90 REPORT ON COOPERATION IN AMERICAN EXPORT TRADE.

also exports at such times, but uses its control of the supply to improve
prices. It is only active when prices fall below a certain agreed
minimum. Thus it may export cacao during several weeks or
months, or it may ship none for a whole season.
The organization is popular, since it undoubtedly works for the betterment
 of conditions in the important cacao industry, and since it
does not discriminate against the independent exporters of cacao
but endeavors to accomplish increases in price from which they have
every opportunity to profit. (See Pt. II, pp. 183 and 504.)

THE VALORIZATION OF COFFEE.

A combination of suitable soil and climate has made the region
tributary to So Paulo, Santos, and Rio de Janeiro the center of the
world's coffee-growing industry. TFour-fifths of the world’s supply
comes from the States of Sao Paulo, Rio de Janeiro, Espirito Santo,
and Minas Geraes, more than one-half of the world's supply being
produced in the State of So Paulo alone.
Some years ago, following a period of poor crop yield, high prices
of coffee stimulated the clearing of much new coffee land and a large
increase in the number of coffee trees planted. The world demand
did not keep increasing in corresponding degree, and a bumper crop,
added to the increased area planted, caused coffee prices to fall to
a low level. Much of the crop remained unsold when the prospects
of another bumper crop threatened to depress prices still further.
Many of the planters faced ruin, since coffee growing necessitates
a comparatively large outlay of capital, and the prices of coffee
bad already fallen so low that they had lost heavily on the crop of
the previous year. The prosperity of Brazil is largely dependent on
the coffee industry. Out of total exports amounting to about
$310,000,000 in 1913 exports of coffee were nearly $200,000,000.
The Brazilian Government, to relieve the situation by holding the
surplus production off the market until the reduction of supply and
the growth of demand brought about @igher prices, established the
=offee valorization scheme. Briefly described, the Brazilian Government
 arranged for the financing of a commission which bought the
coffee from the planters and held it back from the market. As the
available supplies of coffee in the world's coffee markets diminished,
the demand for consumption began to send prices up. The commission
 sold some coffee on the rising market, but not enough to cause
prices to drop back. In the meanwhile effective measures were being
taken to restrict the production of coffee. Up to the time of the
outbreak of the war the valorization scheme, combined with the control
 of production, had been successful in artificially maintaining
prices at a profitable level for the planters. Buyers in the United
States, which consumes about half the coffee exported from Brazil,