File No. 832.61333/111.
The American Ambassador to the Secretary of State.
Rio de Janeiro, November 18, 1912.
Reply to Department’s Nov. 9, 1912. I have been informed by the Brazilian Minister for Foreign Affairs, in an aide mémoire, that the Government of São Paulo accepts the obligation to liquidate the entire stock of coffee now in New York, by April 1, 1913, amounting to about 950,000 bags. The coffee will be sold in the legitimate market in order to prevent speculation by combined interests as might occur if, for instance, the stock were offered at public auction at the mercy of the coffee roasters and without benefit to the consumers in America. When sale by public auction was tried in Europe for a much smaller stock buyers held off in order to force prices down. The result was there was not a single bidder and that market had to be abandoned. If this procedure were applied to a stock of nearly one million bags, it would cause a general break in the coffee market which would be a serious detriment to the market and to the State of São Paulo, benefitting the New York interests alone.
If this understanding is satisfactory to the Department of Justice the Brazilian Foreign Office and the Embassy will exchange notes in this sense.