another day of enormous speculative dealings,
involving roundly 462,000 bags. This marked another turning point; the
three succeeding days of record-breaking operations on the Exchange
witnessing a break of roughly two cents. Mr. Sully went on a vacation on
February 3, and the Sielcken interests sold on a large scale. Business
for that day was placed at 555,000 bags, closing prices being about
one-half cent lower. This brought on enormous liquidation by western
bulls on the following day, approximately 500,000 bags. As a result,
prices lost twenty-five to sixty-five points on a turn-over of about
642,000 bags. All records for business were smashed on the following
day, February 5. The official record was 689,000 bags, but trade
estimates made it more than 1,000,000 bags. On that day, southern
interests liquidated heavily, causing net losses of eighty to ninety
points. Doubtless the break would have been more severe had it not been
for buying by the Sielcken people and several other strong interests at
and below seven and one-quarter cents for September contracts.

_The Story of Valorization_

The valorization, or equalization, of coffee originated in Brazil. When
the original plan was threatened with disaster, Hermann Sielcken stepped
in and saved the Brazil planters from ruin; the Brazil government from
possible revolution; and, incidentally, won for himself and those who
were his partners in the enterprise much unenviable notoriety.

The principle of valorization is generally conceded to be economically
unsound, because it encourages overproduction. And valorization in
Brazil would have been a failure, had it not been for a fortuitous
combination of short crops, Hermann Sielcken's genius, and the World
War. Because of the lessons learned in this experience, Brazil's
subsequent valorization enterprises have run more smoothly.

A rapidly increasing world demand, a wonderfully fertile soil, and cheap
labor kept the Brazil coffee industry in a flourishing condition nearly
to the close of 1889. Coffee consumption was increasing, especially in
the United States. By April 1890, the average import price per pound of
Rio No. 7 in this country was nineteen cents; and Brazil was supplying
only about half our needs. Virgin soil was still available in Brazil,
and immigration furnished all the needful labor. Easy profits led to
increased investment and careless methods. Her planters were drunk with
prosperity. For six years, n