Papers Relating to the Foreign Relations of the United States, Transmitted to Congress, with the Annual Message of the President, December 6, 1875, Volume I

No. 81.
Mr. Partridge to Mr. Fish.

United States Legation,
Rio de Janeiro, August 7, 1875. (Received Sept. 20.)

No. 274.]

Sir: In my Nos. 218 and 225, I offered some facts and statistics in regard to the export hence to, and consumption in, the United States, of Brazilian coffee, and the effect here of demand and prices there, and especially in regard to what had been, and probably would again be, the effect on prices here of a duty thereon in the United States, in support of the recommendation then (December, 1874) made by the President, of its re-establishment.

Although Congress adjourned without imposing a duty on coffee, yet, as it appears not improbable that the necessity therefor still exists, perhaps some additional facts and statistics in relation thereto, based upon subsequent prices here, amount of export to the United States, I prospect for the prices of crop just gathered, (up to 1st of July,) and which constitutes the supply up to 1st of July, 1876, may be acceptable to the Department.

I have, therefore, annexed hereto (1) a “comparative table of the clearances of coffee from the ports of Rio and Santos during the crop-years 1872–’75,” issued by Messrs. J. M. Wright & Co., on the margin of which are some annotations respecting weights, &c., and further explanations.

From the figures there given, and from those of the Bureau of Statistics (United States) of imports and exports, it will appear that from 53 to 64 per centum of the whole Rio coffee-crop goes to the United States. This will serve to explain the fact that the price here depends upon the demand in the United States for Rio coffee. That coffee (the coffee from Santos is of a higher grade and price, better prepared, and goes chiefly to the north of Europe) is, generally, of a lower quality and price than that of other countries. Its peculiar taste, which is strong, and even rank, compared with that of Venezuelan, Costa Rican, and other origin, is due, in some measure, to its being gathered before it is strictly ripe, as well as to soil and less careful preparation. It is this peculiarity, however, which makes it acceptable to consumers in the Western and Southwestern States; and it is there (for it is on this account not acceptable in Europe) that its chief market is found, especially for the lower grades. The highest grade of Rio coffee, (washed,) as well as that known as superior, or “first good” goes chiefly to Europe, and that, of those grades, sent to the United States is sold under a different name and for a higher price.

The great consumption of coffee in the United States, (greater per head than in any other country, except, possibly, Holland) and especially of Rio coffee, which constitutes from 72 to 77 per centum of the whole import into the United States, will also appear from those figures.

Also the further fact that in ordinary crop-years, when this is not “short,” any apprehended falling off in consumption in the United States—whether from lessened prosperity there, or from any other cause, including the imposition of a duty—is followed here by an immediate lessened demand, and a correspondingly lowered price. This was shown especially at the time of the first imposition (1861) of duty, (3 cents,) and when it was afterward increased to 5 cents; at both times the price fell here almost to the extent of the duty.. It might have been expected, then, that when the duty was first reduced again to 3 cents, and afterwards abolished, the price in the United States, to consumers there, would be lessened by the amount of the duty so abolished. This, however, was not the case; and in July, 1872, the taking off the duty inured to the benefit of Brazilian coffee-growers. These received even more for their crop, in consequence partly of the expected increase of consumption in the United States in consequence of the abolition of the duty, as well as from rumors of a short crop, and a speculative demand founded thereon. The price of coffee at that time went up in Rio; and while the Treasury of the United States gave up a revenue of some eight or nine millions of dollars on this one article alone, the consumer in the West had actually to pay a higher price after the abolition than during the continuance of the duty.

The consumption of coffee in the United States is steadily and almost regularly increasing, and does not appear to be at all affected by the recurrence of financial distress. Thus, in the twelve months preceding June 30, 1873, there were imported into the United States 293,000,000 pounds of coffee; and in the next ensuing twelve months, up to 30th June, 1874, including the nine months following the September (1873) “panic,” there were imported over 295,000,000 pounds; showing an increase of over 2,000,000 pounds, notwithstanding the lessened commercial activity and prosperity of the country during that year. And the difference in the price paid therefor is still more striking. During the year first named, (up to June 30, 1873,) the declared (custom-house) value of the (293,000,000 pounds of) coffee then imported, was $44,000,000; while during the following year, (including the effects of the panic,) the 295,000,000 pounds of coffee was valued at $55,0000!^* Thus during a year of distress the people of the United States consumed 2,000,000 pounds of coffee more, and paid therefor a sum greater by $11,000,000 (25 per cent. more) than they had done during the year preceding, which is, now at least, thought to have been a time of inflation and wild speculation. During that year (1873–’74) the shipments from Brazil to the United States were only about 188,000,000 pounds, (against 215,000,000 in 1872–’73; 236,500,000 in 1874–’75,) and making only about 64 per cent. of that whole import, instead of the usual proportion of from 70 to 77 per cent. This falling-off, however, in coffee from Brazil during that year (while the whole import from other countries was much greater) was due to the fact of the very high price of coffee in Rio in that year for shipment to Europe, where prices had much risen in consequence of short crops in those countries (Ceylon, Java, &c.,) from which supplies for Europe came.

Experience here shows that whenever, in Rio, the price of coffee goes above 16 or 18 cents (U. S.) gold, so that to the consumer in the United States Rio coffee cannot be retailed for less than 23 or 25 cents the pound, other coffee than Rio, of a better quality, and, then, of no higher price, is used instead by a large class of consumers, while by the still larger class a compound bearing the name of Rio, or, in some cases, more aptly called “French,” (since none grows there,) takes its place. This preparation can, of course, be sold at a much lower price than that at which even the lowest grade of Rio coffee could then be imported.

The crop now (since July 1) gathered and coming to market is acknowledged to be a short one. It is variously estimated at from one-half to two-thirds the usual crop, which is about 200,000 tons; probably it is not less than 130,000; and there still remain at least 55,000 tons of the preceding crop, detained by bad roads last year or withheld in the interior. Thus it will not, probably, be far wrong to say that from July 1, 1875, to July 1, 1876, there will be, or can be, brought to market 185,000 tons of Brazil coffee. This is a great falling off from last year, when (up to July 1, 1875) 233,000 tons were exported; but it is a larger amount than was exported during 1873–’74, when only 156,738 tons were sent abroad. The price of Brazil coffee, therefore, supposing there is no short crop in other countries, will probably be lower than in 1873–’74, nor can it be expected to be higher than at present, since prices have now reached the point at which consumption falls off and imitations begin in the United States.

I do not know if it be still the intention of the President or of the honorable Secretary of the Treasury again to recommend the re establishment of the duty on coffee; but if it be, I respectfully submit the foregoing facts and figures in support of such recommendation, and in proof—

• First, that by reason of the United States being the chief for all grades, and almost the exclusive consumer of the lower grades of Brazil coffee, the price of this last, in Rio, depends on the demand in the United States alone.
• Secondly, the effect of any duty on coffee in the United States is not to lessen consumption there, and is felt in the price here, and not in the cost to the consumer in the United States; and that, therefore,
• Thirdly, the effect of such duty now would be to give a large sum ($10,000,000, at 3 cents per pound) to the Treasury, without any burden or increase of price to the consumer at home.

I believe that the United States is the only country (unless Holland be excepted) which admits coffee and tea free of duty. I have appended a table, (2,) showing the duty on coffee in various countries (14) named, stating this from the heavy imposition (about 14 cents per pound) in France to the moderate tax (1⅓ cents) in Belgium. It will be-seen that the medium rate would be over 3 cents per pound. A duty of 3 cents per pound on coffee, and a (corresponding) duty of 15 cents per pound on tea, in the United States, would give a revenue of twenty millions of dollars, without any burden to the consumer; and would, probably, be more cheerfully paid than any other by those who use those articles.

I have, &c.,

JAMES A. PARTRIDGE.

[Inclosure 1 in No. 274.]

A comparative table of the clearances of coffee from the ports of Rio de Janeiro and Santos during the crop-years of 1874–’75, 1873–’74, and 1872–’73.

The crop-year begins with July in each year, at which time the coffee gathered after June 24, generally begins to come to market. The clearances from Rio de Janeiro and Santos, for the twelve months then next succeeding, would not, of course, correspond exactly in quantities with the quantities received in the United States between those same dates, since coffee arriving in the United States July 1, and afterward had cleared at Rio de Janeiro about May 15, the voyage averaging 45 days.

rio de janeiro.

Months.	United States, (excluding California.)			Europe.			Elsewhere.
	1874–’75.	1873–’74.	1872–’73.	1874–’75.	1873–’74.	1872–’73.	1874–’75.	1873–’74.	1872–’73.
	Bags of 60 kilos.	Bags of 5 arrobas.	Bags of 5 arrobas.	Bags of 60 kilos.	Bags of 5 arrobas.	Bags of 5 arrobas.	Bags of 60 kilos.	Bags of 5 arrobas.	Bags of 5 arrobas.
July	72,329	106,913	102,760	55,877	39,765	42,081	4,325	1,321	3,035
August	140,548	119,436	108,711	61,394	34,118	134,036	15,425	4,698	11,329
September	188,047	129,163	120,739	106,921	40,823	90,451	5,131	370	8,103
October	166,106	*44,081	136,208	177,899	10,626	113,232	15,312	982	3,892
November	149,297	113,385	158,797	131,996	57,680	94,268	3,145	6,808	7,388
December	222,329	99,367	124,395	110,469	47,991	62,992	9,271	7,343	4,333
January	188,596	90,611	102,736	79,217	70,222	85,048	7,790	1,999	4,512
February	87,786	98,977	91,761	77,523	68,819	48,867	6,221	3,774	1,796
March	158,272	67,251	85,082	96,056	87,404	86,555	9,024	6,272	8,237
April	110,464	97,149	99,082	130,759	37,977	75,016	6,479	6,533	858
May	95,741	40,231	55,661	126,255	18,687	128,341	9,190	7,058	6,982
June	204,074	72,352	94,166	98,651	36,786	103,924	4,542	11,012	1,303
Total	1,783,589	1,078,916	1,280,098	1,253,017	550,898	1,064,811	95,855	58,170	61,768
Or tons	105,434	77,065	91,436	74,070	39,350	76 058	5,666	4,155	4,412

The clearances from Rio de Janeiro were divided as follows:

	Crop-year, 1874–’75.	Crop-year, 1873–’74.	Crop-year, 1872–’73.
united states.	New bags of 60 kilos, 132 lbs.	Old bags of 5 arrobas, 160 lbs.	Bags of 5 arrobas, 160 lbs.
New York	688,926	414,465	339,915
Baltimore	423,023	245,913	324,752
Boston	10,000	15,275
Hampton Roads, (for orders)	305,174	214,652	239,545
Sandy Hook, (for orders)		3,726	17,440
Philadelphia and Delaware Breakwater, (for orders)		3,000	3,000
Charleston	9,248	8,882	8,701
Richmond	11,400
Savannah	19,425	14,218	13,611
Mobile	49,450	31,103	64,666
New Orleans	202,354	103,503	147,063
Galveston	37,081	20,615	40,192
St. Thomas, (for orders)	27,508	3,564	21,213
San Francisco, Cal	396
Total bags	1,783,985	1,078,916	1,280,098
Or, in pounds	226,128,254	172,626,560	204,815,680
europe.
Channel, (for orders)	143,826	90,786	204,240
Harve	186,076	65,066	85,026
Antwerp	45,719	21,887	53,004
North of Europe and Baltic	245,949	87,781	200,142
Liverpool, London, and Southampton	221,303	59,593	113,792
Bordeaux	77,870	19,314	53,704
Lisbon, (for orders)	100,710	100,920	140,483
Portugal	4,360	3,884	1,811
Mediterranean	227,204	101,667	212,609
Total to Europe	1,253,017	550,898	1,064,811
elsewhere.
Cape of Good Hope and Port Elizabeth	65,096	29,075	37,192
River Plate and West Coast	30,759	29,095	24,576
Total	95,855	58,170	61,768
Total clearances from Rio de Janeiro to all countries	3,132,857 new bags, (or 185,193 tons.)	1,687,984 old bags, (or 120,570 tons.)	2,406,677 old bags, (or 171,905 tons.)
of which whole exports—
There went to the United States	100,950 tons, (or 54.3 per cent.)	77,065 tons, (or 63.9 per cent.) 43.505 tons	91,435 tons, (or 53.19 per cent.)
To other countries

Note.—Very high prices in Rio de Janeiro during the latter part of 1873 for coffee for Europe. Sudden fall in January and February, 1874.

santos.

Months.	United States.			Europe.
	1874–’75.	1873–’74.	1872–’73.	1874–’75.	1873–’74.	1872–’73.
	Bags of 60 kilos.	Bags of 5 arrobas.	Bags of 5 arrobas.	Bags of 60 kilos.	Bags of 5 arrobas.	Bags of 5 arrobas.
July	9,660	4,572	14,218	80,876	13,844	8,579
August	12,715	17,421		37,497	15,525	2,726
September		6,627	4,951	22,093	11,352	8,617
October	11,530	5,048	9,332	52,703	6,733	26,194
November		10,765	4,000	36,396	32,348	8,590
December	12,169	6,165	2,268	51,015	39,637	34,729
January	4,000	22,701*	9,009	100,283	75,528	29,005
February	4,016			39,156	23,595	51,613
March	2,900	7,125	4,600	62,045	27,566	60,612
April	4,000	6,789	2,722	124,828	53,562	40,394
May		10,859	3,865	66,021	30,797	65,567
June	18,579		9,333	56,954	77,787	28,614
Total	79,569	98,072	64,298	729,867	408,274	365,240
Or tons	4,703	7,005	4,593	43,145	29,163	26,089

The clearances from Santos were divided as follows:

	Crop-year 1874–’75.	Crop-year 1873–’74.	Crop-year 1872–’73.
united sates.
	Bags of 60 kilos.	Bags of 5 arrobas.	Bags of 5 arrobas.
New York	34,485	25,891	21,810
Baltimore	14,616
Boston		5,645
Hampton Roads, (for orders)	30,468	26,728	42,488
Saint Thomas, (for orders)		39,808
Total	79,569	98,072	64,298
europe.
Channel	263,856	122,926	123,087
Liverpool	4,866	7,364	18,260
London	40,941	598	3,414
Hamburg and Bremen	205,437	166,421	128,526
Antwerp	41 ,278	30,011	17,735
Havre	98,163	47,187	38,116
Bordeaux	46,098	33,454	13,200
Portugal	2,164
Mediterranean	27,064	313	21,433
Total	729,867	408,274	365,240
Total clearances from Santos to all countries	809,436 (or 47,848 tons.)	506,346 (or 36,168 tons.)	429,538 (or 30,681 tons.)
Of which—	4,700 tons.	7,005 tons.	4,593 tons.
To the United States	43,108 tons.	29,163 tons.	26,088 tons.
Or to United States about	8 per cent.	19 per cent.	15 per cent.

N. B.—This table does not comprehend coffee exported coastwise to ports in the empire. During the crop-year just ended the coastwise shipments of coffee from Santos amounted to 16,800 bags of 60 kilos., or 993 tons.

Note.—The steady increase of the crop and shipments from Santos, (in the province of Saint Paul’s.)

This is a better cleaned, whiter, and higher-priced coffee than that of Rio. It is sold frequently in the United States as Java or La Guayra. It goes chiefly to the north of Europe.

Totals Brazil coffee to all countries.

	Crop-year 1874–’75.	Crop-year 1873–’74.	Crop-year 1872–’73.
	Tons.	Tons.	Tons.
From Rio	185,193	120,570	171,905
From Santos	47,848	36,168	30,681
Total	233,041	156,738	202,586

The bottom figures show the whole (export) coffee-crop of Brazil for the years named.

Totals Brazil coffee to the United States.

	1874–’75.	1873–’74.	1872–’73.
	Pounds.	Pounds.	Pounds.
From Rio	226,128,254	172,626,560	204,815,680
From Santos	10,542,752	15,691,520	10,286,680
Total	236,671,006	188,318,080	215,102,360

The falling off of shipments of Brazil coffee to the United States during 1873–’74. (the year of the panic, September, 1873,) was not due to any lessened consumption in the United States, but to very high prices in Rio for Rio coffee, under an unexpected demand from Europe to supply what was short in crop from other countries.

According to the returns of the United States custom-houses for 1873–’74 there were imported into the United States from all countries,

From July 1, 1872, to 1873	293,281,256	pounds of coffee;
From July 1, 1873, to 1874	295,271,697	pounds of coffee;
Showing an increase during the year of panic of 2,000,000 pounds	1,990,441	pounds, or nearly
The value of the former was		£44,106,604
The value of 1873–’74 was		55,040,965
		10,834,361

Or nearly $11,000,000 more paid in the United States for coffee during that year than during the year previous.

Note.—Of the whole import into the United States (of coffee) Brazil furnishes, generally, from 70 to 77 per cent.

Thus of the whole imports into the United States in 1872–’73	293,281,256 pounds,
Brazil sent 73 per cent., or	215,102,360 pounds.
Of the whole import in 1873–’74, (year of high prices)	295,271,697 pounds,
Brazil sent only 64 per cent., or	188,318,080 pounds.

In previous years, 1870–’71, 1871–’72, of the whole import of coffee into the United States Brazil has furnished as high as 76 and 77 per cent. This percentage falls off, as in 1873–’74, whenever the price of coffee in Rio, as in that year, goes above 16 or 17 cents. Whenever Rio coffee costs the consumer in the United States over 20 cents a pound, other coffees costing no more, or but little more, and of higher quality, take its place.

JOSEPH M. WEIGHT & CO.

[Inclosure 2 in No. 274.]

Table showing the customs-duty on coffee in the countries named.

Countries.		Rate.		Equal in U. S. currency to—
				Per pound.
1.	Great Britain	14 shillings per cent., (112 pounds)		80 03.04
2.	France	150 francs per 100 kilograms	Kilogram = 2,206 pounds	14. 29
3.	Russia	1 rouble 50 kopecs per pood, (40 lbs):	Rouble = 75 cents	2. 80
4.	Germany. (empire)	5 thaler 25 groschen per centner. (101)	Thaler = 74 cents	4½
5.	Austria-Hungary	8 florins per centner	Florin = 48 cents	3. 84
6.	Italy	52.5 centimes per kilogram	100 centimes = 95 cents	4. 75
7.	Sweden	10 ore per pound		2½
8.	Norway	5 B. per pound		4⅓
9.	Belgium	13.20 francs per kilogram		1. 15
10.	Portugal	100 reis per kilogram		4. 92
11.	Denmark	12 skillings per kilogram		3. 05
12.	Holland	Free		Free.
13.	Chili	$1.15 per arroba of 25 pounds		4. 33
14.	Argentine Republic	25 per cent. valuation fixed of $10		2½

1. This statement is from the monthly report of the chief of the Bureau of Statistics, (Treasury Department,) for June, 1874, and for the twelve months preceding included therein.
2. The small shipment from Rio de Janeiro to United States in October, 1873, was in consequence of apprehension here (Rio de Janeiro) that the September panic (September, 1873) in the United States would lessen consumption, and sales be at a loss. These passed, and note the increase in November; the shipments were less in the following months (until January, 1874) because of the high prices in Rio de Janeiro, demand for Europe, and heavy shipments there. The price in Rio was very high in December, 1873, January and February, 1874—higher than known before—and there was a sudden fall in prices in Europe and the United States in March, and many houses suffered heavy losses. To all this succeeded the financial difficulties in Rio de Janeiro in May, 1875.
3. During January, 1874, the price of coffee in the United States was higher than has been known for a long time; and this notwithstanding the September previous (1873) panic. Note the large exportation from Santos to United States (larger than before or since) in the month of January, 1874, in consequence and in hope of securing the very high price then in New York. It fell suddenly in February and March.