Grandest Destruction

Deep down in his heart many a pious U. S. farmer firmly believes that the great Drought of 1934 was the work of God, angry at Tugwellian efforts to thwart His bounty. Yet the same God has so far failed to register His displeasure with another program for the willful destruction of natural wealth which, for sheer grandeur in scope and execution, dwarfs anything ever attempted in the U. S. or elsewhere. In three years Brazil's Departamento Nacional do Cafe has fired, made into fuel briquets or dumped into the deep blue sea 31,500,000 bags of coffee--4,000,000,000 lb., worth at last week's prices of 11 1/2-c- per lb. some $500,000,000. This amount would have kept all the world in coffee for 15 months.

Divine punishment for such wholesale annihilation of natural resources may be only delayed but the fact was that Brazil last week was enjoying an undeniable boom. By the light of burning coffee mounds, which when once ignited may burn for weeks, buildings were going up in the City of Sao Paulo at the rate of 500 per month. Cement mills were grinding 24 hours per day. Flour and sugar mills were unable to fill orders. Brazil is still a one-crop country but the Government's rigid control of foreign exchange has acted as a protective tariff stimulating domestic industry. Low coffee prices have encouraged cotton growing to such an extent that the Liverpool Cotton Exchange is reported to be considering admitting Brazilian contracts to trading. Brazilian dollar bonds have soared 30% in the past three months.

In the late 1920s Brazil began to store up coffee and future trouble for itself in the form of two revolutions. Though other coffee lands like Colombia, Guatemala, etc. can produce some 40% of the world's demand, Brazil's crop alone was larger than total world consumption in 1929. The following year 16,500,000 bags were bought up and pledged under a $97,000,000 foreign loan with the idea of liquidating both the loan and the coffee over a period of ten years. In 1931 Brazil was again knocked to her knees with another bumper crop. Finance Minister Oswaldo Aranha, now Ambassador to the U. S. (see p. 9), slapped a tax on exports, and the proceeds were used to buy coffee for destruction. The burning and dumping had hardly begun before the 1933 crop turned out to be the biggest in history--nearly 30,000,000 bags. And all the world can use is 25,000,000 bags per year. But President Armando Vidal Leite Ribeiro of Departamento Nacional do Cafe made more briquets from coffee and tar, fired bigger mountains of beans, shoveled more bags into the sea.

Last week Dr. Vidal announced that he had destroyed 437,000 bags in the first half of September, that DNC's holdings were down to 1,700,000 bags. And Tea & Coffee quoted the handsome, black-haired young lawyer as declaring before a group of junketing U. S. coffeemen: "When within two months the flames of coffee burning in Brazil are extinct . . . you will all be in a position to state in your country that the DNC has completely achieved its program for the elimination of all excess coffee stocks."

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