All About Coffee, William H. Ukers [short story to read .txt] 📗
- Author: William H. Ukers
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This rule effectively stopped speculation, but failed to work out satisfactorily to the trade. Experience proved that a maximum fixed price at which coffee could be traded in would have produced much better results. Business on the Exchange followed its usual course, and the customary hedging of purchases was done by dealers. The indifference of buyers, already referred to, had resulted in a heavy decrease of the United States visible supply; and it had shrunk to 2,445,000 bags on September 1; to 2,173,098 bags on October 1; to 1,857,260 bags on November 1. Included in these amounts were at least 500,000 bags, held in New York by foreign owners, which could not be sold; and of the balance left, there was undoubtedly a liberal amount sold against on the Exchange for future delivery. By October, the situation had become acute. Dealers who had classified themselves as jobbers or importers had gone into the retail classification in order to evade the limitations of profit allowed jobbers, and were limiting their sales to lots of twenty-five bags or fewer. Dealers who had legitimately hedged their holdings were unable to buy in.
The Exchange officials showed no disposition to relieve the situation; and as all prices had reached the maximum price for every month permitted, the food administration, on November 1, 1918, ordered the liquidation of all contracts outstanding, bought or sold, by not later than November 9. This was done; and the coffee covered by such contracts was released to the trade.
The regulations governing transactions on the Exchange were withdrawn on December 5, 1918; and, after a long argument, the Exchange decided to re-open for trading on December 26, 1918. Opening transactions amounted to 25,000 bags on a basis of seventeen and one-half cents per pound or nine cents over the prices at which contracts had been liquidated. On December 28 the price had declined to fifteen and one-half cents. In the opinion of many of our best merchants, the Exchange should have been closed during the war, as it failed to be of any real service. That it was operating at a fixed price for the spot month only, made it of no value to the trade during this period. Of its loyalty to the government, and its evident desire to assist there can be no question; but its cheerful acceptance of the burdens laid upon it proved largely futile.
The action of the food administration in confining the coffee business solely to licensed dealers and to a fixed profit on actual cost; in limiting dealers to ninety days stock; and in prohibiting resales, was the cause of much unjust criticism. The regulations were based on the general rules of the food administration, and applied to coffee quite as equitably as did the regulations governing other food commodities under control and license. As a matter of fact, they were much less rigorous in some ways than the regulations applying to many other articles. For example, ninety days stock based on sales for 1916–17 was allowed on coffee. There was no other article on the food list to which this liberality was permitted. A forty to sixty days stock would probably be found to be the maximum permitted to be carried of other food products.
The general proclamation of the food administration of November 1, 1917, declared:
These general and special rules and regulations are promulgated by the President to accomplish three principal objects, viz: 1st, to limit the prices charged by every licensee "to a reasonable amount over expenses and forbid the acquisition of speculative profits from a rising market"; 2d, to keep all food commodities moving in as direct a line as possible and with as little delay as practicable to the consumer; 3d, to limit as far as practicable contracts for future delivery and dealing in future contracts.
From the foregoing it will be apparent that a profit to be allowed based on "market value" for coffees was an impossibility, unless this law had been altered to allow all licensees of other commodities to share. Coffee profits were fixed by the food administration on the advice of, and with acceptance by, the coffee committee. They started too low; and were made more liberal, when the first figures were shown to be impossible. George W. Lawrence reports a conversation that he had with the food administrator on this particular subject, and that was characteristic of his broadness. Mr. Hoover said, "The coffee dealers are complaining of the profits permitted them. I want them satisfied; and if the profits are not reasonable, I shall put them where they will be. This war is not going to last always; and at its conclusion I want every American merchant in a position to be able to continue his business and be no worse off than when the war started."
Resales were prohibited, or limited to one transaction, in order to prevent an accumulation of profits, that, added to each transfer, would result ultimately in higher prices to the consumer.
The fixing of profit based on cost, and not on market or replacement value, is a thing that is impossible in normal times. Carried to the last degree, it would mean ruination; for no provision is made for declines in the market, and resulting losses. As a war measure it was inevitable, and so endured. In normal times it is like trying to make water run uphill. With a united people, it worked; but one can not have a World War always to unite the people. It has been said that government regulation of coffees caused a large increase in price to the consumer. This would be hard to prove. The trade, generally, that refused to buy at ten to twelve cents per pound because it did not, or would not believe the reports of frost damage, and thought prices too high, was frantically bidding up to twenty and twenty-two cents for 4s in March and April, 1919. According to the ideas of some enthusiasts, fifty cents was not an impossibility. Naturally such a bubble must burst eventually. Government control had nothing to do with such natural conditions as frost, or as the buyers' indifference. Expansion and inflation were in the air, and had to run their course. The year 1920 brought the aftermath; and in the deflation, coffee, with all other commodities, went down to prices far below its intrinsic value. The expected European demand did not materialize; the interior buyer was overloaded with stock; and the losses of the coffee trade in 1920 will, it is to be hoped, never be repeated.
The Story of Soluble Coffee
For nearly two decades, many coffee men and chemists have been seeking a soluble coffee, or dried coffee extract, that would simplify the preparation of the beverage. Thus far, all the products that have appeared on the market are somewhat deficient in aroma and in the more delicate flavors of coffee. A satisfying average cup of coffee can be prepared from the better brands; the chief advantages of which are rapidity of preparation, absence of any grounds, and uniformity of drink.
Considerable progress has been made in certain directions; enough to warrant telling here, though briefly, the story of soluble coffee to date.
Some there are among trade experts and coffee connoisseurs who maintain soluble coffee is an ignis fatuus; that it can never be manufactured without destroying the aromatic principle; that at best it is a delusion and a snare. Certainly, many absurd claims have been made for some of the soluble coffees on the market. However, there are others that are not without their merits; and the story of their introduction to the trade and the consuming public is entertaining and instructive.
Dr. Sartori Kato, a Japanese chemist, of Tokio, brought a soluble tea to Chicago about 1899. It was not a commercial success; but it served to bring him in touch with some coffee men and chemists, for whom he produced a soluble coffee in the same year. A company was organized to promote the product. It was called the Kato Coffee Co., and included, in addition to Dr. Kato; Fillip Kreissel, a chemist; W.R. Ruffner, a green-coffee broker; and I.D. Richheimer, a coffee roaster. Kato's soluble coffee was first sold to the public at the Pan-American Exposition in 1901. The first quantity order was received from Captain Baldwin and by him used with satisfaction on the Ziegler Arctic expedition. United States patents on a coffee concentrate, and process for making the same (soluble coffee), were granted to Sartori Kato of Chicago, assignor to the Kato Coffee Co., of the same place, on August 11, 1903.
G. Washington, who was born in Belgium of English parents, and who was living temporarily in Guatemala City, invented about 1906, a soluble coffee that was made ready for the market in 1909.
The George Washington Coffee Refining Co. was organized in 1910 to put the Washington product on the market, which it did first under the name, Red E coffee. This was later changed to G. Washington's Prepared Coffee, as an alternative to Washington's Coffee Extract, a name which was favorably regarded by all except certain authorities at the national capital. Associated with Mr. Washington at the start of the enterprise were: E. Van Etten, former vice-president of the New York Central Railroad; W.J. Arkell; Bartlett Arkell, of the Beechnut Packing Co.; C.M. Warner, of the Warner Sugar Refining Co.; and Charles E. Proctor, of the Singer Sewing Machine Co.
The G. Washington Coffee Refining Company has its coffee-roasting and preparing plant in Brooklyn; but its process is a secret one, and has never been patented.
F. Lehnhoff Wyld, who was the Washingtons' family physician when they lived in Guatemala City, and with whom Mr. Washington had discussed his work in soluble coffee, duplicated the Washington product in 1913; and, with E.T. Cabarrus, he organized the Société du Café Soluble Belna, Brussels, Belgium, to put on the European market a refined soluble coffee under the brand name Belna.
Eight or ten United States patents have been granted on soluble coffees that have never been applied commercially.
Nowhere has soluble coffee met with such success as in the United States, where a number of brands followed the Kato and G. Washington products. Among them, mention should be made of the C.F. Blanke Tea & Coffee Company's Magic Cup, afterward Fairy Cup, and later, Faust brand, brought out in 1912; the Baker Importing Co.'s Barrington Hall Soluble Coffee, brought out in 1917; and the Charles G. Hires Co.'s brand, introduced to the trade in 1918.
It was the World War that brought soluble coffee to the front. E.F. Holbrook, formerly in charge of the coffee section, subsistence division, United States War Department, said, "The use of mustard gas by the Germans made it one of the most important articles of subsistence used by the army." Early in the war, soluble coffee was added to the reserve ration, three-quarters of an ounce being considered at first the proper amount per ration. After trying to put it up in sticks, tablets, capsules, and other forms, it was determined that the best method was to pack it in envelopes. A month before the signing of the armistice, the New York depot was notified that after January 1, 1919, the requirements of soluble coffee were to be 25,000 pounds per day in addition to quantities packed in reserve rations, bringing the total daily output to 42,500 pounds per day. Arrangements were made to have the total output
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