trade, this being interpreted as indicating that the country needed supplies.

Undoubtedly the dubious reports from the primary points relative to the harvests were the main factor in arousing speculation; for the dry weather seemed to make a short crop almost certain in 1912-1913. Then, too, the quality of the crop when it began to move proved disappointing, and active competition for the coffee upon arrival pushed up prices at the expense of the small distributor, who had permitted his supplies to run low and was compelled to replenish. The natural sequence of high prices was witnessed of a falling off of deliveries from warehouses which are usually considered a fair criterion as to consumption, the use of substitutes for coffee being also noted though the extent of this influence was questioned.

There was active agitation to the end that the government might be forced to take action against the interests supposedly behind the advance, and Washington is investigating the situation though at this writing no results have been achieved. There are still some 4,000,000 bags to be liquidated but the Bankers Committee in charge is not considered likely to hurt the planter by throwing coffee on the market without due notice. A readjustment of the situation to normal levels is hardly expected until a large crop is produced at Santossomething which it is pointed out cannot occur at the earliest before the season of 1913-1914.

The receipts of coffee show a further decrease of 1,938 tons total importations for the year being 357,236 tons as compared with 359,175 tons for the calendar year 1910. This is explained by a short crop in Brazil and the firm idea of holders at primary points, who were not disposed to press their supplies on the market because of the advancing tendency,

A feature of the year, entirely in the keeping with the sharp rise in the price of coffee, was the active curtailment of consumption, the total being only 377,227 tons as compared with 442,701 tons in 1910 or a decrease of 65,474 tons. This means a falling off of 14.79 per cent. which compares with 3.62 per cent. decrease for the previous year. Of course, the warehouse deliveries, upon which the consumption figures are based, cannot be regarded as an absolute criterion; for the country though taking less coffee in this way where it would show openly, might be using up the invisible stock to the last bean and consequently still consume nearly the normal proportion. However, judging by the large increase in the sale of chicory and the admitted increased distribution of substitutes and compounded coffee, there must have been a decided falling off in consumption which is estimated in trade circles all the way from 5 to 20 per cent.

The following table compiled from the statistics published by the New York Coffee Exchange gives an instructive comparison of the figures of production and consumption, or in other words supply and demand for the past fifteen years, consumption in this case representing warehouse deliveries has reported in Europe and the United States.

During the year under review, it is noted that New York regained some of the ground which it had previously lost to New Orleans though it had all along remained the banner port through favorable location and splendid railroad facilities. The receipts at this port aggregated 3,664,579 bags out of a total of 5,858,063 bags or were in other words over 62 per cent. of the entire imports of the country. New Orleans, as already stated, fell off in its receipts, the total being 1,902,220 bags or approximately 100,000 less than the previous year. It is only natural that the latter port should handle a large amount of coffee since it is geographically favored for distribution to St. Louis and other Mississippi Valley cities. Transportation facilities as well as the dock terminals have been improved of recent years, and with the advantage of lower freight rates than can be secured from New York the trade of the Middle Western territory is bound to continue to flow through these channels. San Francisco, which port largely supplies the Pacific coast with its coffee, imported 282,261 bags during the year or 23,819 more than in 1910, the receipts it should be noted being chiefly mild grades of coffee from Latin America and Java. Receipts at other ports were 9,003 bags, a slight decrease from the previous year.

The trading in options on the Exchange was the largest in a number of years reflecting the active speculation such as is usually engendered by a rapid advance in prices. There was more outside participation than in a long time though the usual hedging operation of importers as a protection against loss in cost and freight purchases was a factor. The marked increase in the business recorded during 1911 is shown by sales of 19,316,000 bags which total compares with 10,870,250 bags for the previous year or an increase of about 80 per cent. There was naturally extreme fluctuations in price, the highest level being reached for futures in October when the December option touched 15.15 cents. The lowest quotation made during the year was recorded in February when December delivery sold at 9.35 cents. For purposes of a com

parison, it may be noted that the high and low respectively for 1910 were 11.33 cents and 6.15 cents. Transferable notices were issued during 1911 for 709,250 bags while the margins deposited reached large sum of $25,001,700. The following table gives the total sales of options in bags for the past decade.

Supply. The chief cource of supply for the coffee requirements of the country continues to be Brazil whence we obtained during the year 1911, 4,608,804 bags which figure compares with 4,685,049 bags in 1910 a decrease of 76,245 bags for the period under review. The receipts of mild grades in contrast were larger, 1,249,259 bags as against 1,173,635 bags in 1910, the coffee being shipped from Venezuela, Colombia, Mexico, Central America and the East Indies.

A comparison of the visible supply of the coffee in the world on January 1, 1912 with the total for the same day in 1911 throws an interesting side light on the relative situation at that time.

Consumption. As already noted, the tendency has been toward a falling off in the use of coffee as a result of the advance in the green bean of some 7 cents during the past two years, and there has been a

disposition to substitute compounds made with cereals and chicory. The country, however, has not abandoned the coffee drinking habit in favor of tea or cocoa and the check is bound to be only temporary. One reason for the slackened demand has probably been the disinclination of distributors to push sales owing to the lessened margin of profit, they being unable to secure a commensurate advance from their trade. It should be noted that it takes twice the capital to do business as formerly which in turn makes for lessened interest in coffee. Under the circumstances, it is only natural that the roasters should pursue a hand-to-mouth policy, pending the readjustment in prices which they expect with the advent of the next big crop in Brazil.

Crop Prospects.-The coffee merchant as well as the trader follows with keenest interest the available estimates and news relative to prospective crops as the fluctuations in the market are largely based upon this factor. Unlike other harvests, the probabilities for coffee in Brazil are figured out almost a year ahead, a fair line on the situation being obtained from the flowering which occurs in the fall, while the actual crop moves the following July. The firm market of recent years has been largely due to moderate crops assisted of course by the government control of the situation. In order to prevent a recurrence of bumper yields which would unduly depress prices and unsettle the industry, Sao Paulo decreed that new planting should be kept down though old trees could be replaced under certain conditions. There is a difference of opinion as to how strictly the regulation is being lived up to but the absence of large harvests would seemingly point to no material increase in the number of trees. Weather conditions have been none too favorable the past two years, having badly depreciated the crop both in the matter of quantity and quality. The crop year in Brazil, it will be recalled, is from July 1st to July 1st. The 1910-1911 crop, as was generally predicted ran some 4,396,000 bags short of the previous year the total being 10,548,000 bags or about 2,000,000 less than the normal consumption of Brazil coffee. The 1911-1912 crop, the first shipment of which was made on July 1, 1911 was generally expected to be a small crop and the predictions have been quite well borne out by actual results. The harvest which begins July 1, 1912 promises to be even poorer than the last as the flowering in the fall of 1911 was exceedingly scant and the subsequent weather conditions none too favorable for the proper development of

the bean.

The following are the actual receipts at the principal shipping ports in Brazil for the past three crops:

Crop of 1911-1912.-This crop which covers a period from July 1, 1911 to July 1, 1912 while a small one is likely to be considerably larger than early predictions would have justified. From indications at the time of writing, there will be a total yield of between 9,750,000 and 10,000,000 bags Santos and 2,500,000 bags Rio or a total for both crops of about 12,500,000 bags. The aggregate receipts up to December 31, 1911 was slightly smaller than the previous year for Rio, 1,623,000 bags, but larger for Santos 8,163,000 bags, a total of 9,786,000 bags.

Crop 1912-1913.-More than ordinary interest will centre about the crop which begins to move the latter part of June 1912 since upon the size of this harvest will depend the maintenance of the prevailing high level of prices. As already pointed out, the prospects are discouraging owing to the unusually poor flowering though of course the the results may turn out better than expected, it being well to allow a margin for bias in predictions of producers. Some very pessimistic reports have been sent out from Santos as to the possibilities, estimates ranging from 6,000,000 to 7,000,000 bags for that crop and 2,250,000 bags for Rio as the minimum. The maximum ranges from 8,000,000 to 9,000,000 bags for Santos and 2,500,000 to 2,750,000 bags for Rio. Making due allowance for the possibility of the minimum estimates being exceeded, it is fair to assume that the crop will not equal the consumption of Brazil coffee.

Mild Coffees.-The yield of mild coffee should logically be stimulated by the present prices of Brazil grades but the crop does not increase materially the tendency of recent years being rather the reverse. For the year 1910-1911 the total was 3,976,000 bags and the present crop does not promise to be much larger. The drought conditions the past few years have had an unfavorable effect upon the

trees.

RANGE OF PRICES OF BRAZIL COFFEE No. 7 EXCHANGE STANDARD, IN THE NEW YORK MARKET DURING THE YEARS 1911 AND 1910.