The chief feature of the twentieth century's developments has been the passing by the United States of the half-way mark in world consumption; this country, since the second year of the World War, having taken more than all the rest of the world put together. The world's chief coffee "stream," so to speak, is now from Santos and Rio de Janeiro to New York, other lesser streams being from these ports to Havre, Antwerp, Amsterdam, and (in normal times) Hamburg; and from Java to Amsterdam and Rotterdam. It is said that a movement, fostered by Belgium and Brazil, is under way to have Antwerp succeed Hamburg as a coffee port.

The rise of Brazil to the place of all-important source of the world's coffee was entirely a nineteenth century development. When the coffee tree found its true home in southern Brazil in 1770, it began at once to spread widely over the area of excellent soil; but there was little exportation for thirty or forty years. By the middle of the nineteenth century Brazil was contributing twice as much to the world's commerce as her nearest competitor, the Dutch East Indies, exports in 1852–53 being 2,353,563 bags from Brazil and 1,190,543 bags from the Dutch East Indies. The world's total that year was 4,567,000 bags, so that Brazilian coffee represented about one-half of the total. This proportion was roughly maintained during the latter half of the nineteenth century, but has gradually increased since then to its present three-fourths.

The most important single event in the history of Brazilian production was the carrying out of the valorization scheme, by which the State of São Paulo, in 1906 and 1907, purchased 8,474,623 bags of coffee, and stored it in Santos, in New York, and in certain European ports, in order to stabilize the price in the face of very heavy production. At the same time, a law was passed limiting the exports to 10,000,000 bags per year. This law has since been repealed. The story of valorization is told more fully in chapter XXXI. The coffee thus purchased by the state was placed in the hands of an international committee, which fed it into the world's markets at the rate of several hundred thousand bags a year. Good prices were realized for all coffee sold; and the plan was successful, not only financially, but in the achievement of its main object, the prevention of the ruin of planters through overproduction.

Another valorization campaign was launched by Brazil in 1918, and a third in 1921. Early in 1918, the São Paulo government bought about 3,000,000 bags. Subsequent events caused a sharp advance in prices, and at one time it was said that the holdings showed a profit of $60,000,000. The Brazil federal government appointed an official director of valorization, Count Alexandre Siciliano. A federal loan of £9,000,000, with 4,535,000 bags of valorized coffee as collateral, was placed in London and New York in May, 1922.

European consumption during the last century has been marked by the growth of imports into France and Germany; these being the two leading coffee drinkers of the world, aside from the United States. Germany held the lead in European consumption during the whole of the nineteenth century, and also in this century until all imports were stopped by the Allied navies; although, in actual imports, Holland for many years showed higher figures. Both Holland and England have acted as distributers, re-exporting each year most of the coffee which entered their ports. In the last half-century, the chief consumers, in the order named, have been Germany, France, Holland, Austria-Hungary, and Belgium. However, with the removal of the duty on coffee in the last-named country in 1904, imports trebled; and Belgium took third place. The table at the top of this page shows the general trend of the trade for the last seventy years.

Most of the coffee for these countries has for many years been supplied by Brazil, even Holland bringing in several times as much from Brazil as from the Dutch East Indies. Special features of the European trade have been the organization, in 1873, and successful operation, in Germany, of the world's first international syndicate to control the coffee trade; and the opening of coffee exchanges in Havre in 1882, in Amsterdam and Hamburg, in 1887: in Antwerp, London, and Rotterdam, in 1890; and in Trieste in 1905.

The advance of coffee consumption in the United States, the chief coffee-consuming country in the world, has taken place through about the same period as the advance of production in Brazil, the chief producing country; but it has been far less rapid. From 1790 to 1800, coffee imports for consumption ranged from 3,500,000 to 32,000,000 pounds. The figures in the next column show the net importations of coffee into this country since the beginning of the nineteenth century.

The chief source of supply, of course, has been Brazil; and the commercial and economic ties created by this immense coffee traffic has knit the two countries closely together. Brazil is probably more friendly to the United States than any other South American country, as shown by her action in following this country into the World War against Germany. She also grants the United States certain tariff preferentials as a recognition of the continued policy of this country of admitting coffee free of duty. The chief port of entry of coffee into the United States is New York, which for decades has recorded entries amounting from sixty to ninety percent of the country's total. Since 1902, New Orleans has shown a big advance, and in 1910 imported some thirty-five percent of the total. The only other port of importance is San Francisco, where imports have been increasing in recent years because of the growth of the trade in Central American coffee.

Throughout the century and a third of steady increase of importations of coffee, Congress has for the most part permitted its free entry; as a rule, resorting to taxation of "the poor man's breakfast cup" only when in need of revenue for war purposes. At times, the free entry has been qualified; but for the most part, coffee has been free from the burden of customs tariff.

The country's coffee trade before the Civil War was without special incident; but since that time, the continued growth has brought about manipulations that have often resulted in highly dramatic crises; organizations to exercise some sort of regulation in the trade; the development of a trade in substitutes; the advance of the sale of branded package coffee; the institution of large advertising campaigns; and other interesting features. These are treated more in detail in chapters that follow.

Coffee Drinking in the United States

Is the United States using more coffee than formerly, allowing for the increase in population? Of course there are sporadic increases, in particular years and groups of years, and they may indicate to the casual observer that our coffee drinking is mounting rapidly. And then there is the steadily growing import figure, double what it was within the memory of a man still young.

But the apparent growth in any given year is a matter of comparison with a nearby year, and there are declines as well as jumps; and, as for the gradual growth, it must always be remembered that, according to the Census Bureau, some 1,400,000 more people are born into this country every year, or enter its ports, than are removed by death or emigration. At the present rate this increase would account for about 17,000,000 pounds more coffee each year than was consumed in the year before.

The question is: Do Mr. Citizen, or Mrs. Citizen, or the little Citizens growing up into the coffee-drinking age, pass his or her or their respective cups along for a second pouring where they used to be satisfied with one, or do they take a cup in the evening as well as in the morning, or do they perhaps have it served to them at an afternoon reception where they used to get something else? In other words, is the coffee habit becoming more intensive as well as more extensive?

There are plenty of very good reasons why it should have become so in the last twenty-five or thirty years; for the improvements in distributing, packing, and preparing coffee have been many and notable. It is a far cry these days from the times when the housewife snatched a couple of minutes amid a hundred other kitchen duties to set a pan over the fire to roast a handful of green coffee beans, and then took two or three more minutes to pound or grind the crudely roasted product into coarse granules for boiling.

For a good many years, the keenest wits of the coffee merchants, not only of the United States but of Europe as well, have been at work to refine the beverage as it comes to the consumer's cup; and their success has been striking. Now the consumer can have his favorite brand not only roasted but packed air-tight to preserve its flavor; and made up, moreover, of growths brought from the four corners of the earth and blended to suit the most exacting taste. He can buy it already ground, or he can have it in the form of a soluble powder; he can even get it with the caffein element ninety-nine percent removed. It is preserved for his use in paper or tin or fiber boxes, with wrappings whose attractive designs seem to add something in themselves to the quality. Instead of the old coffee pot, black with long service, he has modern shining percolators and filtration devices; with a new one coming out every little while, to challenge even these. Last but not least, he is being educated to make it properly—tuition free.

It would be surprising, with these and dozens of other refinements, if a far better average cup of coffee were not produced than was served forty years ago, and if the coffee drinker did not show his appreciation by coming back for more.

As a matter of fact, the figures show that he does come back for more. We do not refer to the figures of the last two years, which indeed are higher than those for many preceding years, but to the only averages that are of much significance in this connection; namely, those for periods of years going back half a century or more. Five-year averages back to the Civil War show increasing per capita consumption for continental United States (see table).

It will be seen that the gain has been a decided one, fairly steady, but not exactly uniform. In the fifty years, John Doe has not quite come to the point where he hands up his cup for a second helping and keeps a meaningful silence. Instead, he stipulates, "Don't fill it quite full; fill it about five-sixths as full as it was before." That is a substantial gain, and one that the next fifty years can hardly be expected to duplicate, in spite of the efforts of our coffee advertisers, our inventors, and our vigorous importers and roasters.

The most striking feature of this fifty-year growth was the big step upward in 1897, when the per capita rose two pounds over the year before and established an average that has been pretty well maintained since. Something of the sort may have taken place again in 1920, when there was a three-pound jump over the year before. It will be interesting to see whether this is merely a jump or a permanent rise; whether our coffee trade has climbed to a hilltop or a plateau.

In this connection it should be noted that the government's per capita coffee figures apply only to continental United States, and that in computing them all the various items of trade of the non-contiguous possessions (not counting the Philippines, whose statistics are kept entirely separate from those of the United States proper) are carefully taken into account.

But for the benefit of students of coffee figures it should be added that this method does not result in a final figure except for one year in ten. The reason is that between censuses the population of the country is determined only by estimates; and these estimates (by the U.S. Bureau of the Census) are based on the average increase in the preceding census decade. The increase between 1910 and 1920, for instance, is divided by 120, the number of months in the period, and this average monthly increase is assumed to be the same as that of the current year and of other years following 1920. Until new figures are obtained in 1930, the monthly increase will continue to be estimated at the same rate as the increase from 1910 to 1920, or about 118,000. This figure will be used in computing the per capita coffee consumption. But when the 1930 figures are in, it may be found that the estimates were too low or too high, and the per capita figures for all intervening years will accordingly be subject to revision. This will not amount to much, probably five-hundredths of a pound at most; but it is evident that between 1920 and 1930 all per capita consumption figures issued by the government are to be considered as provisional to that extent at least.

In the 1920 Statistical Abstract the government has revised its per capita coffee and tea figures to conform to actual instead of estimated population figures between 1910 and 1920, with the result that these figures are slightly different from those published in previous editions of the Abstract. Figures from 1890 to 1910 have also been slightly changed, as they were originally computed by using population figures as of June 1, whereas it is desirable to have computations based on July 1 estimates to make them conform to present per capita figures.

Reviewing the 1921 Trade in the United States

According to the latest available foreign trade summaries issued by the government, the United States bought more coffee in 1921 than in any previous calendar year of our history, although the total imports did not quite reach the highest fiscal-year mark. Our purchases passed the 1920 mark by more than 40,000,000 pounds and were higher than those of two years ago by 3,500,000 pounds.

But this record was made only in actual amounts shipped, as the value of imported coffee was far below that of immediately preceding years. Coffee values, however, fell off less than the average values for all imports, the decrease for coffee being forty-three percent and for the country's total imports fifty-two percent.

Exports of coffee were somewhat less in quantity than in 1920, and about the same as in 1919; although the value, like that of imports, was considerably less than in either previous year.

Re-exports of foreign coffee were considerably below the 1920 mark, in both quantity and value, and indeed were less than in several years. The amount of tea re-exported to foreign countries was only about half that shipped out in 1920, showing a continuation of the tendency of the United States to discontinue its services as a middleman, which raised the through traffic in tea several million pounds during the dislocation of shipping.

Actual figures of amounts and values of gross coffee imports for the three calendar years, 1919–1921, have been as follows:

This represents a gain of three and three-tenths percent over 1920 in quantity and of only about one-fifth of one percent over 1919. The decrease in value in 1921 was forty-three percent from the figures for 1920 and forty-five percent from those of 1919.

Domestic exports of coffee, mostly from Hawaii and Porto Rico, amounted to 34,572,967 pounds valued at $5,895,606, as compared with 36,757,443 pounds valued at $9,803,574 in the calendar year 1920, or a decrease of six percent in quantity and forty percent in value. In 1919 domestic exports were 34,351,554 pounds, having a value of $8,816,581, practically the same in quantity, but showing a falling off of thirty-three percent in value.

Re-exports of foreign coffee amounted to 36,804,684 pounds in 1921, having a value of $3,911,847, a decline of twenty-five percent from the 49,144,691 pounds of 1920 and of fifty-four percent from the 81,129,691 pounds of 1919; whereas in point of value there was a decrease of fifty-six percent from 1920, which was $9,037,882, and of eighty-eight percent from that of 1919, which was $16,815,468.

The average value per pound of the imported coffee, according to these figures, works out at little more than half that of either 1920 or 1919, illustrating the precipitate drop of prices when the depression came on. The pound value in 1921 was 10.6c.; for 1920, 19.4c.; and for 1919, 19.5c. These values are derived from the valuations placed on shipments at the point of export, the "foreign valuation" for which the much discussed "American valuation" is proposed as a substitute. They accordingly do not take into account costs of freight, insurance, etc.

It is interesting to note that the average valuation of 10.6c. a pound for coffee shipped during the calendar year is a substantial drop from the 13.12c. a pound that was the average for the fiscal year 1921, showing that the decline in values continued during the last half of the calendar year.

Coffee imports in 1921 continued to run in about the same well-worn channels as in previous years, according to the figures showing the trade with the producing countries. The United States, as heretofore, drew almost its whole supply from its neighbors on this side of the globe; the countries to the south furnishing ninety-seven percent of the total entering our ports. The three chief countries of South America contributed eighty-five percent; and the share of Brazil alone was sixty-two and five-tenths percent.

Brazil's progress to her normal pre-war position in our coffee trade is rather slow, although she continues to show a gain in percentage each year. Formerly we obtained seventy percent to seventy-five percent of our coffee from that country; but war conditions, diverting nearly all of Central America's production to our ports, reduced the proportion to almost half. In 1919 this had risen to fifty-nine percent, in 1920 it was somewhat over sixty percent, and in 1921 it attained a mark of sixty-two and five-tenths percent. The actual amount shipped, which was 839,212,388 pounds having a value of $77,186,271, was about seven percent higher than in 1920, which was 785,810,689 pounds valued at $148,793,593; and about the same percent higher than that of 1919—787,312,293 pounds valued at $160,038,196. Although the actual poundage showed an increase, it will be noted that the value fell off almost one-half as compared with 1920, and more than one-half as compared with the year before.

The real feature of the year, and perhaps the most interesting development in the coffee trade of this country in recent years, is the steady advance of Colombian coffee.

In the year before the war, we obtained from our nearest South American neighbor 87,176,477 pounds of coffee valued at $11,381,675, which was about ten percent of our total imports. In 1919, the first year after the war, this amount was almost doubled, being 150,483,853 pounds with a value of $30,425,162. In 1920, there was a further increase to 194,682,616 pounds valued at $41,557,669, and in 1921 the high mark of 249,123,356 pounds valued at $37,322,305 was reached. This was a gain of twenty-eight percent over 1920 shipments; and, although the value was less than in the year before, the decrease was only ten percent in a year when the average fall in value was forty-three percent.

It will be news to many people interested in the coffee trade that the value of Colombian coffee now imported into the United States is almost half the value of the Brazilian coffee—$37,000,000 as compared with $77,000,000. The number of pounds imported is a little less than one-third the Brazilian contribution; but at the present rate of increase, it will pass the half mark in a few years.

Colombia and Venezuela together now supply considerably more than half as much coffee as Brazil in value, and more than one-third as much in quantity. The average value of Colombian coffee in 1921 was about fifteen cents a pound, as compared with eleven cents for Venezuelan, nine cents for Brazilian, ten cents for Central American, and ten and six-tenths cents for total coffee imports.

Shipments from Venezuela showed a drop in quantity of nine percent as compared with 1920 imports, being 59,783,303 pounds valued at $6,798,709; in 1920 they were 65,970,954 pounds valued at $13,802,995; and in 1919, they were 109,777,831 pounds valued at $23,163,071.

The figures relating to imports from Central America are of interest as showing to what extent we are continuing to hold the trade of the war years, when nearly all coffee shipped from that region came to the United States. Although there has probably been a considerable swing back to the trade with Europe, the 1921 figures show that a large percent of the trade that this country gained during the war is being retained. Imports in 1921 were considerably lower than in 1920 or in 1919, but were still more than three times as heavy as in 1913, the last year of normal trade.

The displacement of Central America's trade by the war, and the extent to which it has so far returned to old channels, are illustrated in the table of Imports into the United States from Central America in the last nine years on page 301.

As Germany was very prominent in pre-war trade, it is likely that more and more coffee will be diverted from the United States as German imports gradually increase to their old level.

Imports from Mexico in 1921 were greater by thirty-eight percent than in 1920, but were less than in 1919, and were still much below the normal trade before the war. The total was 26,895,034 pounds having a value of $3,475,122, as compared with 19,519,865 pounds valued at $3,873,217 in the year before, and with 29,567,469 pounds valued at $5,434,884 in 1919. The imports in 1913 were more than 40,000,000 pounds, in 1914 more than 43,000,000 pounds, and in 1915 more than 52,000,000 pounds.

West Indian coffees showed a gradual settling back to pre-war figures, which ranged from 3,000,000 to 12,000,000 pounds annually, but which in 1918, the last year of the war, leaped to 52,000,000 pounds. In 1919 they amounted to 42,013,841 pounds valued at $7,575,051; and in 1920, fell to 29,204,674 pounds valued at $5,711,993. In 1921 they continued to drop, the total being 15,398,073 pounds valued at $1,518,784, a decrease of forty-seven and three-tenths percent in quantity.

The year under review showed practically a return to normal for importations from Aden, which up to 1917 ran about 3,000,000 pounds a year. In that year the full effects of the war were felt in the Aden district, and shipments of coffee to this country dropped to 187,817 pounds. They rose to 432,000 pounds in 1918; and in 1919, to 681,290 pounds valued at $141,391. In 1920 there was a further rise to 889,633 pounds valued at $200,505; and in 1921 they amounted to 2,799,824 pounds valued at $476,672. But this trade is of little importance compared with that of the producing countries of this hemisphere, being less than one percent of our total imports.

Imports from the Dutch East Indies continued to decline, being fifty-five percent less than in 1920. The total of 12,438,016 pounds, however, valued at $1,771,602, is still two or three times the normal pre-war importations.

Exports of coffee in 1921—33,389,805 pounds of green coffee valued at $5,590,318 and 1,183,162 pounds of roasted valued at $305,288—were about the same as those of the year before in quantity, although much lower in value. The 1920 shipments were 34,785,574 pounds valued at $9,223,966 of green coffee and 1,971,869 pounds of roasted valued at $579,608.

In the re-export trade, shipments of coffee were lower than in several years, total amounts for 1921, 1920, and 1919 being 36,804,684 pounds, 49,144,091 pounds, and 81,129,641 pounds, and total values $3,911,847, $9,037,882, and $16,815,468.

Re-exports to France fell off from 16,760,977 pounds in 1920 to 11,429,952 in 1921. Mexico took 3,236,245 pounds as compared with 9,892,639 in the previous year, and Cuba also reduced her purchases from 6,319,105 pounds to 2,831,109. Shipments to Denmark, 4,099,403 pounds, were practically the same as in 1920, 3,951,166 pounds, as were also those to Germany, 3,200,158 pounds as compared with 2,917,773 in 1920.

In the trade of the two coffee-exporting possessions of the United States, Hawaii and Porto Rico, the 1921 figures show a considerable increase in shipments from Hawaii to continental United States and to foreign countries, while exports from Porto Rico fell off slightly.

Hawaii in 1921 sent 803,905 pounds valued at $123,347 to foreign countries, which compared with 687,597 pounds valued at $200,180 in the year before, and 4,183,046 valued at $650,036 to continental United States, as against 1,885,703 pounds valued at $476,033 in the previous year.

Porto Rico's crop, as usual, furnished the bulk of the domestic exports of the United States to foreign countries—29,546,348 pounds valued at $5,027,741, as against 1920 exports of 31,321,415 pounds valued at $8,455,908. Shipments from Porto Rico to continental United States amounted to 211,531 pounds valued at $35,780, as against 418,127 pounds valued at $118,663 in 1920.

Following are the figures of re-exports of coffee by countries in the calendar year 1921:

Per capita consumption of coffee in continental United States showed a slight increase during the calendar year 1921 over that of 1920, the figure being 12.09 pounds as against 11.70 for the previous year. This calendar-year figure compares with the fiscal-year figure of 12.21 pounds, indicating that imports during the last half of 1920 were somewhat heavier than during the last half of 1921.

The various items for the two calendar years 1920 and 1921 are shown as follows:

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Chapter XXIII

HOW GREEN COFFEES ARE BOUGHT AND SOLD

In moving green coffee from the plantations to the consuming countries, the shipments pass through much the same trade channels as other foreign-grown food products. In general, the coffee goes from planter to trader in the shipping ports; thence to the exporter, who sells it to an importer in the consuming country; he in turn passing it on, to a roaster, to be prepared for consumption. The system varies in some respects in the different countries, according to the development of economic and transportation methods; but, broadly considered, this is the general method.

Buying Coffee in the Producing Countries

The marketing of coffee begins when the berries are swept up from the drying patios, put in gunny sacks, and sent to the ports of export to be sampled and shipped. In Brazil, four-wheeled wagons drawn by six mules, or two-wheeled carts carry it to the nearest railroad or river.

Brazil, as the world's largest producer of coffee, has the most highly developed buying system. Coffee cultivation has been the chief agricultural pursuit in that country for many years; and large amounts of government and private capital have been invested in growing, transportation, storage, and ship-loading facilities, particularly in the state of São Paulo.

The usual method in Brazil is for the fazendeiro (coffee-grower) or the commisario (commission merchant) to load his shipments of coffee at an interior railroad station. If his consignee is in Santos, he generally deposits the bill of lading with a bank and draws a draft, usually payable after thirty days, against the consignee. When the consignee accepts the draft, he receives the bill of lading, and is then permitted to put the coffee in a warehouse.

Storing at Santos

At Santos most of the storing is done in the steel warehouses of the City Dock Company, a private corporation whose warehouses extend for three miles along the waterfront at one end of the town. Railroad switches lead to these warehouses, so that the coffee is brought to storage in the same cars in which it was originally loaded up-country. The warehouses are leased by commisarios. There are also many old warehouses, built of wood, still operated in Santos, and to these the coffee is transferred from the railroad station either by mule carts or by automobile trucks.

At the receiving warehouses, samples of each bag are taken; the tester, or sampler, standing at the door with a sharp tool, resembling a cheese-tester, which he thrusts into the center of the bag as the men pass him with the bags of coffee on their heads, removing a double handful of the contents. The samples are divided into two parts; one for the seller, and one that the commisario retains until he has sold the consignment of coffee covered by that particular lot of samples.