to name two of the most important consumers of Brazilian coffee, coming to an end.

  The Allies now turned to account this state of affairs that was so dangerous for Brazilian economics. In the year 1917 the French pledged themselves to buy two million sacks of Santos coffee. Simultaneously Washington purchased a million sacks for the American Expeditionary Force. Part of the bargain was that Brazil must declare war against Germany. To ship the requisite supplies, the Brazilians seized forty German steamships that were awaiting the end of the war in Brazilian ports. The loss of tonnage effected by the submarine campaign had greatly circumscribed the possibility of freightage. The temptation of playing upon Brazil’s need in this way was too much for the Allies.