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representatives of the several firms as collateral, and the agree- 
ment provided that 500,000 bags only should be disposed of in 
the crop year 1909-10, 600,000 during 1910-11, 700,000 during 
1911-12, 800,000 during 1912-13, and thereafter 700,000 yearly. 
To further help out the scheme, Brazil was to levy a surtax on 
all coffee shipped out of the country over 10,000,000 bags an- 
nually, of about a half cent per pound, and remit the proceeds 
of this tax weekly to the bondholders. It was also agreed that 
the government should enact a law that would prohibit the 
plantmg of additional coffee trees, and prevent as far as possible, 
an increase in the supply. The success of the whole scheme de- 
pended on such a law, and it was done, with the result that the 
surplus is steadily declining, prices advancing, and consump- 
tion rapidly overtaking production. We have thus here pre- 
sented the unique spectacle of a powerful government, for the 
first time in history, engaged in restricting by statute the pro- 
duction of a necessary commodity for the purpose of enhancing 
the price. Attempted "corners" in cotton, wheat and corn have 
failed in the past, but here we have a "corner" that has been a 
complete success. Every person who drinks a cup of coffee 
is contributing his mite toward the millions of profits now being 
reaped by the scheme. 
In justification of the scheme a writer in the Brazilian Re- 
view, in speaking of the conditions existing in 1906-7, said: 
''Little by little, resources, accumulated in a decade of prosperity, 
were exhausted, and planters went down one by one into ob- 
scurity. Laborers were left unpaid, and emigrated in swarms. 
Banks broke, and even the great Bank of the Republic was 
forced for a while to suspend payments. So when the bumper 
crop of 1906-7 came, the cup of the planters' bitterness was full 
to overflowing." 
On January 1 last the syndicate had on hand 6,310,323 bags 
coffee, of which 1,461,890 were stored in New York, the bal- 
ance in European warehouses. This coffee is a much higher 
grade than No. 7 Rio. This coffee represents at present prices 
a value of 20,000,000 pounds sterling, while the obligation of 
Brazil to the syndicate, according to official figures, is but 13,- 
000,000 pounds at the same time. While this difference does 
not represent the entire advanced cost to the consumers, it prob- 
ably does represent the net profits to Brazil on the amount pur- 
chased for account of the syndicate. 
Thus Hawaii gains by the ''corner" what she failed to get 
by the tariff. 
The price of coffee in the markets of the world has advanced 
about two and a half times since the scheme was inaugurated. 
Where will it stop? If coffee can be controlled now by capital 
(and it certainly is and pretty effectually), will this control be 
voluntarily surrendered later on when all the coffee is sold? It 
will be noted that restriction on new planting is being effectually 
