istance they needed to ward off
the disaster that threatened them through overproduction. The United
States government action in 1912 forced the sale of the valorized stocks
held in this country, and the Congress passed the law making it
impossible again to offer for sale in America stocks of coffee held
under similar valorization agreements.

The coffee situation became so serious in 1913, that Sao Paulo again
entered the money market for another loan, borrowing $37,500,000 through
the good offices of the Brazilian federal government, following this up
two years later with another loan of $21,000,000. According to a
semi-official statement issued in Brazil early in 1919, the status of
valorization at that time was that the first loan of $75,000,000 of
1908, had been entirely liquidated, and the two later loans were greatly
reduced. At the same time, it was announced by the president of the
state of Sao Paulo that the surtax of five frances would be withdrawn as
soon as the liquidation of the loans had been completed. This surtax,
however, is still in effect. In 1919, the Sao Paulo government proposed
advancing the _pauta_, or export duty, very materially. A strong protest
was made by all the exporters; and a compromise was at last effected by
which the proposed increase in the _pauta_ was canceled, and the
existing surtax of five francs per bag continued as an offset.

The valorization project just described was the second of its kind, a
former attempt having proved a failure. At that time (1870), the
Brazilian government had been a large purchaser of Rio coffee, buying it
in lieu of exchange, as it had large remittances to make. The coffee was
sold through G. Amsinck & Co., and it is believed that heavy losses were
sustained.

Since the Sielcken valorization enterprise, the Brazilian government has
promoted two more valorizations, one in 1918, another early in 1922.

_War-Time Government Control of Coffee_

The board of managers of the New York Coffee and Sugar Exchange, Inc.,
had realized, late in 1917, that war-time government control of coffee
trading was likely in view of the government's activities in other
commodities. To guard against the danger of a sudden announcement of
such action, the president of the Exchange was empowered from month to
month, at each meeting of the board, to suspend trading at any time that
conditions warranted; so that, when President Wilson announced, on
January 31, 1918, that a