ll dealers in green coffees were to be licensed,
the Exchange was fully prepared. Trading was suspended pending further
information, and owing to the farsightedness of the board of managers,
all danger of a panic in the market was averted.

By 1917, the allies had stopped shipments of coffee to Germany through
neighbors who had been her sole source of supply. Stocks in all the
producing countries were accumulating, and Sao Paulo had embarked on
another valorization scheme to protect her planters. The markets of
Europe were entirely controlled by the governments; and the United
States was practically the only free and open market. The market here
was steady and without particular animation, and showed none until the
end of November, 1917. At that time, speculation activities, steamer
scarcity, and the steady advance in freights, became decided influences
in the market; and prices began to advance.

Freights on shipments from Brazil had advanced from one dollar and
twenty cents per bag early in the year to unheard-of prices; and, before
the bubble burst, had reached as high as four dollars per bag. With this
steadily advancing freight, speculation in coffee became more active;
and prices naturally began to rise. The relative cheapness of coffee
compared with all other commodities; the fact that coffee here had shown
very little advance; the prospect of an early peace; the large European
demand to follow; were favorite bull arguments. The market became
excited; speculative buying was general, every one, apparently, wanted
to buy coffee; and twenty cents per pound for Santos 4s in the near
future was a common prediction.

The United States food administrator had shown his antipathy to
uncontrolled exchange operations by his action on sugar, wheat, corn,
and other commodities, dealt in on the exchanges; consequently, the
proclamation of President Wilson regarding coffee was not a surprise to
those who had been watching the situation closely, especially as on
January 30, 1918 (the day before the proclamation) the president of the
Coffee Exchange was summoned by telegraph to appear in Washington to
discuss ways for a proper control of the article, and the best means to
bring about such control. As a result of this summons, a committee of
the entire trade, representing the Exchange, the green-coffee dealers
and importers, the roasters, and the brokers, was appointed by the
Exchange to confer with the food administrator at onc