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Inevitably Sāo Paulo's bonanza prosperity caused other Brazilian states to go in heavily for coffee planting, spurred by the lure of high prices created by Sāo Paulo's artificial restraint of trade. As these new plantations have come into production it has proved steadily harder to keep the price of coffee up. Pressure by the potent planters on the Brazilian Government forced the adoption of most dubious expedients by the state. These have included the buying and storing in State warehouses of Brazil's coffee surplus for a number of years, until today the Government of President Washington Luis is saddled with a stupendous hoard of coffee supposed to exceed 13 million bags —as much as an average year's crop.
Already the doubtful nature of this hoarded asset has caused a decline in the Brazilian currency—the milreis. Sooner or later the Government must unload. Recent crops have been bumper. Most observers believe that the Government cannot hold out, faces an eventual catastrophic coffee crash. Shrewdest coffeemen do not know when the crash will come, but last week's howling and hopping seemed of ominous significance.