Uncommon Grounds: The History of Coffee and How It Transformed Our World

by Mark Pendergrast

  “São Paulo warehouses full, refusing further consignments from interior,” a cable from Brazil advised toward the end of November 1932. “Nowhere to deposit. Basements, houses being used for storage. Situation cannot continue. . . . Cannot cope with avalanche from interior. Burning going on rapidly.”

  Dictators and Massacres in Central America

  The Great Depression and its low coffee prices also brought revolution, dictatorships, and social unrest to Central American countries. The crash of 1929 exacerbated already difficult conditions for laborers, and except in Costa Rica, the threatened coffee oligarchies hastened to install strong-arm leaders to restore “order and progress.” All of the dictators continued to rely on foreign capital and support from the United States, while crushing any protests. In the wake of the 1929 crash, the coffee elite gobbled up smaller farms through foreclosure and purchase, further widening the gap between haves and have-nots.

  In El Salvador the military ousted the elected president and installed dictator Maximiliano Hernández Martínez late in 1931. For the next twenty years he ruled El Salvador with an iron fist and increasingly bizarre policies. Known as El Brujo (the witch) owing to his belief in theosophy and the occult, Hernández Martínez shared his visions with the populace over the radio. “It is good that children go barefoot,” he told his audiences. “That way they can better receive the beneficial effluvia of the planet, the vibrations of the earth.” He claimed that he was protected by “invisible legions” in direct telepathic communication with the president of the United States. The dictator believed in reincarnation for human beings, but not insects. “It is a greater crime to kill an ant than a man, because a man who dies is reincarnated while an ant dies forever.”

  By the 1930s coffee accounted for over 90 percent of El Salvador’s exports. Indians worked ten-hour days for 12 cents. They suffered, as a Canadian observer wrote at the time, from “low wages, incredible filth, utter lack of consideration on the part of the employers, [under] conditions in fact not far removed from slavery.”

  Unable to meet mortgage payments and nominally in default, the plantation owners slashed wages, postponed routine maintenance, and fired many permanent workers. Coffee trees were left unharvested. “There came a time,” one worker later told a journalist, “when we were not given land or work. . . . I had to abandon my wife and children. I did not get enough work to be able to give them food, still less clothing, or to educate them. I do not know where they are. Misery has separated us forever. . . . For this I became a Communist.”

  On January 22, 1932, urged on by charismatic Communist leader Agustín Farabundo Martí, Indians in the western highlands (where most of the coffee was grown) killed nearly one hundred people, mostly overseers and soldiers.52 Armed only with clubs, slingshots, machetes, and a few rifles, the rebels stood no chance against encroaching government troops. Hernández Martínez authorized a brutal reprisal, while ordering the creation of Civic Guards, composed primarily of upper-class citizens.

  The bloodbath that followed came to be known as La Matanza, the Massacre. The military, aided by the outraged and terrified ruling class, killed indiscriminately. Groups of fifty men were tied together by the thumbs and shot in front of a church wall. Others had to dig mass graves before machine guns dropped them into the holes. Bodies littered the roadsides. Anyone dressed in traditional Indian clothing was killed in what approached genocide in some regions. Putrifying bodies were left for pigs, dogs, and vultures to devour. Farabundo Martí died before a firing squad.

  Within a few weeks some 30,000 people were dead.53 The Communist Party was virtually wiped out, along with any resistance for years to come. The memory of the massacre would influence Salvadoran history for the rest of the century. “We were all born half dead in 1932,” one of their poets would write.

  In a July 1932 edition of its journal, the Coffee Association of El Salvador commented on the uprising and subsequent massacre. “There have always been two essential classes in every society: the dominators and the dominated. . . . Today they are called the rich and the poor.” This division, they asserted, was inevitable, and efforts to end class divisions would “break the equilibrium and cause the disintegration of human society.” Thus the Salvadoran coffee power elite justified the prolonged misery of the campesinos. Convinced that factories only provided fertile ground for Communists, Hernández Martínez passed laws discouraging industrialization. El Salvador turned even more firmly to coffee as its primary source of revenue.54

  In Guatemala, Nicaragua, and Honduras, dictators also came to power during the depression, clamping down on any signs of peasant unrest. When Jorge Ubico Castañeda took over in Guatemala in 1931, he quickly moved to squelch any opposition through imprisonment, assassination, execution, or exile. Recognizing the need to placate oppressed Indian laborers, he abolished debt slavery but instituted a vagrancy law that amounted to nearly the same thing. Nothing changed the appalling poverty of the Guatemalan peasant or the country’s reliance on foreign capital and coffee exports. After 1933, when Ubico had a hundred trade-union, student, and political leaders shot—and issued a subsequent decree allowing coffee and banana plantation owners to kill their workers with impunity—coffee peons didn’t dare rebel.

  General Anastasio Somoza García came to power in Nicaragua in 1934, following the assassination of guerrilla leader Augusto César Sandino, which Somoza himself had arranged.55 Officially elected in 1936, Somoza built a family dynasty based largely on massive coffee holdings, including forty-six plantations. Through intimidation and graft, Somoza became the largest property holder in the country. He too ordered massacres of suspected rebels.

  In Honduras, Depression-era dictator Tiburcio Carías Andino proved less ruthless than his counterparts. He encouraged more coffee production, so that Honduras joined other Central American countries as a coffee power, though bananas remained its major export.

  In Costa Rica and Colombia, the Great Depression and its lower coffee prices also created problems, though legislative compromises through democratically elected governments helped resolve conflict. In Costa Rica, where predominant smallholders worked their own fincas, there were few labor issues, but the farmers were forced to sell their ripe cherries quickly to centralized processing centers that set very low prices during the Depression. In 1933 the state finally intervened with regulations that forced processors to pay a decent price for the coffee berries.

  Colombian farmers, who generally processed their own beans, struggled with high interest rates from financial institutions and a price squeeze from foreign exporters—A & P’s American Coffee Corporation, Hard & Rand, W. R. Grace—who dominated the Colombian coffee industry.56 Labor protests on the large haciendas escalated. Colonos and tenants refused to pay outstanding debts, contending that the land belonged to them. Squatters, known pejoratively as parásitos, claimed unused lands on haciendas. The Colombian legislature passed laws making vacant land subject to expropriation, leading to the decline of the large plantations. The wealthy coffee elite already were diversifying into industries such as cement plants, shoe factories, real estate, and transportation.

  Colombian coffee continued to sell in ever greater amounts, however. The Federación Nacional de Cafeteros (FNC), the Colombian Coffee Federation, had been established in 1927 and quickly gained enormous political clout, becoming “a private State within a not-very-public State,” as one observer put it. In the United States the federation advertised Colombian beans as “Supreme Among Mild Coffees.”

  Brazil Opens the Floodgates

  Although the United States per capita held steady around thirteen pounds of coffee a year in the thirties, the origins of those beans shifted as the Depression continued. While Brazil burned more and more of its crop, Colombia, Venezuela, and the Central American producers were able to sell in proportionately greater amounts. In desperation, Brazil called a multinational conference in Bogotá in 1936. The participating Latin American countries agreed to fund a Pan American
Coffee Bureau (PABC) that would promote coffee consumption in North America. Following the conference, Colombian and Brazilian representatives hammered out a price maintenance agreement: high-quality Colombian Manizales would sell for over 12 cents a pound, with mediocre Brazilian Santos at 10.5 cents a pound.

  In 1937 Brazil burned an astonishing 17.2 million bags at a time when total world consumption was only 26.4 million bags. Only 30 percent of Brazil’s coffee harvest reached the world market that year. Yet Colombia did not maintain the agreed-on price differential, announcing that it was “too burdensome”; Manizales sold for 11.6 cents a pound. With such a slim price premium over the inferior Santos, Colombia had no trouble selling its coffee.

  The incensed Brazilians called yet another conference, held in Havana in August 1937. In his keynote address, Brazilian representative Eurico Penteado told the other growers that “few of the resolutions voted at Bogotá have been carried out and nothing remains of the price agreement.” Unlike Brazil, other countries continued to export their inferior grades. “As to price defense, only Brazil continues to bear the whole burden.”

  At the onset of the Depression, Brazil had provided 65 percent of U.S. coffee imports. By 1937 it made up just over half, while Colombia had snared 25 percent of the market. At the same time, however, Brazil’s dependence on coffee had lessened somewhat. In 1934 coffee had provided 61 percent of Brazil’s exports, and two years later it was only 45 percent. “Therefore, gentlemen,” Penteado concluded, “it will be seen that for the good of Brazil, while our capacity to go on destroying coffee has reached the point of exhaustion, we are really no longer confronted with the need of further sacrifice.” Unless other countries agreed to stop new planting, cease export of inferior grades, and agree to some price support system, Brazil would, he threatened, drop its entire coffee support program.

  Yet no one truly believed Brazil actually would end a practice it had begun more than thirty years earlier with the first valorization. Nor were other Latin American producers eager to cease the exportation of their inferior grades, since cheaper African robustas were beginning to find their way to the United States and Europe. “A few years ago coffee brokers were loath to taste a cup of Robusta,” one U.S. coffee expert observed in 1937. “After repeated sippings, however, one finds himself becoming accustomed to them.” The growers at the Havana conference feared that robusta would replace the bottom-grade Latin American exports.

  Indeed, a primary reason for the Latin American countries’ willingness to consider a quota system was the increasing threat from the African colonies. During the Depression, the Kenyan growers of fine arabica beans established a coffee board and research bureau. They succeeded in establishing their own auction over the objections of London brokers, who previously had monopolized their trade. By the late 1930s the Kenyan plantations began to advertise extensively in American trade journals. Total African coffee production doubled in a decade, and Africa surpassed Asia to become the second largest continental coffee exporter. Little wonder then that Latin American producers pointedly left the African, Indian, and Asian producers out of their conference plans.57

  The Havana conference nonetheless ended without resolving the issue of overproduction, though the participating countries did agree on a U.S. advertising campaign to be funded with a 5 cent per bag export tax, which duly commenced the following year. Reluctantly, they also agreed to limit export of some inferior grades. They referred the intractable problem of price differentials and export quotas to the Pan American Coffee Bureau in New York, which was given sixty days to find a solution.

  When the time limit expired without a resolution, Getúlio Vargas shocked the coffee world in November by simultaneously declaring himself a benign dictator of what he called the Estado Novo, or New State, and announcing Brazil’s new policy of “free competition.” He vowed to open the coffee floodgates just before Brazilian representative Eurico Penteado was due to speak in New Orleans at the annual meeting of the Associated Coffee Industries of America (now renamed the National Coffee Association [NCA]). Penteado defended his country’s action, explaining that “Brazil was being displaced in an alarming manner from the world markets.” The U.S. media reacted favorably, reporting that “Brazil is tired of holding the coffee bag for other countries which won’t play ball.”

  At first the frustrated Brazilian growers cheered the $2 per bag tax reduction. The new free trade policy represented “a ray of light in the darkness of a long night,” according to a São Paulo planter; but when prices plummeted to 6.5 cents a pound, the fazenda owners weren’t so sure. And when their credit dried up, they were frantic. The burning program resumed, though in moderation. In 1938 Brazil exported over 300 million pounds more coffee to the United States than the previous year—but received $3.15 million less for the total than in 1937.

  Still, the Brazilians continued to flood the world with coffee, with an eye to the future. They were determined to win back their fair share of the market. In addition, if that ever-elusive international coffee cartel ever set a firm quota system, they knew that it would be based on a country’s market share over the past few years. Brazil’s efforts seemed doomed, however, considering what had happened during the previous three decades. In 1906 Brazil had grown over 20 million bags of coffee, with the rest of the world contributing only 3.6 million. By 1938 Brazil produced nearly 22 million bags, but other coffee producers now grew 10.2 million bags, most of which were superior to the Brazilian beans.

  While Latin American growers struggled for minimal profits in a world of low coffee prices, the Great Depression brought new selling opportunities to many U.S. coffee roasters, who had finally learned the virtues of selling an image—and a sound.

  11

  Showboating the Depression

  Just around the corner,

  There’s a rainbow in the sky.

  So let’s have another cup o’ coffee,

  And let’s have another piece o’ pie.

  —Irving Berlin, 1932

  Although U.S. citizens endured hardships during the Great Depression, they generally had enough to eat and drink, even if some had to stand in bread lines for their food and coffee. To divert themselves in their homes, they also had a miraculous new communication medium—the radio, which would provide another way to sell coffee.

  Glued to Their Radios

  In radio’s infancy in the early twenties, advertisers didn’t make direct brand-specific appeals to consumers, as this would have appeared crassly commercial. Instead they sought an uplifting, educational tone. In 1923, for instance, John Watson of J. Walter Thompson discussed “Glands, the Mysteries of the Human Body,” over WEAF. Although the announcer noted that the talk was given courtesy of Pebeco Tooth Paste, Watson did not mention the product. He concluded that “to keep the glands of the mouth active and healthy . . . it is advisable to brush your teeth after every meal with a tooth paste that cleanses and polishes the teeth without scratching the delicate enamel.” Watson later observed that this talk “illustrates fairly well the technique of commercial advertising by radio. . . .

  The speaker does not have to say anything about the product being advertised.”

  Slowly advertisers became more aggressive. In 1924 A & P began advertising its three coffee brands on the radio with the “A & P Gypsies,” soon to be followed by the Everready Hour, Lucky Strike Orchestra, Wrigley Review, the Jewel Tea Hour, and the Maxwell House Hour. In the West, Folger’s sponsored “Folgeria,” with a marimba band theme, comic skits, and musical acts. Still, the advertising was, as Erik Barnouw describes it in his history of broadcasting, “brief, circumspect, and extremely well-mannered.”

  In 1929, all that changed. That year Americans spent $842 million on new radios, up well over 1,000 percent from seven years earlier. Early in 1929 virtually all of Chicago’s radios were tuned into Amos ’n’ Andy, a show about two black men played by two white men, Freeman Gosden and Charles Correll. In May, William Benton, a young advertising man wit
h the firm of Lord & Thomas, walked home to his Chicago apartment on a hot, muggy night when everyone had their windows open. “I heard these colored voices leaping out into the street, from all the apartments. I turned around and walked back up the street. There were nineteen radios on and seventeen were tuned to ‘Amos ’n’ Andy.’” The next morning Benton convinced agency chief Albert Lasker that Pepsodent, the firm’s toothpaste client, should sponsor the show nationally. As a result, the radio program became a national obsession, and Pepsodent sales skyrocketed. As comedian Bob Hope recalled, “There wasn’t a theater in the country that opened in the evening before 7:30. Why? Because they knew nobody was going to leave the house until after ‘Amos ’n’ Andy.’ Nobody.”

  Benton & Bowles Survive the Crash

  On July 15, 1929, William Benton and Chester Bowles opened a new advertising firm in New York City. The two Yale graduates, twenty-nine and twenty-eight years old, respectively, were friends with Charles Mortimer, who worked in the advertising department of General Foods. Mortimer arranged for Benton and Bowles to meet with his boss, Ralph Starr Butler, who headed General Foods’ advertising. Impressed by the bright young partners, Butler gave them Certo and Hellmann’s Mayonnaise, two smaller accounts.

  The two partners resolved to concentrate their advertising energies on food and drug products, which they correctly perceived as largely impervious to the Depression. On Benton’s thirty-second birthday, April 1, 1932, Ralph Starr Butler and Clarence Francis, the General Foods sales manager, summoned Benton to explain that they were unhappy with the sales of Maxwell House Coffee, then being handled by Erwin Wasey.58 They asked him whether his agency could handle not only Maxwell House but also Baker’s Chocolate, Post Toasties, Post Bran Flakes, Diamond Crystal Salt, and Log Cabin Syrup. Bill Benton answered, honestly, that he didn’t think they were prepared to take on all of the accounts. The General Foods men then suggested that Benton and Bowles take on a third partner, Atherton Hobler, the restive account manager at Erwin Wasey.