Brazil today and tomorrow

THE COFFEE INDUSTRY OF BRAZIL

The huge coffee industry in Brazil will not receive a great deal of space in this book for two reasons: the first is that the subject needs a special monograph to deal with it thoroughly, and there is an entire literature on the subject, especially excellent in French, Portuguese and Italian; the second reason is that coffee culture and marketing is so highly organized that there is little room for outside enterprise. Existing plantations are probably quite capable of taking care of what new planting may be required—and this likely to be in the immediate future: the drastic checks given to planting by the authorities after the terrible fright of the great over-production of 1906, that led to the much-discussed Valorization, have done their work so thoroughly that at the present, with the elimination of many thousands of trees owing to exhaustion, there is room for extended planting on São Paulo and Minas fazendas. Brazilians, to whom life on a fazenda is always pleasant, are large owners of coffee-producing lands, and are quite aware of economic conditions, as well as being experienced growers and exporters of coffee. I do not, therefore, advise any tyro to enter upon the business of a coffee fazenda; such plantations offer good opportunities for investment, but apart from that angle do not call for outside activity.

There are many foreigners in the coffee-producing business in Brazil, of course. Italians, besides supplying a very large percentage of the labour on the S. Paulo estates, are considerable owners of plantations; the Dumont Estates, English owned and operated, are world famous; and the greatest single owner of coffee trees in the world, possessor of thirteen million shrubs, is Francisco Schmidt, who began life in Brazil as a poor German immigrant.

The first coffee plants brought to Brazil were of the liberica variety and were planted in Pará at sea-level, a situation to which this kind is not averse. This was in 1727 and when in 1761 the Mother Country remitted taxes on coffee from her American possessions, cultivation was encouraged and spread south to Maranhão, Ceará, Espirito Santo, Minas and Rio, eventually reaching the red diabasic soils of São Paulo. The variety grown here is chiefly café arabica, preferring an upland habitat, but in the course of years Brazil has developed hardy hybrid varieties of her own.

A couple of sacks of coffee are said to have been sent out from the south early in the nineteenth century, but real business did not develop until after Dom João arrived and promulgated laws freeing Brazilian trade from its swaddling clothes. Between 1835 and 1840 export began in large quantities, the latter year recording 1,383,000 sacks sent abroad for sale; slave labour was used, and the interior was searched for the deepest blood-red lands, found in their richest belts in São Paulo State.

By the year 1870 Brazil was exporting three million sacks annually (of sixty kilos, or about one hundred and thirty pounds, each); before the end of the century the output was ten million sacks, but meanwhile Brazil passed through a severe labour crisis. Abolition of slavery in 1888 left the plantations without an adequate supply of workers: it was necessary to supplement the free negro element remaining at work with more “braços”—the eternal need of Brazil. Experiments had already been made in colonization by Dom Pedro, and these proved the excellence of the Italian labourer; prompt measures were taken by the State as well as by private fazendeiros to bring agricultural workers from North Italy, the breach was filled, and so successfully that today out of a population of three million people in S. Paulo State, one million are Italians. Disputes occurred in early years owing to the disparity of race, and partly the lack of experience of the planter in dealing with white labour, but the State Government took up the cudgels on the part of the immigrant, saw to it that he was paid justly and that his condition was economically sound—to the great advantage of coffee cultivation in Brazil. This was the work of the Patronato Agricola, a Brazilian invention which owes much to Dr. Sampaio Vidal; its successful operation was instrumental in contenting the immigrant who came to work on coffee plantations, and while it was at first regarded with suspicion by some fazendeiros, eventually received their cordial co-operation as a source of mutual benefit.

Not only São Paulo but the coffee-growing regions of interior Rio, Minas, and Espirito Santo, sought immigrants officially: in spite of efforts there was no section of Brazil so successful as the southern State. Colonos who were brought to Minas melted away to São Paulo, perhaps chiefly on account of the “sympathy of numbers.” São Paulo eventually remained the only State with an organized, active immigration system.

At the end of the nineteenth century big prices were paid for coffee: on a few occasions a sack fetched one hundred and thirty-five francs, and large quantities were sold at ninety-five and ninety-seven francs. Cost of production was about fifty francs, and sixty-six was considered a fair return on investment; the industry was greatly stimulated by these profits and planting began feverishly all along the lines of deposit of the richest red soils. These new plantations came into bearing four or five years later, and in the crop season of 1906–07 a staggering yield was ready for an overwhelmed market. The bounty of nature brought Brazil face to face with ruin.

São Paulo State harvested 15,392,000 bags; Rio de Janeiro State offered 4,245,000 bags; Espirito Santo and Bahia together had another half million. Altogether Brazil had over 20,000,000 bags of coffee for sale, to a world whose annual consumption was then not much more than 17,000,000 bags; and in addition to the new Brazilian crop there was a harvest from Mexico and Central America of 1,500,000 bags, from Colombia of 1,000,000, with another half million from the East and 400,000 from the West Indies—and the not to be ignored contribution of real Mocha coffee of 115,000 bags.

Nor was that all. There had been a big Brazilian crop in 1901–02, reaching the then unprecedented figure of 15,000,000 sacks, and with a world consumption at that time of only 13,000,000 there was a large surplus of this coffee left in hand, as well as stocks of other varieties. Prices went down, and the planter was only saved by the imminence of a fall in exchange which meant that although his coffee sold for less gold than normally, yet this gold brought so much more Brazilian paper when exchanged that he was able to pay operating expenses and still count a profit in national currency.

From a gloomy level of thirty francs a bag, coffee rose in 1904–05 to about forty and fifty francs; but the threatening feature of the situation was retention in world warehouses of a stock averaging 11,000,000 bags. When Brazil was confronted with 20,000,000 bags of the new 1906 crop she thus had to consider a market which already held seven-tenths of the coffee needed annually by the world, apart from other sources of new supply.

To throw her coffee upon Europe and the United States meant the ruin of the premier industry of Brazil. After a series of hotly debated discussions, which had begun with the menace of the big crop of 1902, the State of São Paulo, with the support of the Federal Government and in agreement with the States of Rio and Minas, decided upon the famous, greatly abused and passionately defended Valorization Plan. The methods adopted may be open to criticism, but some remedy had to be sought, and the plan had the merit of boldness as well as the sanction given by success; the fact that this success was partly adventitious would probably prevent recourse to like measures at future times. The “Taubaté Agreement” forming the base of the plan obliged the contracting states to sell their coffee at not less than a given price,^[11] to prevent exportation of grades below Type Seven; to commence propaganda work abroad to increase coffee sales; to collect a surtax of three francs per bag on all exports; and to limit new planting of coffee. It was farther suggested that the surtax proceeds should be held by the Federal Government and used for the amortization of the loan to be made, creating a Caixa de Emissão e Conversão to deal with financial aspects of the Plan and to regulate exchange—an excellent measure which was eventually carried out.

Difficulties checked the original agreement and in the end São Paulo faced the situation alone—meanwhile the harvest was coming in, and the price of coffee dropped below thirty francs a bag—obtaining a preliminary loan of £1,000,000 on August 1, 1906, from the Brasilianische Bank für Deutschland, for a one-year term; in December £2,000,000 was obtained through J. Henry Schroeder & Company of London, and subsequently the National City Bank of New York negotiated another million sterling. The money was used to buy and store the coffee of the Brazilian plantations, and was rendered sufficient only by the co-operation of fazendeiros and exporting houses.

In June, 1907, São Paulo held 8,000,000 bags of coffee, buying only high types and through the sole agency of Theodore Wille and Company, a strong coffee exporting firm of Brazil. When Minas and Rio protested against the exclusion of their eight and nine type coffees from the stores, the Federal Government at last actively assisted, lending the State of São Paulo ten million francs for the purchase of the lower types. In July, 1907, S. Paulo stopped buying. She had acquired over 8,000,000 bags, one-third of the total purchase price of 400,000,000 francs coming from foreign loans and the remainder from advances by commission houses in Brazil on coffee consigned to their keeping. Subsequent sums for the redemption of this coffee were obtained: two million pounds sterling came from Rothschild’s through the Federal Government, and a similar sum was obtained by the lease of the (State) Sorocabana railway to the Farquhar syndicate.

With the exception of a few hundred thousand sacks all this coffee was sent to different world markets for storage until opportune sales could be made; for a whole year not one ounce of it was sold, and then, when the next Paulista harvest turned out to fill only five million bags, the preciously guarded coffee was dealt out warily to a firm market at an average price of sixty francs a bag. Without this action Brazilians say that the price must have fallen to twenty francs.

At the end of 1908 financial adjustments were made; older debts were covered by a new loan of £15,000,000 arranged with an international syndicate headed by Schroeder of London and the Société Générale of Paris. These houses took £5,000,000 each, and the remainder was distributed between Germany, Belgium and New York. The loan was guaranteed by the coffee surtax, raised to five francs a bag, and by the seven million bags remaining in international warehouses. Havre, with nearly two million bags, was the greatest holder of the valorized coffee, and it continued to be sold during the next five years only when the price offered profits.

When the European War broke out stocks of this coffee amounting to three million sacks still lay in the countries suddenly rendered belligerent—it should be mentioned here that coffee improves by careful keeping. The combined stocks in Hamburg, Bremen and Trieste totalling 1,200,000 bags were at once taken over by the Teutonic governments, and the price (about £4,500,000) paid to a Berlin bank; it got no farther because proceeds of the coffee sales being mortgaged to London bankers, transfer would “benefit the enemy.” Germany was in this case only following the same financial rules as other belligerents, but Brazil was placed in the invidious position of innocent bystander, and in 1922 was still trying a way out of the difficulty. Adding the value of the Antwerp stock also under German control (718,000 sacks) São Paulo was owed nearly seven million pounds sterling, and this sum together with the price of the Havre stock, 1,216,000 bags, was about equal to the foreign debt of S. Paulo.

Although payment for the seized coffee stocks was necessarily delayed, São Paulo was by this suddenly opened market for her coffee relieved of the anxious time that might otherwise have been hers after the 1914–15 crop was harvested. A large crop was once more the result of perfect climatic conditions following small colheitas (harvests) of one or two previous years.

Early in 1915 the Federal Government prepared to lend São Paulo one hundred and fifty thousand contos of reis with which advances were to be made to planters, enabling the retention of surplus coffee—a variant of the valorization plan which was more generally approved. But by good fortune sales of Brazilian coffee far exceeded expectation; the Scandinavian countries enormously increased their purchases and although a general idea prevailed that it was largely passed on to Germany, no objection was for a long time raised by the Allies.

Prices, 1921—down to 7 m. bag; 1922 15816 m. In 1921 shipments were checked by the slump, and the Brazilian Government bought and held 4,500,000 bags. Prices, fallen to 7 milreis in 1921, recovered to over 15 milreis per 10 kilos in early 1922.

Agricultural maps of Brazil, freely and courteously handed to any visitor at the Escriptorio do Informações do Brasil in the rue St. Honoré in Paris, show a huge patch of green in the middle of S. Paulo State and extending to a point very near the frontier of Minas Geraes. This patch represents some seven hundred and twenty-two million coffee trees, covering a total space of over two million acres.

At least one hundred million pounds sterling is invested in coffee plantations, and, with an output of an average twelve million bags, income from crops is not less than twenty-five million pounds sterling a year.

Advancing into the interior when the advent of railroads made cultivation of the sertão a commercial possibility, the culture of coffee in Brazil and especially in São Paulo is carried on upon a large scale: the plantations are great businesses, scientifically operated. The number of trees on a good estate is likely to run up into millions, although no other single grower rivals Colonel Schmidt’s production of eleven or twelve thousand tons of coffee. Visiting a fine fazenda one is aware of seeing the inside of a commercial undertaking of striking magnitude, where activity is regularized, the whole life of the fazendeiro and the colonos subordinated to the supreme interest—at least during the rush season of the colheita. Looking from the windows of the fazendeiro’s residence, which is generally upon a little eminence, one sees an ocean of dark green shrubs, planted in perfectly even lines, stretching away in unbroken symmetry as far as the eye can see. The São Paulo land chosen for coffee very often lies in long gentle slopes, its deep purple-carmine tint in sharp contrast to the glossy emerald coffee leaves, and down and up over the undulations run the rows, often extending for eight or ten kilometers. The storehouses, pulping machinery, and great cement drying grounds where the coffee is laid in the sun, are frequently in the hollow where the indispensable river runs; rows of neat little houses of labourers, the Italian colonos who plant, cultivate and gather the coffee, stand within sight. In the background is the area of wild woodland, for “no fazenda can prosper unless it has a certain amount of matto,” say the Brazilians. In the flowering season a coffee estate is a lovely sight, the sturdy shrubs strewn so thickly with waxy white blossoms that it seems as if snow had fallen on them; the air is clean, cool and sunny, and bees hum over the sweet-scented flowers. The trees are larger than those seen in Central America, are unshaded, and generally three or four roots stand together to make the bush. The ground beneath the shrub is kept carefully weeded.

When the round berries turn red harvesting begins. Men, women and children turn out, trained to strip the berries from the slender little branches without injuring the tree; the whole fazenda is in a bustle, the water-channels are racing with scarlet berries carried along in the stream, and the machinery house is noisy. When the berries are pulped and the twin beans freed and cleaned, the business of packing begins; day by day wagon loads of sacks leave the fazenda for São Paulo city, consigned to Santos, and thence to some country overseas. Brazilians appear to love fazenda life; the wife of a coffee fazendeiro will often take as keen and business-like an interest in the work as her husband does, discusses theories of planting with spirit, and will show you all the details of the new imported machinery. There is a true hospitality and geniality permeating the fazenda in Brazil; very large sums are often made, and while quantities of coffee money have been royally wasted on extravagances, there is a class of strong business men in plantation work who put profits into improvements, follow new ideas, and build up their estates from year to year in an admirable manner.

It is in São Paulo, and especially about Riberão Preto, Campinas, São Simão, S. Carlos, Dous Corregos, Botacatú,—all along the lines of the fans of railroad—that the great coffee estates are found. The original Coffea Arabica has some naturalized children in Brazil of great merit and hardihood; the Nacional or Commun, the delicate Bourbon, yellow Botacatú, the big aromatic Maragogype, all have their defenders. From these plantations come the hundreds of thousands of tons of coffee that have made Brazil the premier coffee country of the world, and brought her to this eminence in a remarkably short space of time. The development of coffee culture in Brazil, and the simultaneous development of public taste for its essence, is one of the great industrial stories of the nineteenth century.

The interior of Rio State, with its endless series of little round hills crowned with coffee shrubs, is an assiduous producer; farther inland Minas Geraes substituted cotton with coffee when the United States began to sweep world markets with her product, but is now going back to cotton here and there as the demand of her own factories brings unheard-of prices for native fibres; she is however a regular supplier of coffee, in common with her neighbour Espirito Santo, and the more northerly state of Bahia. North of Bahia commercial production ceases, but, as in the case of cotton, shrubs may be seen all along the Brazilian littoral, up to Maranhão and Pará—of an African variety which does not need hilly country.

The world is steadily drinking more coffee. Consumption was only able to take ten million bags in 1885: the estimate for 1922 is 22 million bags. It is this reflection which preserves the fazendeiro from having nightmare whenever he sees a fine colheita promising. Increased sales of coffee seem to be partly the result of greater world demand for non-alcoholic drinks, but have been undoubtedly developed wherever a systematic propaganda has been carried out. São Paulo State went deliberately and level-headedly into the advertising and demonstration business; the campaign was first started in Great Britain, by the São Paulo Pure Coffee Company, which roasts, packs and sells good grades of beans. Numbers of cafeterias were established in which strong, hot, sweet Brazilian coffee was perfectly served. Later on the plan was carried to other European countries—notably France, Germany and Austria, all good customers of Brazil—to North America and even to Japan.

Recently the São Paulo Pure Coffee Company was acquired by the Brazilian Warrant Company, an enterprising house established in Brazil, with branches in São Paulo city, Santos, and Rio de Janeiro, and headquarters in London: a specialty is made by this company of advances against coffee, as well as sugar, cereals and general merchandise, while they are also commission and consignment agents. Exporters of Brazilian coffee are legion, but it is instructive to note how large a proportion of the names listed are Brazilian; coffee is not one of the businesses which the South American leaves to the foreigner.

Coffee accounts for forty per cent of all the Brazilian export. As far as S. Paulo is concerned, coffee represents over ninety-seven per cent of her exports. In 1915 the state’s total exports were worth a little over 465,000 contos, and of this coffee was worth 453,000 contos. In S. Paulo city itself if one is not in business circles the predominance of coffee might escape the visitor but not so in Santos; here, in the coffee port, the apparatus of shipping has largely been constructed with coffee-loading as the aim: special mechanisms serve the ceaseless stream of laden coffee bags that arrive at the lines upon lines of armazens (warehouses) on the dock front. In the stony streets the scent of coffee prevails; at every doorway burly negroes are hauling out sacks of the aromatic bean; the cluster of banks down the main business street, some Brazilian and many branches of foreign houses, all live upon coffee. The dealers, commission men, shippers, roasters of coffee represent the commercial existence of the port.

The coffee industry is one which is a satisfaction to contemplate because it is a clean, wholesome business, from first to last; the conditions under which it is carried on are not only ably organized and in a prospering state, but the workers as well as the estate owners and shippers have a chance to make money and lead pleasant lives.

THE RUBBER INDUSTRY ON THE AMAZON

Rubber, the elastic gum bled from certain trees and shrubs, has been so long associated in thought with the sweltering, shadowy forests of the great Amazon river, that it is not a matter for wonder that for many years after Wickham made his famous experiments with rubber seeds, first in Kew and then in the East, both Brazilians and the general public paid little heed to the possibility of plantation rubber as a commercial rival of the Amazonian product. It was not until 1910 that manufacturers began to take plantation rubber seriously and to use it freely, and not until 1912–13 that production from these sedulously cared-for trees drew level with and surpassed the output from Brazil. Today, with plantation rubber offering something like one hundred and fifty thousand tons of crude rubber, and Brazil maintaining her average output of about thirty-seven thousand tons, the race would be a very uneven one if it were not for one factor, the wonderful resiliency of “hard fine Pará” which renders it unequalled in quality.

The two industries, that of Brazil and of Malaysia, are strikingly at variance in almost everything except the fact that they deal with extraction of the latex of hevea brasiliensis. In Brazil we have enormous areas of dim, sultry, water-bordered forest, where wild rubber trees are sought for amongst eighty or so other varieties of trees: where the labourer is, or at least imagines himself to be, a free agent, bound only by his debt to the central store, working when he thinks fit, living in a solitary hut without society, and making a little balance of profit at the end of the season if he is lucky; he buys all his necessities of food and tools in the dearest market in the world, and sells at the price forced upon the Amazon by the rival industry half the world distant. In the East is an organized industry operated by wealthy companies, where land was cleared, rubber planted methodically, hired labourers working under control, paid by the day, where the latex is coagulated in factories, milled into fine sheets, and goes to market in a form that does not bear outwardly any relation to the big black balls, smoke-cured in the seringueiro’s hut, sent out from the Amazon. Nevertheless it is the unorganized, unscientific industry which yields the product with the highest price on international markets, and, huge as is the deluge of plantation rubber today, there is no good reason why the Eastern and Amazonian industries should not continue side by side. Arabian coffee has not been commercially ruined on account of Brazilian production of coffea arabica.

There are in the world very many plants and trees yielding rubber of differing qualities. Three kinds of elastic gum are exported from Brazil in addition to the latex of the heveas: they are known as mangabeira rubber, from mangabeira hancornia speciosa; maniçoba, from the manihot plants of several kinds (euphorbias, and first cousins of mandioca); and caucho, drawn from the castilloa elastica tree. All these have their places in world markets, but, as also in the case of balata from the Guianas, and the gum of the guayule shrub in Mexico, it is not upon these rubbers that the great manufacturing industries of the world are based. That distinction belongs to the heveas, native dwellers of the deep, hot Amazonian valleys.

The elastic, resilient, waterproof properties of rubber were first discovered by the native children of the Americas, both in South and Central America and Mexico. When Hernan Cortés took his handful of conquering Spaniards into Mexico he found the Aztecs playing a game with bouncing balls made from castilloa, but during three centuries the Europeans visiting the New World did not dream of turning the gum to any utilitarian purpose. The first traveller who took recorded note of native use of rubber for water-proofing was the French scientist, de la Condamine, who came to Peru and travelled down the Amazon in 1743. He took specimens of what he spelled as “caoutchouc” back to Paris. In 1779 Priestly noticed that the gum would erase pencil marks on paper; small pieces were sold for this purpose, and as the chief supplies came from the East Indies (from the ficus elastica) the name India-rubber clung to the product. In 1823 Charles Macintosh found that rubber was soluble in benzine, and so led the way to its commercial adaptation—thinned out, spread into sheets, rendered amenable; the idea applied to waterproof coats immortalized his name.

In 1832 the Chaffee & Hoskins firm, founded in the United States, began manufacturing water-resisting objects, and thus laid the foundation of the present great rubber business in North America; their company, the Roxbury India Rubber Co., had in its employ a young man named Goodwin, and when this experimenter discovered that the gum would resist great extremes of heat and cold when sulphur was mixed with the solution, the process of “vulcanization” was the result, and rubber was made applicable to a score of new uses. Its great commercial employment dates from this time.

The Amazon valley began to send coagulated gum abroad: before this occurred, objects, chiefly high boots, were sent all the way to Pará to be water-proofed with a series of layers of the fresh latex. The industry was still in existence in the 1850’s, but died a natural death when rubber manufacturing got into its stride. It did not make this movement until large quantities of crude rubber began to reach world markets, and such amounts were not shipped until the Amazon received a great addition to its labour supplies. In 1877–79 one of the terrible droughts that scourge the State of Ceará drove the populace out of the foodless region; hardy, daring, the Cearenses swarmed up the Amazon, into the reaches of the upper tributaries, into the Acre, searched the forests for seringueiras, and gathered a great harvest of latex. A little later the bicycle was invented and popularized, rubber tyres were called for in addition to the established demand from the boot and shoe trade, and rubber export became one of the big businesses of the industrial world.

The Amazon had shipped 31 tons in 1827; 156 tons in 1830; 388 tons in 1840. In another ten years she was shipping 1,467 tons; in 1860, 2,673 tons; 1870, 6,591 tons; 1880, 8,680 tons. Three years later she was sending over 11,000 tons, year by year adding about 1,000 tons until by 1890 the supply and demand came to 19,000 tons. It may be said here that up to the present demand has invariably taken the year’s supply; with great volumes coming from the Eastern plantations a surplus may occur, but with the present greatly stimulated demand such a condition is not yet in sight.

Steady rises in Amazonian production went on at the end of the century, and 1903 registered the receipt of over thirty thousand tons; when in 1906–07 the crop attained thirty-eight thousand tons output it had about reached its maximum with the quantity of labour available upon the Amazon. Production has fluctuated about this figure for the last ten years. It could be increased, if the estimate of 300,000,000 untapped trees in the deep interior forests is anywhere near the mark, to almost any amount; but the present production is the work of some one hundred and twenty thousand seringueiros, chiefly Brazilians, with some Bolivians and Peruvians, and there is no immediate prospect of labour supplies being largely augmented.

The sensational leaps in prices that have occurred in world markets since rubber became commercialized have brought great quantities of money to the Amazon; many fortunes rocketed to the skies, and there was a period when a golden flood flowed up the river as well as down, when Manáos, the rubber city of the riverine interior, displayed more luxury for its size than Paris, and the best diamond market in the world was in this remote spot. Anything sufficiently extravagant could be sold; a stream of jewels, silks, fine wines and foods, furniture, carriages, adventuring people and solid cash went up the Amazon, passing for a thousand miles nothing but the green matted walls edging the huge yellow river and an occasional palm leaf shack perched half in the water, and one or two trading points, to find their objective in the brilliant little mushroom town on the Rio Negro. There was one year when the yield of taxes from rubber to the public revenue of Amazonas was twenty-three thousand contos of reis, and this at an exchange of over £66 to the conto, means £1,520,000 or nearly $8,000,000. Practically the whole of this money was collected and spent in Manáos, then (1899–1900) a city of fifty or sixty thousand population—much of it “floating,” as its present reduction to about forty thousand demonstrates. It was in the golden period of Amazonian rubber exports that both Manáos and Pará clothed themselves in all modern civic graces; fine public buildings, well-paved streets, street-cars, good sanitation, water-supplies of unimpeachable source, electric light, and numbers of splendid private dwellings remain as a return for some of the floods of money earned by the gum of the deep forests. There was at the same time tremendous waste and an enthusiastic “graft” era, which has left a heavy burden of debt upon the Amazon. Numbers of unfinished buildings, some begun at great cost, still stand in Manáos, eloquent witnesses to the headlong gambling spirit that informed this city a few years ago. The Amazon refused to believe that any but temporary shadows could fall upon the rubber industry: there had been several periods of depression from various causes before plantation rubber loomed into view, but always “something happened to help the Amazon,” whether quickened demand or a fall in exchange which reduced local costs; now the European War is operating to stimulate American demands for Brazilian rubber, and to that extent faith in good luck is again justified, but the rubber-producing centres will need good works as well as faith if the present rewards, comparatively modest as they are, are to be maintained.

In 1874, and for some years afterwards, Amazonian rubber prices ranged between fifty-two and seventy-five cents (U. S. currency) a pound; between 1879 and 1880 there was a quick climb, due to the bull operations of a Brazilian syndicate which bought and held rubber. It was temporarily successful, prices during the last year of the ring’s existence touching one dollar and twenty cents and never falling below ninety-five cents, but in 1884 the bottom fell out, and rubber took a hasty dive to forty-eight cents—recovering, however, in the course of the next year, in response to demand for rubber tyres, to ninety-eight cents. For the next ten years rubber fluctuated about sixty, seventy and eighty cents, with new industrial uses developing in Europe and North America and demand always keeping pace with supply; by this time the total yield offered to the markets was about fifty thousand tons yearly, the Amazon supplying half and the rest coming from West Africa, Mexico and Central America. In 1896 the price rose, ranging between ninety cents and one dollar and twelve cents, and the Amazon boomed again as it had done twelve years before; Manáos, the terminus of ocean transportation and the central collecting point for the rubber of the upper rivers, bedecked herself in these rosy days. Five years later the failure of the American Crude Rubber Company, a distributing firm domiciled in New York, threw large stocks of the goma upon unready markets, and the price slumped. Rubber merchants upon the Amazon would have suffered more than they actually did had not the factor of exchange come to their aid; between 1899 and 1906 the value of the milreis oscillated all the way from sixpence to fifteenpence, and while to some Brazilian operations a low rate of exchange meant embarrassment if not ruin, it spelt salvation to the dealer in raw products. In 1906 exchange was fixed by the establishment of the Conversion Office in Rio, but by this time rubber was fetching such good prices that the Amazon was again basking in prosperity. The prices paid for Amazonian rubber during the period from 1903 to 1915 show the rise of the third great crest of rubber waves to the dazzling height of 1910, when the merchants who would have sold at seventy-five cents and made a profit found themselves with a dollar and a half, two dollars, two and a half and then three, without knowing why; money came like dew from heaven. In many instances it also melted as readily:

While the feverish drama of the Amazon was going through scenes typical of a gold-mining rush, the curtain was slowly rising upon another rubber scenario away over on the islands and peninsulas of Malaysia. Its movement passed almost unnoticed and unheeded by the very people who had most cause to watch it with alarm.

In 1871 an Englishman named Henry Alexander Wickham sailed from Trinidad up the Orinoco river, there studied latex-yielding trees and eventually made his way to the Amazon through the interior forests by way of the river Negro. His book of notes was published in London in 1872—Rough Notes of a Journey Through the Wilderness, with his own excellent drawings to illustrate his story of actual labour in the “ciringa” districts. In 1876 he was back again on the Amazon, with the idée fixe of rubber so firmly in his head that, going up the Tapajoz from Santarem, he filled his cases with seventy thousand seeds of hevea brasiliensis and carried them over to Kew Gardens in London. Here in carefully graduated hot houses the oval, mottled seeds were germinated, and in June of the same historic year Wickham was carrying his baby seedlings to Ceylon, believing that this island offered the climate most similar to that of the Amazon to be found under the British flag.

Two thousand nurslings were thus transplanted to the Spice Isle, lesser quantities going to Java, British Burma, Singapore and other points which appeared to offer the needed conditions for healthy growth. It was in Ceylon that the first young rubbers flowered in the year 1881; there is no earlier record of the blossoming of heveas outside their habitat in the Amazonian valleys. The resulting seeds were used to create new plantations, but the whole thing was still in a purely experimental stage; time proved that many saplings were planted under incorrect conditions, but the planters had nothing but theory as their guide; they cleared land—at great expense—kept it clean while the young plants grew, and waited; they did not know if the heveas would live, or that, living, they would produce latex coagulating into commercial rubber. Nor did the Amazon rubber dealers know it or believe it. When tales of Wickham’s enterprise came to Brazil a law was passed forbidding the export of rubber seeds, but this locking of the stable door after the loss of the steed was of no more avail than the subsequent measures promulgated to prevent export of the uricury nuts used for smoking the latex.

That the Amazonian industry could be duplicated in the East was not seriously credited. The thing was impossible! The plants would die; or if they did not die they would not yield latex; if they yielded latex it would coagulate into such wretched rubber that no market would accept it. Disease, blight, drought, would ruin the presumptuous plantations—something, in fact, must happen to prevent such an incredible, absurd event as rivalry between the famous and unique “black gold” of the Amazon and a plantation stepchild. The few people who spoke out about the danger were ignored.

While unbelievers still protested the deluge of plantation rubber began. In 1900, 4 tons of crude rubber were exported from the East; in 1905, 145 tons; in 1910, over 8,000 tons; in 1912, over 28,000 tons; in 1914, well over 71,000 tons; in 1915, nearly 107,000 tons. The output for 1916 is variously reckoned at 140,000 and 160,000 tons, from an area totalling about 1,350,000 acres in Ceylon, Malaysia, Dutch East Indies, India and Borneo.

When plantation rubber was first offered to manufacturers they were not greatly interested; it was taken rather grudgingly and at prices well below those paid for the black pelles of the Amazon to whose perfections and imperfections the industry was thoroughly accustomed. It was the artificial forcing up of prices in 1910 that sent manufacturers into the arms of the planters, for, while plantation rubber profited by the golden rain of that year, it did not attain the value of “fine hard Pará.” Today plantation rubber sent to the markets in sheets of creamy “crêpe” or clear brown gum is used for almost every manufacture demanding rubber; there are still some complaints that it is over-milled, that the treatment it undergoes takes the “nerve” out of it, and for this reason Amazonian rubber remains triumphant in certain lines requiring the highest resiliency—as, for instance, rubber thread. In spite of the preponderance of quantity of the plantation product since 1913 there has nearly always been a margin of price in favour of Brazil; during September and October, 1916, “fine hard Pará” fetched about seventy-five cents a pound in the New York markets while Plantation only brought sixty-five (due to shortage of Amazonian supplies through shipping difficulties as well as droughts upon the upper rivers which, impeding navigation, prevented normal supplies from finding exit); the difference in price is larger than is apparent, for reasons resulting from differences of preparation of the two products. Plantation rubber, product of an organized modern industry, is placed upon markets in such a form that the manufacturer can send it direct to his mills; the average amount of impurities contained in the sheets is less than one per cent. Amazonian rubber on the other hand contains anything from fifteen to forty per cent of impurities, which may include leaves, sticks and dirt due to sheer carelessness, or gums other than that of hevea, old nails, lumps of wood and axe-heads, deliberately introduced by the seringueiro to add weight to his pelle. Add to these considerations the cost of cleaning Amazonian rubber and the loss in time while this operation is performed, and it is plain that the manufacturer really pays a great deal more than the few cents’ difference of the market price for the Brazilian product; this money advantage might be largely retained by the Amazon if methods, not necessarily those of the East, but more careful and cleanly, were employed in coagulation.

The entire series of processes of Amazon rubber production, from the day when the matteiro clears a path in the forest from rubber tree to rubber tree, until the shipper boxes the split halves of the pelles in the armazem in Manáos or Pará, is in remarkable contrast not only to plantation methods, but to the system under which that other great Brazilian export staple, coffee, is prepared for market. It is the contrast between an industry that has evolved itself from methods first discovered by Indians of the forest interior, and another whose processes are mapped out on a preconceived plan. To this day the rubber dealers on the Amazon will tell you that they do not know the cost of production of a kilo of rubber; all that they or the collectors know with certainty is that it must necessarily cost less than the price at which the rubber is marketed—a smaller amount must be paid, and adjustment has to be made in the seringal, not in New York or London; with the inflated prices paid for every simplest necessity of life upon the Amazon, nearly all imported because the craze for rubber-collecting some years ago led to the abandonment of even such prolific crops as beans and mandioca, a time of stress falls most severely upon the people who are least able to bear it. Remedies for the ills of the Brazilian rubber industry have been suggested and demanded for many a year by the more far-seeing Brazilians; there is perhaps no better presentment of the subject than the paracer read to the Brazilian Congress in December, 1913, by Eloy de Souza, afterwards published in Rio under the title A Crise da Borracha (The Rubber Crisis); he speaks of the condition of “economic paradox” by which Amazonas “gave millions upon millions of gold without any part of this being used for the prosperity of the immense region where so much wealth was produced” and tells that when plantation rubber was looming in competition with the Brazilian product the authorities were entreated to arm themselves against the danger, but “the echo of these voices was lost in the wide desert of national indifference.” When the truth could be no longer avoided steps were at last taken, with nothing but the waste of enormous sums in the tragi-comedy of the “Defesa da Borracha” as the result: its failure was no fault of the men who constantly spoke out about conditions, such as Miguel Calmon, the Deputy, the journalist Alcindo Guanabara, Dr. Passos de Miranda, and the “genial and devoted Apostle of the Amazon,” Euclydes da Cunha.

Almost all of the people engaged or interested in the rubber business of the Amazon are agreed upon certain measures which should be taken to put it upon a sounder footing; they are, briefly:—

1.

Increased production of cleaner rubber, whether obtained from Amazonian plantations or by opening out new forestal wild regions.

2.

Reduction of living expenses of the rubber-collector, by increased Amazonian cultivation of cereals, beans, mandioca, fruit, vegetables, etc.

3.

Creation of a sturdier and larger labour supply, by rendering rubber regions healthy, improving living conditions, and thus inviting and retaining permanent dwellers.

4.

Reduction of export taxes imposed by the State authorities of the rubber regions.

The question of Amazon plantations is hotly debated. A few exist, and are living proofs of the fact that planted rubber kept clean of other growth yields latex at four or five years, at which time it is as large as a wild rubber twelve years old; but opponents of the system ask why they should plant “when Nature has already planted?” and declare that the best thing to do is to tap the latex of more of the reserves of the interior, calculated at three hundred million trees. Arguments in favour of this system include insistence upon the superiority of the latex from matured trees slowly developed in their native habitat, the chief reason of the high resilient quality of the Amazonian product; it is along the upper rivers of the Amazonian fluvial network that the “black” hevea is found most abundantly, yielding latex of the best variety, tough, elastic, resilient, and always fetching a better price than the fraca (weak) rubber from the latex of the “white” hevea, or the product of the “red,” which coagulates badly, and is listed as “entre fina” instead of “fina.” It is partly because the seeds which Wickham took from the Tapajoz in 1876 were of the “white” hevea brasiliensis variety, common in these lower regions, that the product of the plantations is more or less of the “fraca” quality; only a few hundred acres of the entire Eastern area under cultivation is planted with the fine “black” rubbers.

Can the untouched rubber regions of the upper rivers be opened up? The districts richest in seringueiras are frequently on the margins of these rivers, accessible by boat, but there are other areas thickly sown with the trees which, as in the Acre Territory, could be served best by a railroad line, such as has been projected to run across this region. Other plans deal with drainage of forestal areas, now rendered exceedingly unhealthy by their swampy, mosquito-breeding condition, and the introduction of immigrants accustomed to torrid climates. At present the working capacity of the collector is reduced from a possible two hundred and ten days, during the seven months of tapping, to an average of one hundred and twenty, chiefly as the result of sickness: he produces thus only about four hundred and fifty kilos of dry rubber, when under better conditions he could be expected to market about seven hundred kilos.

A few years ago Dr. Oswaldo Cruz, a Brazilian authority on tropical diseases, made a report upon the health conditions of certain Amazonian regions and those traversed by the Madeira-Mamoré railway: he said of Santo Antonio that there are “no natives of this place; all children born there die,” and that here (its ill-fame is not unique) “the region is infected in such a manner that its population has no conception of what good health means; for them the normal condition is sickness.” Brazilians born are as much subject to disease, it appears, as strangers, for among the workmen employed in the construction of the Madeira-Mamoré line ninety per cent of the natives of Brazil and seventy-five per cent of the foreigners were weakened by hookworm. Sharp changes of temperature in some districts, producing a devastating pneumonia; dysentery; beri-beri, and the worst and constant scourge, malarial fever, haunt certain of the interior regions: until a better medical service is established, and measures taken to render the country more healthy through engineering work, and through field cultivation, an increase of permanent dwellers in the deep rubber regions cannot be expected. Until then Amazonia can scarcely be other than what Eloy de Souza calls an “invaded region” which has been subjected to a “social phase of pure conquest.”

Cheapening of living expenses can be done just as soon as the fertile Amazon valley again supplies enough food for its population: there was a time, between 1886 and 1891 when the cereals grown sufficed for needs; today, with the threat of falling prices for the precious goma, cultivation has been resumed to an extent which is encouraging, but only a year or two ago Pará, Amazonas and the Acre were together importing beans, rice, and sugar to the value of 11,346 contos (over three million dollars); dried meat (xarque) to the value of 7,400 contos; bacalhau (dried cod), 846 contos; live cattle, 2,000 contos; tobacco, 1,000 contos, and conserves costing 2,600 contos, among other importations. Almost all the above list could be filled from Amazonia if the rubber-collecting fever, relaxing, permitted the development of other industries.

The price paid for many articles of prime necessity upon the Amazon is fantastic. While such rates are maintained it is a matter for admiration that Amazonian rubber can be placed upon the markets at all, in competition with the plantation product; it can only be done by the reduction of the seringueiro’s earnings to a minimum, and this will eventually lead to his extinction if conditions are not remedied. The following is a list of what are considered the chief articles needed by the collector for his lonely sojourn in the forests during the gathering season, with prices in milreis:—

The price of an outfit for the season thus varies from about 324 milreis in Rio to 1390 milreis in the forest, or between, say, 80 and nearly 350 dollars.

If the collector in the course of his season’s work produces four hundred and fifty kilos of rubber, worth, at a good price of about five milreis, 2:250$000 (two and a quarter contos, or about five hundred and sixty U. S. dollars at 1916 exchange), he has left only seven hundred and fifty milreis to carry him through the rest of the year, and to support his family back in Ceará: but even this modest sum is reduced by the river freight of the rubber before it is marketed at Manáos or Pará, three hundred reis per kilo; rent of the seringal, commission to the aviador, and frequently freight of the pelles from the interior of the forest to the water, which items are likely to add up to another four or five hundred milreis.

Denunciations of the “truck” system, and the prices charged to the rubber collector are common; but the supplier of foodstuffs, etc. (the aviador) himself takes long risks and is bound to insure himself against them. His customer (aviado) may become ill and unable to work; he may die; he may, if he can elude the river guards and traverse the steaming interior forests, run away, although in these regions where the river is the only highway, this does not often happen. Also the price of rubber may drop—rubber has been a business so speculative that it has become a gamble in which the aviador, himself caught in a deeply-rooted system, takes long odds. He makes money nearly always, and the ownership of much of the great areas of Amazonian rubber forest has passed into his hands, but he is scarcely to be blamed for securing his profits in the manner decreed by the system; to change the industrial routine would be to effect a revolution upon the Amazon.

The approach of the dry season upon the Amazon heralds the incoming from other northern regions, generally Ceará, of a host of workers. Anyone who has travelled on the steamers going up the river at the beginning of the rubber season has looked down upon the deck where throngs of people are herded together, their hammocks slung in tiers one above the other; at times of drought whole families come out from the “distritos flagellados,” and men, women and children are crowded in an intimacy which would be more trying than it is were it not for the apparently unfailing good-nature and mutual courtesy of these northern peasants. Much of their simple cooking, washing, and toilet changes are perforce unsheltered; gentle, easily amused, they never seem to complain, but, playing their inevitable guitars and singing their modinhas, they watch the yellow flood of the great river, bordered with the line of distant forest, so vast that ideas of size are lost in its sweeping monotony. Arrived at Manáos the collector goes to the store of the aviador, gets his outfit of tools—cups for collecting latex, big knife (machado), little axe, bucket, and metal cone for smoke-regulation in the coagulating process—as well as food and such clothes as he may need, possibly adding a gun, and when the cost of his lodging has been added to the bill, he may set out in one of the gaiolas that ascend the upper rivers, en route to the seringal where he has arranged to work. An average seringal contains fifty estradas; to each seringueiro (collector), two estradas are allotted, tapped on alternate days and each estrada (literally road or walk) contains, in a good seringal, an average of seventy to one hundred and twenty trees. Before the seringueiro does a stroke of work there has been a heavy outlay by the owner (patrão) of the estate for its preparation. Forestal opening is done by the matteiro, the expert forester whose work is probably better paid than any other manual labour of the Amazon; it is he who enters the wild forest, locates the rubber trees within a given area, and makes paths from each seringueira (rubber tree) to the next in the central part of each estrada, always ending by cutting an encircling road which runs all about the estrada. On this outer road the rubber collector usually builds his little hut—“more of an oven than a home,” says Eloy de Souza—of palm thatch, and the tiny smoking room (defumador) where each day’s supply of latex is coagulated.

The work of the matteiro is paid according to the number of rubber trees found and prepared for tapping; he gets about the equivalent of one dollar for each tree; Woodroffe reckons that in the cases when the patrão of an estate has advanced money for the steamship fares of his imported labourers, advanced food and equipment, and paid for preparation of the seringal, each man represents an outlay of “quite £100 by the time he stands up under the trees to tap them.” It must not be supposed, therefore, that because rubber is wild upon the Amazon that it costs nothing to collect it; on the contrary in spite of the lavish hand of Nature expenses in the wild regions of South America are far higher than they are in the East, where land has been cleared and each sapling patiently planted and tended.