74 ECONOMIC ESSAYS IN HONOR OF JOHN BATES CLARK | 
i — el 
aken care of only by the adventitious circumstance of the frosts 
f 1918. 
econd, while the object of valorization was declared to be the 
tabilization of the market, the result has been quite the appasiin 
he arbitrary and uncertain action of the Government has made 
peculation more hectic and prices more irregular. Buying of 
offee has become a “hand to mouth” affair. The arbitrary 
ction of the Coffee Institute and its high handed methods have 
roused antagonism among buyers the world around. It has not 
esitated to break its contracts (see Wileman’s Brazilian Review, 
anuary 26, 1927), and it has so often deliberately fin 
he coffee crop that no one in the trade takes its estimates seri- 
usly. The Institute has boosted prices on supposed crop short- 
ge. It estimated Sao Paulo’s 1926 crop at from seven to seven 
nd one-half million bags, whereas the final crop was 10,129,000 
ags. (Ibud., Jan. 6, p. 29.) It must be admitted that owing to 
abor conditions and the difficulty of overcoming inertia in the 
ropics, the situation created by valorization has been only par- 
ially remedied by increased production in other countries, 
Ithough the coffee trade believes that such increased production 
ust eventually come about. However, there has been no corral 
ver the increase in domestic production and since the beginning 
f valorization Sao Paulo—the chief coffee producing state—has 
oubled its potential production, having increased the number of 
its trees from five hundred million to one billion (Ibid., March 
5, 1926) ; and the actual Brazilian supply has increased from 
ear to year. Brazil's ability, in the face of increasing supplies, 
o maintain high prices has been due to no inconsiderable degree 
o the enormous increase of consumption which has taken place 
uring the valorization period.* 
n expert, anticipating the time when supply will be in excess of 
emand, says, “An excess of supply over demand will be the 
ear’ factor which the United States, the greatest consumer of 
offee, has been patiently waiting for to retaliate against Brazil's 
efense policy, namely, the forcing up of prices or maintaining 
hem at fictitiously high levels by virtue of restrictions.” (Ibid. 
ec. 6, 1926, p. 1613. 
1 The world’s consumption of coffee has increased from between seven- 
teen and eighteen million bags to between twenty-one and twenty-two 
million bags. (Wileman’s Brazilian Review.)