208 
was 4,218,000 bags. In 1906-7 the bumper crop was produced, 
the enormous amount of 23,786,000 bags. Production over con- 
sumption this year was 6,241,000 bags, and prices sagged 
to 5%. And all that kept the prices from going down to a figure 
that would have ruined the coffee growers even in Brazil was 
the so-called ''Valorization Scheme" just put into effect. If 
these low prices continued, it meant ruin to coffee growers 
throughout the world. As a prominent Brazilian put it at that 
time, "The increase of the world's crop of 1902 was so violent 
it could not be accompanied by consumption, and so prices fell 
disastrously, and planting interests, once so prosperous, went 
from bad to worse, until the gigantic crop of 1906-7 threatened 
to swamp them altogether, and black ruin stared them in the 
face." Such were conditions when the government of Sao 
Paulo came to the rescue of the growers, and the "Valorization 
Scheme" was hatched, the most gigantic, far-reaching trust ever 
formed. 
The three principal States of Brazil (the government of Brazil 
was not yet in the deal) now entered into an agreement whereby 
they assumed a pro rata responsibility for the purchase of such 
surplus coffee, to borrow money to carry that surplus, the same 
to be held until it could be marketed without crowding the price 
below the approved minimum. Eight million bags were pur- 
chased, and a loan of $80,000,000 made, to be paid in stated 
installments. The Arbuckles, and Grossman & Sielcklen, of New 
York, together with some French bankers, made the advances. 
The Rothschilds and other leading bankers of Europe refused, 
considering the whole valorization program economically un- 
sound. In December, 1906, in an interview by a reporter of the 
Wall Street Journal, Hermann Sielcklen, of Grossman & Bro. of 
New York City, the American representative of the syndicate 
who supplied a portion of the gold necessary to carry the load, 
said : 'Tt is no scheme at all. It is simply a plain business 
proposition which houses representing $250,000,000 capital can 
without any doubt carry through to the measure of success which 
is necessary to accomplish the object for which the plan was 
undertaken." 
To those who financed the scheme it was only a ''plain busi- 
ness proposition." It was only a matter of money and time to 
make it a success. In a leading coffee journal another writer 
at that time said : "Did you ever hear of such a crazy scheme ? 
What would you say if Uncle Sam were to buy up the surplus 
wheat of the United States in order to boost the price? Well, 
the scheme will never work, because the stuff will always be 
hanging over the market and depress it, and everybody will 
know it is there." 
After the large crop of 1902. and for a few years following, 
the consumption exceeded the production, and prices advanced 
