Up to that time San Francisco had received, on an average, only 200,000 bags of Central American coffee annually for the ten preceding years; while Europe had received about 1,500,000 bags a year. The quantity necessary to make San Francisco a factor would call for an importation, on an average, of 750,000 bags—a quantity almost four times as large as then established.
This was an extremely ambitious undertaking, considering the conditions then prevailing in Central America. European countries were firmly entrenched in the coffee business in Central America, with Germany leading in Guatemala, France in Salvador and Nicaragua, England and France contending for superiority in Costa Rica, and the United States getting only the leavings.
The European countries held their position in the Central American Coffee trade by liberal financing, and a thorough knowledge of the varying qualities of coffee produced on the different plantations. San Francisco, the only important port in the United States dealing in Central American coffees, had neither strong financial entrenchment in Central America nor expert knowledge of coffee quality. Year after year, San Francisco merchants had depended on consignments chosen by the consignors. This rendered quality selection of coffees by the importers impossible.
Rosseter, being primarily a steamship man, tackled the proposition from the standpoint of transportation, figuring that if he could establish and maintain preferential steamer service to San Francisco, and steady freight rates, a great step would be accomplished toward the desired end. This led to his interest in the Pacific Mail Company, of which the final outcome was his present position as vice-president of the reorganized Pacific Mail Company. In that capacity he maintained, practically throughout the entire period of the World War, freight rates on coffee from Central America to San Francisco that gave that Pacific port an immediate and definite advantage.
This gave merchants in San Francisco the chance to build up a steady trade, and prevented other ports in the United States from entering into serious competition with San Francisco as a distributing point for Central American coffees. The view taken by Rosseter was as far-sighted as it was broad. He argued that with the end of the war there would be no strength in a scattering distribution of Central American coffees by New York, New Orleans, and San Francisco; and the only promise of maintenance of the business for the United States would be in maintaining unity of distribution in one port of the United States, namely San Francisco.
The first year open to European competition after the war showed that San Francisco was well able to maintain its lead in Central American coffees. Today, the mortgages formerly held by European merchants on the native coffee plantations, and the control thereby of the produce of these plantations, are in the hands of American merchants; and what is more, out of general merchandising and importing by merchants of San Francisco there have developed expert coffee departments in all of the larger houses. The years of the war brought the product of virtually all plantations in Central America to the intimate knowledge of these expert coffee departments; and today the advantage that Europe formerly had—of knowing exactly what a specific plantation produced—is possessed by San Francisco merchants.
This is no small advantage when we consider that in Guatemala and Costa Rica, qualities vary from plantation to plantation, and that often on adjoining plantations there is from three to five cents a pound difference in quality, from the standpoint of cup merit.
One can not buy coffee in Central America as in Brazil, as these countries are not highly organized commercially, and the importers here are forced to assume the rôle of the Brazilian commisario and banker. The crop has to be financed from six to nine months before it is brought to the port; and the securities covering such advances are at best of questionable value, on account of political insecurity, and the ever-threatening earthquakes, and the uncertainty of the elements. Distribution of the coffee after it has been brought to San Francisco also involves many difficulties, notwithstanding that the demand is good. This will be better realized when we consider that the Pacific coast, from Alaska to Mexico, and eastward as far as the Rocky Mountains, embraces a population of about 8,000,000, whose annual consumption is estimated at 400,000 bags; and that, as already stated, treble that quantity was imported to San Francisco in 1919.
In 1900, ninety-nine firms were engaged in the green coffee importing business (some were roasters also) in New York; six in Philadelphia; twenty-eight in San Francisco; twelve in New Orleans. In 1920, there were two hundred and sixteen in New York; thirty-one in San Francisco; fifteen in New Orleans.
Green Coffee Trade Organizations