Uncommon Grounds Part 10

PART THREE.

BITTER BREWS.

In this postwar diner, waitresses served up bottomless cups of weak coffee.

13.

Coffee Witch Hunts and Instant Nongratification Over second and third cups flow matters of high finance, high state, common gossip and low comedy. [Coffee] is a social binder, a warmer of tongues, a soberer of minds, a stimulant of wit, a foiler of sleep if you want it so. From roadside mugs to the cla.s.sic demi-ta.s.se, it is the perfect democrat.

-New York Times, November 14, 1949

There's every sign that coffee will remain the country's leading beverage forever.

-1952 Coffee Annual Coffee Annual

By the end of World War II, American coffee had become a standardized product, a roasted ground blend, based largely on average Brazilian beans. All coffee tasted pretty much the same. Despite the much-touted virtues of vacuum cans, the preground coffee gradually staled while sitting on the shelf. As the food writer M. F. K. Fisher wrote in 1945, "It comes in uniform jars, which we buy loyally according to which radio program hires the best writers, so that whether the label is green or scarlet the contents are safely alike, safely middling." And though the drip method was gaining in popularity, Americans came out of the war drinking weak, overextracted percolator coffee. "Our national taste," wrote one coffee lover, "is still for pallid, grounds-specked, boiled slops."

From this state of mediocrity coffee went from "safely middling" to awful within the next two decades. What happened? A confluence of economic, political, and technological factors joined to produce the bitter cup.

Guy Gillette's Coffee Witch Hunt Coffee prices climbed slowly but steadily after they were finally freed from price controls in 1946. By 1947 roasted coffee retailed for more than 50 cents a pound. The next year, when many restaurants began charging 7 cents a cup instead of a nickel, angry patrons broke mugs, stole silverware, and dumped cream and sugar on countertops in protest. Some coffee firms began to advertise that their their brand required less grounds to brew a strong cup. One coffee man concluded facetiously that if prices continued to rise, "we may yet see coffee so strong you won't have to use any at all to get a delicious aromatic, flavorsome cup." brand required less grounds to brew a strong cup. One coffee man concluded facetiously that if prices continued to rise, "we may yet see coffee so strong you won't have to use any at all to get a delicious aromatic, flavorsome cup."

The price rise stemmed primarily from legitimate free-market forces of supply and demand. Brazil found itself without enough beans. The once-fertile So Paulo soil had lost its nutrients to coffee production, and the weakened trees were suffering from a broca broca (coffee bug) infestation. From its all-time high of 19.8 pounds just after the war, U.S. per-capita consumption fell slightly to 18.2 pounds in 1948, while European imports topped 7 million bags, aided by the Marshall Plan-still below the prewar 12 million-bag level, but significant and growing. To keep consumption up, the coffee growers boosted their self-imposed advertising tax from 2 cents to 10 cents to support the Pan American Coffee Bureau. Adventurous homesteaders, eager to capitalize on the pending coffee shortage, began to carve new (coffee bug) infestation. From its all-time high of 19.8 pounds just after the war, U.S. per-capita consumption fell slightly to 18.2 pounds in 1948, while European imports topped 7 million bags, aided by the Marshall Plan-still below the prewar 12 million-bag level, but significant and growing. To keep consumption up, the coffee growers boosted their self-imposed advertising tax from 2 cents to 10 cents to support the Pan American Coffee Bureau. Adventurous homesteaders, eager to capitalize on the pending coffee shortage, began to carve new fazendas fazendas out of the forest farther south in the Brazilian state of Parana, but those new trees would take five years to begin producing. out of the forest farther south in the Brazilian state of Parana, but those new trees would take five years to begin producing.

In 1944 the Brazilians with great fanfare had donated 400,000 bags of green Santos beans to the U.S. military. Two years later the U.S. Army turned over 500,000 bags of "surplus" Brazilian coffee, along with 200,000 bags of Colombian beans, to the U.S. Department of Agriculture, which in turn sold them for an estimated $6 million profit. The Brazilian growers were infuriated. In 1948 the United States allowed the Inter-American Coffee Agreement to expire, and the group's advisory capacity was transferred to a toothless Special Commission on Coffee under the auspices of the Organization of American States.

By fall 1949 Brazil's surplus ran out just as a prolonged drought damaged the year's flowering in August and September. By October 19 green bean prices had crept up to 34 cents. Then prices rocketed to 51 cents a pound by mid-November. Roasters boosted prices to around 80 cents a pound. At restaurants the nickel cup of coffee yielded to the dime. For the first time in history, world coffee imports cost over $1 billion.

Senator Guy Gillette, an Iowa Democrat and dairy farmer, directed his agricultural subcommittee to investigate coffee prices. Gillette stormed against the "manipulators" and "speculators" he held responsible for raising the price of coffee. His counsel, Paul Hadlick, interrogated witnesses with all the hostility of a murder prosecutor. Why had the price of coffee jumped so enormously in so short a time? "Could you explain," Hadlick asked a General Foods representative, "why large Brazilian interests were buying coffee in New York?"

Speculative interests had had helped to drive up the price, but a shortage of coffee was the fundamental reason for the price increase. Congressional witness Andres Uribe, the New York representative of Colombia's National Federation of Coffee Growers and chairman of the Pan American Coffee Bureau, explained the sudden price rise as a result of the "complacency" of the American trade, which never believed that the Brazilian stocks would run out. When they suddenly realized that the 1949 drought was real and that there were no surplus stocks, they panicked and began to buy. This resulted in a cla.s.sic bull-market run for coffee, and as prices shot up, housewives began h.o.a.rding, creating an artificial scarcity. helped to drive up the price, but a shortage of coffee was the fundamental reason for the price increase. Congressional witness Andres Uribe, the New York representative of Colombia's National Federation of Coffee Growers and chairman of the Pan American Coffee Bureau, explained the sudden price rise as a result of the "complacency" of the American trade, which never believed that the Brazilian stocks would run out. When they suddenly realized that the 1949 drought was real and that there were no surplus stocks, they panicked and began to buy. This resulted in a cla.s.sic bull-market run for coffee, and as prices shot up, housewives began h.o.a.rding, creating an artificial scarcity.

"Latin Americans generally have been profoundly disturbed-even shocked," Uribe told the committee, "that the national integrity of their countries has been impugned; that they have been accused of gouging; of defrauding the American consumer; of engaging in plots and cabals." He pointed out that while U.S. consumers had paid over $2 billion for roasted or brewed coffee in 1949, only 38 percent of that money had gone to the Latin American producing countries. The majority of the profits had been taken by U.S. roasters, retailers, and restaurants.

"Gentlemen," Uribe said, "when you are dealing with coffee, you are not dealing only with a commodity, a convenience. You are dealing with the lives of millions of people." He paused for emphasis. "We in Latin America have a task before us which is staggering to the imagination-illiteracy to be eliminated, disease to be wiped out, good health to be restored, a sound program of nutrition to be worked out for millions of people. The key to all of this . . . is an equitable price for coffee." Otherwise, he warned, "you cast these millions of persons loose to drift in a perilous sea of poverty and privation, subject to every chilling wind, every subversive blast."79 His plea fell on deaf ears. On June 9, 1950, the Gillette Committee issued its official report, a scathing doc.u.ment so offensive that fourteen Latin American countries lodged an official protest. The American politicians blamed the shortage on Brazilian growers, whom they accused of withholding huge stocks. Gillette suggested that the U.S. government "scrutinize most carefully" any loans to coffee countries, while encouraging coffee growth outside Latin America. The report not only recommended sweeping alterations in established methods of the U.S. coffee trade, but also told Brazil and Colombia that they should change their monetary exchange rates. No further coffee should be purchased through the Marshall Plan, and furthermore, a U.S. Justice Department representative should attend future meetings of the Special Commission on Coffee-as if it needed legal watchd.o.g.g.i.ng.

If the report's recommendations were implemented, it would be "tantamount to the bankruptcy of the coffee producing industry," said the Brazilian delegate to the Special Commission. A Rio newspaper called the report "a model of indelicacy, intimidation and revolting brutality." Colombia's foreign minister denounced the report as "an unwarranted act of interference" and "a tremendous blow to the Good Neighbor policy." In the midst of this outrage, former dictator Getulio Vargas made a stunning populist comeback and was elected Brazil's president later in the year, with a pledge to guarantee a minimum price to coffee growers and to strengthen rather than devalue the Brazilian cruzeiro cruzeiro.80 Trying to make amends, a.s.sistant Secretary of State Edward G. Miller Jr. scolded the full Agriculture Committee for not pa.s.sing the report by the State Department before publication. He said that "no accusations of manipulation of markets, or collusion between producing interests, should be made unless and until there is clear evidence to substantiate such charges." Indeed there was no such evidence. He criticized the report's recommendations, noting that "little or no [background] information" supported them. Reluctantly, Gillette's committee revised the report, softening the tone and moderating its harsh recommendations. International feelings were temporarily soothed, just as the conflict in Korea intensified the new cold war mentality and boosted the price of coffee once again to around 85 cents per pound retail.

Instant, Quick, Efficient, Modern-and Awful The instant-coffee industry grew tremendously in the postwar period. At first Nescafe dominated sales in the United States through extensive advertising. The internationally powerful Swiss company also introduced its instant brand around the world in Europe, Latin America, Asia, Oceania, and South Africa.

The United States, however, provided the largest potential market. The modern consumer willingly sacrificed quality for convenience, as new instant brands proliferated. When regular roasted coffee b.u.mped up to 80 cents a pound in 1950, the real rush toward instant was on. Although soluble coffee required a gigantic capital outlay for the tall spraying towers and additional treatment processes, it cost 1.25 cents per cup, 1 cent less less than regular. than regular.

The taste of instant coffee was so poor that it didn't much matter what kind of beans were used-including cheap robusta beans from African colonies eager for dollar infusions to their war-devastated economies. In addition, the manufacturers could squeeze more solids out of each bean by overextracting the grounds-a process that produced a bitter regular brew.

By the end of 1952, instant coffee accounted for 17 percent of all U.S. coffee consumption. Instant Maxwell House and Nescafe each were spending over $1 million a year on advertising. "AMAZING COFFEE DISCOVERY!" proclaimed Instant Maxwell House ads. "Not a powder! Not a grind! But millions of tiny 'FLAVOR BUDS' of real real coffee, ready to burst instantly into that famous coffee, ready to burst instantly into that famous GOOD-TO-THE-LAST-DROP GOOD-TO-THE-LAST-DROP flavor!" "Easy to Vary the Strength to Suit Everyone in the Family," Nescafe ads explained. "No Fussing with Pot or Percolator. No Tricky Parts to Clean. No Coffee Grounds." The pedestrian ads of the Swiss company failed to capture the imagination of the consumer, and in 1953 Instant Maxwell House jumped past Nescafe to become the undisputed leader in U.S. instant coffee sales. It held that position tenuously, however, through low prices and extensive advertising. Consumer surveys showed little brand loyalty for instant coffees. flavor!" "Easy to Vary the Strength to Suit Everyone in the Family," Nescafe ads explained. "No Fussing with Pot or Percolator. No Tricky Parts to Clean. No Coffee Grounds." The pedestrian ads of the Swiss company failed to capture the imagination of the consumer, and in 1953 Instant Maxwell House jumped past Nescafe to become the undisputed leader in U.S. instant coffee sales. It held that position tenuously, however, through low prices and extensive advertising. Consumer surveys showed little brand loyalty for instant coffees.

To raise the enormous capital needed to produce instant coffee ($1 million per plant), ten smaller roasters led by Joseph Martinson & Company (formerly noted for its high-quality coffee) banded together to form Tenco, a New Jersey cooperative that ran twenty-four hours a day to produce soluble coffee. Ed Aborn Jr., who like his father before him had championed proper brewing methods, shocked members of the trade by selling the venerable family firm and joining Tenco. Berent Friele, who had dominated the coffee trade as head of A & P's American Coffee Corporation, convinced Nelson Rockefeller to invest in Tenco.

The popularity of instant coffee accompanied and complemented the rise of the vending machine. In 1947 Lloyd Rudd and K. C. Melikian, two army mechanical engineers, introduced the Kwik Kafe vending machine that dispensed hot instant coffee into a paper cup in five seconds. Rudd Melikian Inc. sold three hundred machines the first year. Other companies soon went into compet.i.tion with them. By the end of 1951 there were over 9,000 coffee vending machines in the United States, and by the middle of the decade over 60,000.

Invention of the Coffee Break The vending machine helped inst.i.tutionalize that most venerated American tradition, the coffee break. The phrase was the 1952 invention of the Pan American Coffee Bureau. Supported by its $2 million a year budget, the bureau launched a radio, newspaper, and magazine campaign with the theme "Give Yourself a Coffee-Break-And Get What Coffee Gives to You." The practice had begun during the war in defense plants, when time off for coffee gave workers a moment of relaxation along with a caffeine jolt.

While work time off for coffee had been virtually unknown before the war, 80 percent of the firms polled in 1952 had introduced a coffee break. Hospitals inst.i.tuted them. After Sunday wors.h.i.+p services, congregations met for a coffee break with their pastors. The coffee bureau launched a "Coffee Stop" campaign on the nation's roads to encourage motorists to pull over every two hours for coffee as a safety measure.

Even General Dwight Eisenhower's presidential campaign got into the act, using the coffee break idea for its Operation Coffee Cup, in which a "coffee party" introduced Ike to voters "on a cheerful, intimate basis." As Look Look magazine noted, the coffee social trend was spreading. "Coffee and dessert boost attendance at town meetings; coffee parties raise funds for a symphony orchestra; coffees join teas as vehicles for parent-teacher conferences, spurred by the ease of serving instant coffee to large groups." Now they didn't have to bother with messy cream or milk. Instant Pream, a powdered milk product, provided the perfect tasteless mate to instant coffee. "No Waste, No Fuss," its ads proclaimed. magazine noted, the coffee social trend was spreading. "Coffee and dessert boost attendance at town meetings; coffee parties raise funds for a symphony orchestra; coffees join teas as vehicles for parent-teacher conferences, spurred by the ease of serving instant coffee to large groups." Now they didn't have to bother with messy cream or milk. Instant Pream, a powdered milk product, provided the perfect tasteless mate to instant coffee. "No Waste, No Fuss," its ads proclaimed.

The b.o.o.b Tube Along with instant coffee and cream came instant entertainment. Though television had made its shaky debut just before the Depression, the new medium didn't become commercially viable until after World War II. By 1952 TV reached 37 percent of the country's living rooms. By the end of the decade virtually everyone in America watched television an average of six hours a day.

General Foods, which employed over 15,000 people and garnered over $500 million in gross annual sales by the late forties, was one of the earliest television advertisers, pushed by Atherton "Hobe" Hobler, still in charge at Benton & Bowles. Hobler, who had seen what radio did for Maxwell House, was sure television, with sound and and sight, would have an even greater impact. He convinced General Foods advertising manager Charles Mortimer, who was soon to a.s.sume the presidency of the food conglomerate. sight, would have an even greater impact. He convinced General Foods advertising manager Charles Mortimer, who was soon to a.s.sume the presidency of the food conglomerate.

In 1947 Maxwell House Coffee sponsored Meet the Press Meet the Press in a changeover from radio to television. To advertise Sanka decaffeinated coffee, General Foods sponsored a radio and TV version of in a changeover from radio to television. To advertise Sanka decaffeinated coffee, General Foods sponsored a radio and TV version of The Goldbergs The Goldbergs, starring Gertrude Berg. Mrs. Goldberg and her clan provided an affectionate look at New York Jewish immigrant life in one of the first popular situation comedies. Looking out the window, Berg explained to the television audience that they could drink as much Sanka as they liked "because the sleep is left in."

A 1950 survey of 4,300 television owners showed that TV had a "far stronger effect on food sales than any other commodity." That same year Coca-Cola paid for a special with Edgar Bergen and Charlie McCarthy, who had defected from Chase & Sanborn to the soft drink. c.o.ke also sponsored a Walt Disney program, and in 1951, The Adventures of Kit Carson The Adventures of Kit Carson.

General Foods responded with Mama Mama, starring Peggy Wood, based on the popular Broadway play I Remember Mama I Remember Mama. At the end of each weekly show, the cast gathered in Mama's kitchen for a cup of Maxwell House Coffee. That const.i.tuted the show's only commercial, which became an integral part of the program. Mama Mama ran for eight years, until videotape brought an end to live television drama. ran for eight years, until videotape brought an end to live television drama.

In 1953 General Foods added December Bride December Bride, starring Spring Byington, to its lineup of Maxwell House-sponsored shows. When Nestle ran TV spots offering free samples of Nescafe, more than 2 million consumers responded over an eighteen-month period.

The ailing Standard Brands couldn't afford extravagant television advertising, dooming it to a small market share. In comparison to General Foods' $27 million net profit in 1949, Standard Brands earned only $8 million. Maxwell House poured $2.5 million a year into advertising, while Chase & Sanborn spent just over $1 million.

The J. Walter Thompson admen were hamstrung not only by an inadequate budget but by Don Stetler, the shortsighted Standard Brands ad manager, who believed that coffee was strictly a local business. He canceled the Charlie McCarthy radio show and refused to run color ads in national magazines. In 1949 new president Joel S. Mitch.e.l.l, a former Kellogg's executive, took over and promptly fired the J. Walter Thompson agency, but a new ad agency didn't help.

Hills Brothers also tried television in the early 1950s, with a blond woman in an evening dress preparing coffee for guests in her kitchen. To schmaltzy music a female voice sang about Hills Brothers, "the friendliest of blends." Another commercial showed a stiff teenage couple. The boy, sporting a bow tie, opens a can of Hills Brothers and the girl smells it while the announcer intones: "Boy meets girl, girl makes coffee. Hills Brothers Coffee, of course." The boy picks up a tray and offers it to others sitting in the living room. "Hills Brothers Coffee, the life of the party." Even in 1951 such ads must have been perceived as fake and forced.

The Hills Brothers TV spots only ran in local markets. So far General Foods was the only coffee roaster with the funds and foresight to produce national television commercials. In addition to Mama Mama and and The Goldbergs The Goldbergs, General Foods sponsored Captain Video and His Video Rangers Captain Video and His Video Rangers, starring Al Hodge, who had been the superhero Green Hornet on radio. Atherton Hobler eventually convinced General Foods to devote 80 percent of its advertising budget to television.

Price Wars, Coupons, and Fourteen-Ounce Pounds Due to high prices and the increasing popularity of instant coffee, roasters felt compelled to cheapen their brands, use price promotions, premiums, and money-back coupons, and cut quant.i.ty. Some regional roasters who supplied the restaurants and inst.i.tutions began to sell coffee in fourteen-ounce packages, claiming that their coffee produced the same results as a full pound. On its hundredth anniversary, Folger's advertised that consumers could use "one quarter less" of its blend because it was in some way richer. While one roaster denounced this trend as "disastrous," he admitted that he too had succ.u.mbed. The result? They were all selling less coffee, and the consuming public was getting a diluted cup.

In Europe economizing on coffee wasn't so much a matter of choice as necessity. By 1952 the French were importing 2.6 million bags of coffee, but over half were low-quality robusta beans from French colonies in Africa. As a result, France's coffee, never known for its high quality, got worse. European home roasting declined as industrial roasters dominated the market. Still, most Italians bought whole-bean roasted coffee and ground it at home. Italian advertising promised "Paradise . . . in the cup," but the blend consisted primarily of cheap Brazils and African robustas.

Neglecting a Generation Even in dest.i.tute postwar Europe, a different American beverage was gaining popularity and stealing market share from coffee. On May 15, 1950, Time Time magazine's cover featured a painting in which a smiling red Coca-Cola disk with a skinny arm held a c.o.ke bottle to the mouth of a thirsty globe. The legend beneath read "WORLD & FRIEND-Love that piaster, that lira, that tickey, and that American way of life." The editor of the National Coffee a.s.sociation newsletter advised that the magazine's cover featured a painting in which a smiling red Coca-Cola disk with a skinny arm held a c.o.ke bottle to the mouth of a thirsty globe. The legend beneath read "WORLD & FRIEND-Love that piaster, that lira, that tickey, and that American way of life." The editor of the National Coffee a.s.sociation newsletter advised that the Time Time c.o.ke article should be "required reading" for coffee men. He pointed out that a bottle of Coca-Cola cost over twice as much as a home-brewed cup of coffee. Yet soft drink sales were booming. Could coffee take a lesson from this carbonated caffeine delivery system? c.o.ke article should be "required reading" for coffee men. He pointed out that a bottle of Coca-Cola cost over twice as much as a home-brewed cup of coffee. Yet soft drink sales were booming. Could coffee take a lesson from this carbonated caffeine delivery system?

A few months later, however, the same editor wrote: "The coffee trade of the United States has never been interested in this group [under 15] as a market . . . because too many parents would prefer their children's beverage consumption to supplement their diet." While coffee men were busy cutting prices and one another's throats, diluting their beverage, and advertising coffee as a commodity, c.o.ke and Pepsi were successfully promoting an image of youth, vitality, and as Time Time noted, the "American way of life." noted, the "American way of life."

In 1950 U.S. coffee per-capita consumption began to fall, as soft drink popularity rose.81 That year the soft drink firms first reached parity with coffee in their advertising budgets: both beverages spent just over $7 million a year. But only two firms, c.o.ke and Pepsi, dominated the fizzy drink industry, while coffee firms battled one another for their slowly dwindling share of the market. In 1953 tousle-haired, twenty-four-year-old crooner Eddie Fisher appeared in That year the soft drink firms first reached parity with coffee in their advertising budgets: both beverages spent just over $7 million a year. But only two firms, c.o.ke and Pepsi, dominated the fizzy drink industry, while coffee firms battled one another for their slowly dwindling share of the market. In 1953 tousle-haired, twenty-four-year-old crooner Eddie Fisher appeared in c.o.ke Time c.o.ke Time on TV and radio. Meanwhile, most coffee ads featured harried housewives or hurried businessmen. on TV and radio. Meanwhile, most coffee ads featured harried housewives or hurried businessmen.

The Land That Smelled Like Money High coffee prices had sp.a.w.ned a worldwide resurgence of coffee growing. "New coffee trees are being planted in almost every producing country in the world," observed George Gordon Paton, the editor of Coffee Annual Coffee Annual, at the end of 1950. "Will the world be ready to take this additional production?"

In the Highlands of Papua New Guinea, Australian Jim Leahy harvested his first coffee in 1952. While prospecting for gold in 1933, he and his two brothers, Mick and Dan, found not only gold, but a million New Guinea natives previously unknown to the outside world. Mick Leahy fathered Joe, a mixed-race child whom he abandoned when he returned to Australia, but Jim and Dan stayed on.82 After the war Jim experimented with a small plot of coffee in the Highlands, where conditions turned out to be perfect for high-quality arabica beans. His first big harvest came in just as prices skyrocketed, and a New Guinea land rush commenced. By 1955 there were seventy-six coffee plantations in New Guinea, fifty-five of them owned by Europeans. Astonished by the wealth they saw around them, natives too began to plant small plots. After the war Jim experimented with a small plot of coffee in the Highlands, where conditions turned out to be perfect for high-quality arabica beans. His first big harvest came in just as prices skyrocketed, and a New Guinea land rush commenced. By 1955 there were seventy-six coffee plantations in New Guinea, fifty-five of them owned by Europeans. Astonished by the wealth they saw around them, natives too began to plant small plots.

In Brazil a new speculative frenzy took hold. "In Parana," other Brazilians observed with a shake of the head, "the craziness of the people is tremendous." Swindlers sold nonexistent or useless land to eager but unwary jacus jacus, yokels who had rushed to Parana to make their fortunes growing coffee.83 In the six years since the U.S. Office of Price Administration had freed coffee prices, over 500,000 settlers had descended on Parana. In the six years since the U.S. Office of Price Administration had freed coffee prices, over 500,000 settlers had descended on Parana.

In 1952 the American journalist Harold Martin flew to the frontier state of Parana to research an article aptly t.i.tled "The Land That Smells Like Money." "Over Londrina and beyond it for 100 miles a dry fog hangs in the air so thickly that at times it obscures both the noonday sun and the earth beneath," Martin wrote. The destruction of Brazil's forests continued apace in the grand old tradition of slash-and-burn. Towns of 15,000 people sprang up in areas that only a few years earlier had provided homes for jaguars, tapirs, monkeys, snakes, and parakeets.

The Parana lands produced up to five times more coffee per acre than the tired So Paulo soils. The rich rolling plateau, well-watered and 2,000 feet above sea level, appeared to provide near-perfect coffee growing conditions, though periodic frosts posed a significant threat. No one worried about that in 1952, however. The first wave of coffee trees, planted five or six years earlier, were being harvested, and millions more had been planted in the new lands.

The United States encouraged the establishment of experimental agricultural research stations in Latin America. For the first time, scientific a.n.a.lysis of the soil and other methods applied for over a decade to U.S. corn, wheat, and fruit trees were suggested for coffee. Dr. William Cowgill, an agronomist with the U.S. Department of Agriculture, worked in Guatemala and traveled as a consultant throughout Central America, Colombia, Ecuador, and Peru.

In 1950 Cowgill coaxed one of his prize coffee trees to produce an astonis.h.i.+ng fourteen pounds of cherries, compared to the average one pound per tree. The specialist said that most coffee planters simply followed tradition and didn't know what they were doing. Cowgill suggested eliminating shade trees, increasing fertilizer and pesticide applications, and planting coffee trees much closer together.

Coffee research stations also had begun in Colombia, Costa Rica, and Brazil, where Latin American scientists were studying crossbreeding to create hybrid strains as well as studying plant diseases and pests. The most promising Brazilian discovery, named Mundo Novo Mundo Novo, was "found" rather than intentionally crossbred. A traditional arabica tree, it proved somewhat resistant to disease, matured in three rather than four years, and produced abundantly.

The Rockefellers threw the weight of their money into such ventures, determined to secure a place for U.S. business in Latin America. Nelson Rockefeller founded the International Basic Economy Corporation (IBEC) after the war and in November 1950 created the IBEC Research Inst.i.tute (IRI). The following year young plant scientist Jerry Harrington moved to So Paulo, intent on discovering a cure for the decline in coffee production there. The IRI men brought the yields up somewhat, but something was missing. The trees still lacked the color and vigor of trees growing on the virgin soil of Parana.

The Great Fourth of July Frost As the cherries ripened on those vigorous young Parana trees in June 1953 during Brazil's winter, it appeared that the world would finally have a b.u.mper crop. For seven previous years, world production had lagged behind consumption. In March, President Eisenhower lifted the coffee price ceiling imposed by the Korean War and the selling price edged up a few cents. U.S. coffee men hoped that a substantial crop finally would allow a price decline.

On the night of July 4, an unusually cold air ma.s.s moved up from the Antarctic and fell on southern Brazil. By noon the next day, many trees had been killed outright by the severe frost. In other cases the leaves had withered and the beans blackened on the branches. As it became apparent that the Brazilian harvest was several million bags short of predictions and that the following year promised a poor harvest as well, coffee futures ratcheted up.

In January 1954 roasted coffee broke the crucial psychological barrier of $1 a pound. Once again housewives, politicians, and the media turned accusatory. U.S. News & World Report U.S. News & World Report noted that consumers wondered "why, when many kinds of farm products are going down in price, coffee prices are the highest in history and are shooting up further." Restaurants that had raised prices from a nickel a cup to 10 cents during the last crisis now boosted it to 15 cents or even a quarter. Coffee consumption in New York City dropped 50 percent in a few weeks. Movements for "coffee holidays" sprang up across the country. noted that consumers wondered "why, when many kinds of farm products are going down in price, coffee prices are the highest in history and are shooting up further." Restaurants that had raised prices from a nickel a cup to 10 cents during the last crisis now boosted it to 15 cents or even a quarter. Coffee consumption in New York City dropped 50 percent in a few weeks. Movements for "coffee holidays" sprang up across the country.

Postum sales soared, instant coffee thrived, and chain stores began using coffee as a loss leader. A newspaper offered a pound of free coffee with each new subscription to raise readers.h.i.+p, while a used car dealer with a sense of humor offered a free car with each package of $600-a-pound coffee.

President Eisenhower ordered the Federal Trade Commission to investigate coffee prices. In February the U.S. House of Representatives commenced coffee hearings, while the Senate a.s.signed two two committees to look into the matter. Maine senator Margaret Chase Smith submitted a resolution suggesting that Communists must be behind the coffee price hike. She wanted to ban coffee imports from Guatemala, where, she a.s.serted, "the Communist movement has gained such economic and political strength." committees to look into the matter. Maine senator Margaret Chase Smith submitted a resolution suggesting that Communists must be behind the coffee price hike. She wanted to ban coffee imports from Guatemala, where, she a.s.serted, "the Communist movement has gained such economic and political strength."

Gustavo Lobo, the new head of the New York Coffee and Sugar Exchange, defended himself in front of several committees. "Today," he told Senator George Aiken's committee, "the very mention of the word 'coffee' is quite likely to bring about irrelevant discussions, hasty conclusions, and ill-considered action." The exchange did not set prices, he explained. It only recorded them. Yes, there was speculation, but that was a necessary function of any commodity exchange. Lobo denied that anyone was reaping enormous profits from coffee. Veteran coffee brokers Chandler Mackay, Leon Israel, and Jack Aron agreed with Lobo. "I would say the jobber [wholesaler] tries to get 1 percent [profit]," Israel testified, "and is happy to get one-half of 1 percent." The politicians remained skeptical. By summer, roasted coffee had risen to $1.35 a pound.

In Newsweek Newsweek Henry Hazlitt noted that congressmen were happy enough to enjoy their 75-cent martinis and to seek ever higher b.u.t.ter prices by holding 264 million pounds off the market. "Could it be that this strange contrast has anything to do with the fact that coffee growers don't vote in [their] district, while dairy farmers do?" A Henry Hazlitt noted that congressmen were happy enough to enjoy their 75-cent martinis and to seek ever higher b.u.t.ter prices by holding 264 million pounds off the market. "Could it be that this strange contrast has anything to do with the fact that coffee growers don't vote in [their] district, while dairy farmers do?" A Christian Century Christian Century editorial added, "Americans who grumble may . . . begin to understand how our own agricultural policies look to poor and hungry people in the rest of the world." These voices of reason were lost, however, in the screams of outrage over purported manipulation and speculation. editorial added, "Americans who grumble may . . . begin to understand how our own agricultural policies look to poor and hungry people in the rest of the world." These voices of reason were lost, however, in the screams of outrage over purported manipulation and speculation.

In Costa Rica President Jose Figueres noted that even in that coffee-growing country, domestic coffee cost 90 cents a pound, while the average citizen's income was a tenth of his U.S. counterpart. The Brazilian government flew four U.S. housewives down to Parana to see the frost damage. In March their pictures among the Parana coffee groves appeared in the American media. There they were, dressed in middle-cla.s.s fifties dresses, surrounding a very spindly, very dead coffee tree. The ladies were impressed with the destruction and promised to report back favorably to American housewives. "We are going to keep our friends.h.i.+p, and it is not going to dissolve in a cup of coffee." The FTC and congressional committees continued their investigations, determined to blame someone someone for high prices. for high prices.84 A CIA Coup in Guatemala After the 1944 overthrow of Guatemalan dictator Ubico, new president Juan Jose Arevalo finally abolished "vagrancy" laws and other forms of forced labor, and the state a.s.sumed owners.h.i.+p of the coffee plantations that had been expropriated from Germans during the war. Arevalo had not attempted any agrarian reform, however, even though plantations larger than 1,100 acres-accounting for only 0.3 percent of the number of farms-contained over half the country's farmland.

When former general Jacobo Arbenz Guzman a.s.sumed the presidency in 1951, he vowed to transform Guatemala "from a dependent nation with a semi-colonial economy into an economically independent country." The following year Guatemala pa.s.sed the Law of Agrarian Reform, which called for the redistribution of public lands, those not actively farmed by the owner, and property in excess of 90 hectares (222 acres). Those forced to sell land would be recompensed based on tax a.s.sessments. The Arbenz government began to hand over more than one hundred former German coffee plantations to peasant cooperatives. The United Fruit Company was the hardest-hit foreign corporation, since much of its potential banana land lay fallow.85 Its land also had been undervalued to avoid taxation, so that the company was forced to sell land far below its fair market value. Its land also had been undervalued to avoid taxation, so that the company was forced to sell land far below its fair market value.

In 1954 land-hungry peasants began to occupy coffee plantations illegally, with some Guatemalan Communists encouraging them. "The land reform program has practically been taken over by communist agitators who exhort peasants to 'invade' private property," the Tea & Coffee Trade Journal Tea & Coffee Trade Journal reported. "Owners have no recourse and objections only bring threats of fines and imprisonment on the grounds that they are 'hindering the land reform program.'" The writer concluded that "if the present trend continues, the days of large privately owned and operated coffee Fincas are numbered." reported. "Owners have no recourse and objections only bring threats of fines and imprisonment on the grounds that they are 'hindering the land reform program.'" The writer concluded that "if the present trend continues, the days of large privately owned and operated coffee Fincas are numbered."

As a private lawyer, the new Secretary of State John Foster Dulles had represented the United Fruit Company. His brother, Allen Dulles, the head of the CIA, had served on the United Fruit board of directors for several years. Even more than concern for the banana company, however, the United States perceived Arbenz as a threat to American influence in Latin America. Communism provided a convenient excuse to attack radical nationalist regimes. In August 1953 they convinced President Eisenhower to approve Operation Success, a clandestine CIA plan to overthrow the Arbenz regime. They installed right-wing diplomat John Peurifoy as the U.S. amba.s.sador to Guatemala, and they planned to ram a resolution through the Caracas Organization of American States (OAS) meeting that would justify their planned intervention. This task would have been much easier if the coffee price crisis had not soured relations with Latin America, as journalist Patrick McMahon noted. He believed that the furor over coffee was "the greatest piece of sheer good luck that has fallen to the Communists since they opened their campaign to gain a firm foothold in the Western Hemisphere."

Like McMahon, most U.S. journalists accepted the cold war ideology that the Guatemalan government was communistic. In fact there were only four Communist deputies in the 1953-1954 Guatemalan Congress, and Arbenz never appointed a Communist to his cabinet. True, the Communists did support his regime and even exerted considerable influence, but Arbenz was a nationalist who sought long-overdue reforms, not an ideological Communist. "What is the real reason for describing our government as communistic?" asked Guillermo Toriello, Guatemala's foreign minister, on March 5 at the OAS meeting. "Why do they wish to intervene in Guatemala?" The answer, he said, was obvious. The Arbenz policy was adversely affecting "the privileges of foreign enterprises" such as United Fruit.

Though Toriello's speech received thunderous applause, John Foster Dulles prevailed after two weeks of arm-twisting and threats to withhold aid. His resolution pa.s.sed, though the only enthusiastic supporters were the worst Latin American dictators, such as Nicaragua's Somoza. In June the CIA sponsored an invasion of Guatemala and overthrew Arbenz.

Operation Success was a long-term disaster for Guatemala. The country's new president, General Carlos Castillo Armas, had been handpicked by the CIA. He swiftly canceled the agrarian reform legislation, disenfranchised illiterates, restored the secret police, and outlawed political parties, labor groups, and peasant organizations. Within a year and a half, Castillo Armas had driven most of the peasants off the land they had gained under Arbenz.

U.S. politicians turned a blind eye to the situation. The year after the coup, a seven-man congressional delegation toured Guatemala and met with Castillo Armas. Their report spoke glowingly of "the overthrow of the Communist-front government." The U.S. politicians admitted that political parties had been abolished and that Castillo Armas ruled by fiat. The Guatemalan president a.s.sured them, however, that "it was the avowed program of the Government to use democratic processes to the fullest extent." The report concluded: "Guatemala is the showcase of Latin America and has become a political, social, and economic laboratory."

Castillo Armas was a.s.sa.s.sinated in 1957. The country descended into three decades of repression, violence, and terror as governmental death squads and guerrilla bands roamed the countryside-a direct legacy of the U.S. intervention. The coffee elite continued to rely on cheap peasant labor, and even though many plantation owners deplored the violence under the repressive military regime, it allowed them to keep their land and status.86 Suicide in Brazil Throughout the first half of 1954, the coffee price boom boosted Brazilian spirits. Through March, flush Brazilians bought 15 percent more American goods than in the same period the previous year. In June, Getulio Vargas raised the minimum coffee export price from 53 cents to 87 cents a pound. Then, in July, coffee prices took a swift tumble. During the first half of 1954, the major U.S. coffee roasters bought heavily in antic.i.p.ation of a shortage; so did the American housewife. As a consequence, the overstocked U.S. market of July was hesitant to buy more at high prices.

To support the market, the Brazilian government was forced to buy up some of its own coffee. Vargas sent his representatives to ask the Federal Reserve Bank of New York for a loan to pay off his country's growing debts, but the bank refused. Brazilian inflation threatened to spiral out of control, the free-market value of the cruzeiro cruzeiro having reached 60 to the dollar, which put increasing pressure on Vargas to officially devalue his currency. Brazil's single biggest import expense was for fuel oil; the country would require an estimated $200 million for oil in the next six months, even at the low official exchange rate. Brazil had plenty of its own crude oil, but Vargas was determined not to allow U.S. firms to develop and exploit his country's resources. The previous year he had created Petrobras, a state monopoly for petroleum exploration. having reached 60 to the dollar, which put increasing pressure on Vargas to officially devalue his currency. Brazil's single biggest import expense was for fuel oil; the country would require an estimated $200 million for oil in the next six months, even at the low official exchange rate. Brazil had plenty of its own crude oil, but Vargas was determined not to allow U.S. firms to develop and exploit his country's resources. The previous year he had created Petrobras, a state monopoly for petroleum exploration.

Over the weekend of August 14-15, Vargas attempted a stopgap measure, as some American roasters cut their prices by 10 cents a pound. The Brazilian government allowed coffee exporters to exchange 20 percent of their dollar receipts at the free exchange rate, effectively lowering the minimum export rate by 20 cents and unofficially devaluing the currency. The following week, the U.S. coffee industry lowered prices by as much as 18 cents a pound.

As the Brazilian economy slid into chaos, a political crisis also hit Vargas. Since his election in 1951, opponents had been carping at him for his populist leanings and support of labor rights. On August 5 an a.s.sa.s.sination attempt against Carlos Lacerda-editor of the right-wing paper Tribuna da Imprensa Tribuna da Imprensa and one of Vargas's most vocal critics-failed. Lacerda had been running in a congressional race against Vargas's son Lutero, and a subsequent investigation linked the a.s.sa.s.sin to the head of the president's personal guard. Cries for impeachment grew, just as the coffee situation became disastrous. and one of Vargas's most vocal critics-failed. Lacerda had been running in a congressional race against Vargas's son Lutero, and a subsequent investigation linked the a.s.sa.s.sin to the head of the president's personal guard. Cries for impeachment grew, just as the coffee situation became disastrous.

On the morning of August 24, 1954, Getulio Vargas, seventy-one, shot himself through the heart in his bedroom. "After decades of domination and plunder on the part of international economic and financial groups," he wrote in his suicide note, "I placed myself at the head of a revolution and won." Yet unnamed international groups had joined his domestic enemies in an attempt to subvert his campaign to create national wealth and autonomy. When he took office in 1951, he wrote, "profits of foreign companies were reaching as much as 500 per cent per annum." Temporarily coffee had come to the rescue. "Came the coffee crisis and the value of our main product rose." After this brief respite, however, "we tried to defend its price and the reply was such violent pressure on our economy that we were forced to give in. . . . There is nothing more to give you except my blood," Vargas concluded. "I have given you my life. Now I offer you my death. I fear nothing. Serenely I take my first step toward eternity and leave life to enter history."

It is not clear to what "international groups" Vargas attributed his downfall. He must have been aware of the U.S. role in deposing Arbenz in Guatemala only two months earlier. Nonetheless, he could not reasonably hold the United States responsible for the abrupt decline in coffee prices any more than U.S. politicians should have blamed the previous price hike on Brazilian machinations. In both instances the market price had responded-with a little help from speculators and panicky or angry consumers-to the basic laws of supply and demand.

Vargas died a tragic figure, his fate tied, as always, to coffee. He had risen to power in 1930 in large part because Brazil was in economic crisis following a collapse in coffee prices. A quarter century later he took his own life under similar circ.u.mstances. His political life and his beloved Brazil's history were intimately related to the coffee tree and its berry. "Many feel that Brazil's capitulation on the coffee price was one of the things that led directly to President Vargas' suicide," wrote an American journalist in October 1954.

Tensions between the United States and Latin America remained high. "The anti-American riots and demonstrations which periodically sweep one or another of the twenty republics do not actually reflect a hatred of the United States," Andres Uribe concluded in Brown Gold Brown Gold, his 1954 book about coffee. Rather they expressed "the exasperation of good neighbors with what they feel is United States indifference to their basic problems." That exasperation would grow, as worldwide overproduction led to disastrously low coffee prices.

14.

Robusta Triumphant There is hardly anything that some man cannot make a little worse and sell it a little cheaper.

-Comment at 1959 National Coffee a.s.sociation convention

In studying the position of the coffee industry today, it seems to me that our outlook is exceedingly bright. I confidently expect that we are about to enter one of the periods of greatest growth in our history.

-Edward Aborn, May 18, 1962

Since the late 1800s, the boom-bust coffee cycle had whipsawed Latin American economies. The cycle's consequences would be even more devastating in the cold war era, as more African and Asian countries came to rely on the bean. A long-predicted coffee glut commenced in 1955. During the first half of the 1950s, as coffee prices had risen, hopeful growers in the tropics planted new trees. Arabica trees produce four years after they are planted. Robusta trees, however, take only two years from seedling to harvest and produce more heavily. Encouraged by the popularity of instant coffee, many African colonies increased robusta growth dramatically.

Out of Africa With the European powers weakened by World War II and natives eager to share in the wealth around them, the traditional method of rule-white Europeans applying an iron-fisted Bula Matari Bula Matari ("rock crusher," in Kikongo)-clearly would not work anymore. As one African politician told the French National a.s.sembly in 1946, "The colonial fact, in its brutal form . . . is impossible today. ("rock crusher," in Kikongo)-clearly would not work anymore. As one African politician told the French National a.s.sembly in 1946, "The colonial fact, in its brutal form . . . is impossible today. This historical period of colonization is over This historical period of colonization is over."

In 1947 the British granted independence to India, and pressure grew for Britain, France, Portugal, and Belgium to release the colonies they had carved out of Africa in the late nineteenth century. In 1951 Britain gave Libya its independence, and the next year a military coup in Egypt severed its ties to England as well. Issues of economic inequities, forced labor, racism-and coffee-played a major role in the independence movement in countries such as Kenya, Uganda, the Ivory Coast, Angola, and the Belgian Congo.

In Kenya, native laborers first sabotaged crop harvests, but in 1952 many coffee workers joined other disenchanted Africans in what came to be called the Mau Mau Rebellion, which resulted in government suppression. By the end of 1954, detention camps and prisons held 150,000 people.

At the same time, however, the British inst.i.tuted land reforms and opened more coffee cultivation to African producers. By 1954 some 15,000 Kenyan natives grew coffee on tiny plots, totaling only 5,000 acres. Over the next few years Africans would come to dominate the Kenyan industry, producing some of the finest arabica beans in the world.

Other African countries also produced limited amounts of arabica, but the largest source remained Ethiopia, coffee's original home. Although there were a few plantations where trees were grown scientifically, most coffee still grew wild in the forests of the Kaffa provinces. As a result, Ethiopian coffees varied wildly in flavor, from awful to sublime.

In 1954 Ethiopia exported 620,000 bags and Kenya 210,000 bags of arabica beans, but over 80 percent of the nearly 6 million bags that left Africa that year were robusta beans. Angola had been the leading producer of robusta, with just over a million bags, but the tiny Ivory Coast-about the size of New Mexico-surged past it that year to export 1.4 million bags of coffee. For the first time coffee provided more of that country's income than cocoa.