od that Brazil's federal government would not
endorse the plan _in toto_, it was abandoned by Rio de Janeiro and Minas
Geraes. However, the state of Sao Paulo in the course of the next two
years borrowed some $30,000,00 on its own account for valorization
purposes, obtaining half the amount direct from foreign banking
interests, and the remainder, through the Brazilian federal government,
from London sources.

This first valorization was abandoned in favor of the Sielcken plan,
which the federal government ratified in July, 1908. By this new plan
Sao Paulo borrowed $75,000,000 from the syndicate composed of American,
English, German, French, and Belgian bankers. Out of this it repaid the
$30,000,000 loan. The 1908 loan was to expire in ten years, in 1919.
Under the plan of the new loan, it was agreed that certain amounts of
the valorized coffee should be stored as collateral in warehouses in
New York and Europe in charge of a committee of seven, who were
authorized to sell the coffee in the market in specified quantities and
at prices that would not disturb the price of other coffees. The
composition of the committee was as follows: Dr. Francisco Ferreira
Ramos, of Sao Paulo and Antwerp; who was succeeded by Dr. Paulo da Silva
Prado; the Vicomte des Touches, of Havre; the Societe Generale, of
Paris; the firm of Theodor Wille, of Hamburg; Hermann Sielcken, of New
York; Edouard Bunge, of Antwerp; and Baron Bruno Schroeder, of J. Henry
Schroeder & Co., of London.

Brazil agreed to purchase 10,000,000 bags and to hold them off the
market until conditions warranted their sale. It was also agreed that
the total exports of unvalorized stocks from Brazil would be restricted
to 10,000,000 bags for 1907-08, and to 10,500,000 bags for 1909-10. In
addition, a surtax of five francs gold per bag (96-1/4 cents) was placed
on every bag exported to pay carrying charges. The management of the
government's holdings was placed in the hands of the international
committee. This committee issued bonds which were quickly subscribed
for; and because of its efficient handling of its huge holdings, prices
held steady in spite of the record-breaking Brazilian crop of nearly
20,192,000 bags in 1906-07, and a later one in 1909-10 of about
15,000,000 bags. Indeed, there was an advance of about ten dollars a bag
between 1904 and 1911.

Valorization had the effect of stabilizing the Brazil market, and giving
the planters and allied interests the ass