Anderson Clayton Knows No Bounds
Silberstein, Paul
Anderson, Clayton and Company, though the world's largest trader of cotton and other agricultural commodities, is little known to anyone outside the pages of the financial press. Despite its...
...4. Omer Hermann, "South Brazil, New Land of Cotton," Farm Credit Circulars (USDA C-117), May, 1940, p. 38...
...Next, in 1970, under pressure from the textile manufacturers, the U.S...
...In addition, ACCO found the special tax reduction being offered by Brazil quite attractive...
...9 This episode is a classic example of how ACCO altered its political line to facilitate profit-making...
...26 - -NIn 1956, however, the Brazilian government, desperately needing dollars, tried to regulate the foreign companies that were making so much money from the devaluation deals...
...ACCO bought and sold quantities of cotton in Brazil during the Korean War period, and in fact the immense profits made in Brazil helped make 1951 the company's biggest year worldwide.11 -CcJStnp.O CsJS Tr.-CtIb.Y -ECC AR~ - 25 - However, when it appeared that the war was going to end and the price of cotton would drop, ACCO quickly closed down most of its Brazilian operations...
...BACK TO THE STATES Seeing its operations hampered by the Brazilian government, ACCO decided to try its luck once again in the UIited States...
...2 0 Second, for the first time, an attempt was made to provide institutionalized credit to cotton farmers...
...cotton was much higher than the going world price...
...2 6 From the original insurance company which it used to protect its own cotton warehousing and shipping operations, ACCO went into "a wider based insurance business for property casualty coverage, followed by entry into life insurance and other coverages...
...See Banas (Sao Paulo: Editora Banas), May 8, 1972...
...8 Although the stated goal was to help the war-torn nations of western Europe, in reality it gave the United States an exclusive market in those countries for its goods...
...It was very easy to sell the stock that amounted to 25 percent of ACCO-Brazil's assets (the rest is still held by the parent U.S...
...1 2 ACCO took ample advantage of both the farm and the export subsidies...
...Clayton was able to obtain credit to build warehouses, in which he stocked cotton and then sold it to Europe at an immense profit when the market went up...
...One study has shown that the likely earnings of a cotton-farming family during this period were around $100 a year, barely enough to survive on, let alone pay for much needed improvements such as fertilizers and crop sprayers...
...And in the process, ACCO would of course sell a lot of cotton...
...M.L.C...
...3. Ibid., p. 162...
...ACCO, along with SANBRA (owned by the Belgian-Argentinian group Bunge & Borne) and the Brazilian financial group of Matarazzo gained virtual control over the cotton industry in Brazil...
...The only one in Brazil to really profit from the war's effect on the cotton situation was the Brazilian government: it had bought cotton at relatively low rates...
...In 1921 ACCO opened an agency in Mexico to sell Mexican cotton, which later evolved into an integrated operation including crop financing, ginning and oil milling...
...In an attempt to prevent a crisis, the Brazilian government in 1942 declared a minimum support price for cotton, under which it bought the cotton if the ginners and exporters would not buy at the established price...
...It took nearly three years for the government to unload all this cotton, even at very low prices...
...Europe preferred to trade instead with other countries, such as those of South America, which had recently switched to cotton production (from coffee and sugar), and unlike the United States, were willing to import European manufactured goods...
...It is no wonder then, that Brazilian cotton production has risen steadily since the early sixties, having already surpassed the previous peak of 1945...
...Specifically, the Marshall Plan provided the countries of Western Europe with credit for buying goods (including cotton) that they otherwise could not afford...
...Paul Silberstein References 1. There are studies of Anderson Clayton in Mexico similar to the aims of this one...
...We're pretty big in cotton in Mexico and Brazil...
...Rodriguez was head of the Cotton Farmers Union in the 1940's...
...This is the legacy left by William Clayton: go where the money is to be made...
...Both letter and study are in the Instituto Economico Library in Sao Paulo...
...government to inter ene in support of its own financial interests...
...Interest rates for cotton farmers were reported to be around "120 percent per year, a rate that bankers do not tend to charge...
...in turn complained to the International Monetary Fund, which has always opposed currency exchange controls...
...ACCO has a reputation in Brazil as being a sure bet...
...war than did others in the cotton world,) As ACCO and the other export houses stopped buying, the Brazilian government was forced to buy the entire 1952 crop, and even part of the 1953 crop that had been planted before the fall of the market...
...Of course ACCO had better sources of information about this U.S...
...Moreover, because of special provisions of the Marshall Plan, Brazil had a hard time selling cotton to Europe...
...Meanwhile, the United States has lost its attraction as a cotton empire for Anderson Clayton...
...But the odds were very much in Clayton's favor, since he was at the time Under Secretary of State for Economic Affairs, and close to certain key Roosevelt associates...
...In addition, all the major buying countries in Europe had established government agencies to handle the cotton trade directly, thus further eliminating the need for trading firms like ACCO...
...It bought a moving company and started extensive buying and development of insurance companies...
...This credit system, along with other inducements, was certainly sufficient for these companies...
...6 So, as in the current "boom" in Brazil, only a few benefitted from the profits of the rise in cotton production in the 1930's...
...Arruda e P.C...
...Ibid...
...cotton was bought at above the world price, it was difficult to sell on the world market...
...Together with other U.S...
...20 Million Less," in Panorama Economico Latinoamericano, no...
...Brazil was dependent on large corporations such as ACCO with their extensive ties to the international market, and their system of organizing capital and controlling the internal market...
...It invested in largescale corporate farming, such as an immense 52,000 acre spread in the San Joaquin Valley in California, and later even received large sums of money not to plant...
...2 9 Thus, Latin America provided the margin to save the company during the years after U.S...
...7. Le Marche Mondial du Cotton (Paris, 1948), p. 48...
...The company's expansion in the United States was matched by expansion abroad...
...In fact ACCO has been for many years the leading private export company of Brazil...
...Prior to this, the only credit available to farmers was provided informally by Brazilian middlemen, who loaned money from their own resources and from the large export houses at usurious rates...
...Then it moved quickly into Texas, Arizona, and later California, where it built cotton ginning and oil processing plants...
...That is, ACCO bought Brazilian cotton at less than the world price, and then sold it on the world market at an extra profit...
...Since then, other inducements have been granted to the foreign export houses: for example, the reduction, and finally, the elimination of the state tax on cotton, which in effect lowered the price of Brazilian cotton...
...export houses operating in Brazil, ACCO made its dissatisfaction known to the U.S...
...government...
...in offering crop or export subsidies...
...cotton in a market that could ill afford moderate, let alone high, prices for cotton...
...AN INVITATION FROM BRAZIL Thwarted in its original plan to share in the profits from cotton exports through the exchange controls, the Brazilian government tried another approach...
...The brief history of ACCO's activities in Brazil and the United States presented below offers several basic insights into the operations of the large multinational corporation...
...3/4, March/April, 1969, pp...
...Since the U.S...
...The company gave little if any consideration to the effects this would have on the cotton industries involved or on the national economies as a whole...
...1 9 Company spokesmen simply neglected to mention the fact that much of this investment in Brazil was caused by being stuck with unremittable Brazilian currency...
...The net effect of ACCO's large-scale integrated operations in inland Brazil was to crowd out the small independent ginners, who were unable to compete with the larger, more modern outfits...
...Despite its anonymity, the decisions made by this Houstonbased corporation have greatly affected cotton farming in both the United States and Latin America...
...It instituted what was known as the Tosto Filho Plan, under which the government controlled the exchange of currencies involved in cotton transacting...
...Companies like ACCO stopped receiving fat checks for not planting, and they no longer had major inducements to export U.S...
...It will be in a country that allows the company to make a sizeable profit and offers special privileges...
...Under the stimulus of this price support program, Brazilian farmers planted more cotton than ever, and the yield was almost 11 percent of world production...
...For ACCO, Brazil is clearly a stable base from which to reconstruct its agribusiness empire...
...The head of the Brazilian central bank, in an attempt to repeat the success of the World War II deal, declared that his bank would buy all cotton regardless of quality...
...2 4 Furthermore, ACCO was unsuccessful in breaking into the cottonseed subproduct market in the United States, as it had done so successfully in Brazil...
...Imperialism, ed...
...company...
...7 Yet, despite the minimal price support, farmers' profits were severely limited by the wartime inflation...
...24 - Thus the great cotton boom that took place during the so-called Golden Years of the Brazilian cotton industry (1935-1945) was primarily for the benefit of a few large companies...
...ACCO is well known as the largest private export company from Brazil and because it makes widely used household products...
...And third, like so many other large multinationals, ACCO has eagerly taken advantage of the many incentives provided by the current Brazilian regime, incentives which have made Brazil one of the world's foremost havens for foreign investment...
...In fact, recent studies have shown that Brazilian cotton prices between 1953 and 1965 were related not to the world market price, but rather to the periodic devaluation o1 4 the cruzeiro with respect to the dollar...
...cotton industry a competitive edge over producers in other countries...
...Forbes, 2R...
...Deodoro Perrili, "Conficoes Economicas Atuais da Comercializacao do Algodao no Brasil," (unpublished paper), Brazil, 1959...
...The impact on Brazil of the U.S...
...Prior to the war, the United States grew cotton, but all the buying and selling for the world market was done in Europe...
...After vehemently opposing government interference with free enterprise in the United States, ACCO turned right around and got the U.S...
...Banas (Sao Paulo), May 8, 1972...
...See Judith Tendler, "Agriculture Credit in Brazil," USAID internal document, and Dale W. Adams et al., "Is Inexpensive Credit a Bargain for Small Farmers...
...Trinta Anos, 1934-1964," in Revista Anderson Clayton No...
...system of subsidies, commodity dumping, and quotas for exporting countries still remained an obstacle to the Brazilian cotton business...
...The company also traded large quantities of cotton under the export subsidy system, and although ACCO was still nominally involved in Brazil, its real operation at this time was in the United States...
...2 8 Since the mid 1960's Latin America has accounted for almost half of ACCO's earnings...
...In one year, 1958, this almost happened in the state of Sao Paulo: only 1,260,000 tons of cotton were produced, whereas their textile mills needed some 1,140,000 tons just to keep operating...
...ACCO was severely threatened because the European countries, in retaliation for the high tariffs imposed by the U.S...
...legislators also thought that by paying farmers not to plant all their land, they could effectively combat overproduction...
...ACCO will undoubtedly stay in Brazil, but where else it will be tomorrow is hard to say...
...In addition, there was even talk of financing the farmers' fertilizer purchases, and of supporting the farmers between cotton seasons...
...By "closing up shop", however, ACCO was able to avoid the immense losses that were suffered by the Brazilian government...
...Additionally, in this period the firm moved into ginning cotton and extracting oils in the state of Parana, and installed new gins and a new oil factory in Londrina...
...cotton.23 ACCO readily saw the virtues of Brazil, where cotton was cheaper and could be sold easily worldwide...
...Cotton is Still King," Forbes, September 15, 1969...
...The solution to the cotton exporting problem was the Marshall Plan, which Clayton proposed to Roosevelt...
...The Recent Brazilian Experience," Inter-American Economic Affairs Vol...
...Thomas Skidmore, Politics in Brazil, 19301964 (New York: Oxford, 1967), p. 177...
...subsidies, and of ACCO's exit, was severe...
...and after the war, prices nearly doubled...
...Although the quantities of cotton exported from Brazil were quite low during the 1950's (except for the brief Korean War period), foreign export houses like ACCO found one reason to export at least some cotton from Brazil...
...23 -ACCO IN BRAZIL, 1934-40 ACCO IN BRAZIL, 1934-40 ACCO's arrival in Brazil in 1934, however, was not simply the result of normal business expansion...
...In the period 1968-1972, ACCO opened up five new feed mills in Brazil, some of them costing up to $5 million...
...Yet periodically, the pressure to unload the accumulated stocks was so great that the government was forced to give additional subsidies to those companies that could sell the cotton...
...government bought the excess cotton in order to keep up the price, enormous stocks of surplus cotton accumulated in government warehouses...
...The net result was that, despite its vehement opposition to the Tosto Filho Plan, ACCO managed to turn the situation around to its advantage...
...For an excellent account of William Clayton's original dislike of Roosevelt and later involvement with the New Deal see David W. Eakins, "Business Planners and American's Postwar Expansion," in Corporations and the Cold War, ed...
...ACCO, on the other hand, would end up paying less (in dollar value) than it had originally agreed to pay, and thus would come out with a hefty profit...
...First, a new variety of cotton seed was discovered in 1957 which allowed Brazilian farmers to increase their yields and reduced the problem with diseases...
...Barlow's reply reveals much about ACCO's current operations: "The reasons we don't quit even though cotton makes little money, is that it's a support operation for our profitable foreign interests...
...2 7 Given the debacle of 1969, Forbes magazine asked ACCO President T. James Barlow, "Why not get out of cotton altogether...
...4 A rise in the transaction tax (from one to two, and then four percent) further reduced the number of independent ginners in southern Brazil...
...See "Mexico Cotton, U.S...
...by David Horowitz (New York: Monthly Review Press, 1969), pp...
...3 0 Each of these investments required a sizeable amount of capital...
...Although ACCO began as a small commodity trading house dealing primarily in cotton at the turn of the century, it has steadily grown into a large, multinational corporation...
...They were wrong...
...More important, Anderson, Clayton (ACCO) presents an interesting case of how a multinational corporation's power to move back and forth across national borders is used with total disregard for the consequences of its activities...
...In order to help finance the feed mills and other operations, ACCO decided to float 10 million dollars worth of stock on the Brazilian market in 1972.31 Given the demise of the Brazilian stock market after the boom of 1971, many observers felt this offering would go without takers...
...Fann and Donald Hodges (Boston: Porter Sargent, 1971), p. 239...
...28 -ACCO's latest investment in Brazil involves extensive building of animal feed mills...
...These conditions, plus the inherent dependence on financing from the foreign export houses, led to a decline in Brazilian cotton farming (see graph) that lasted until 1960, when ACCO once again began to concentrate on Brazil...
...8. See the Associated Press dispatch which carried Clayton's obituary on February 8, 1966...
...Folha da Manha (Sao Paulo), March 21, 1956...
...Ibid...
...The restricted loans and virtual control over European port facilities gave the United States full command of the market, and there was little that Brazil could do...
...The State's Cotton Crisis, Subsidy Cut Will Hit Hard," San Francisco Chronicle, August 16, 1970...
...Currently ranked by Fortune as number 202 on its list of U.S...
...In fiscal 1968 his Latin American operations netted the company $2.8 million...
...In fact, Brazilian cotton exports declined so greatly that the country almost went out of the exporting business during this period (see graph...
...The company was thwarted, however, by the existence in Brazil of a one percent transaction tax, which was imposed every time the cotton changed hands - from farmer to ginner to exporter...
...These export subsidies were a logical outcome of the crop subsidies, and gave the U.S...
...the firm diversified its operations, expanding considerably into processed foods...
...2 5 In 1968, thus blocked in its original plan, ACCO decided to invest in other areas...
...1 7 During the two years that the Tosto Filho Plan was in existence, ACCO accumulated a sizeable number of cruzeiros...
...But in the face of decisions made in Washington and Houston, there was little that could be done...
...By 1969, ACCO began to feel big losses from cotton transacting in the United States which severely affected the company's earnings...
...143-172...
...Cotton was considered particularly important, since it was felt that by supplying the European textile mills, jobs would be created, clothing manufactured, and immediate tangible support given the people during the lean post-war years...
...Given this situation, ACCO "found it easier and more profitable to sell, say, Brazilian cotton rather than American cotton to an Italian mill...
...As Andre - 27 -Gunder Frank described the system...
...In Brazil, however, it has continued its concentration in agriculture, and is growing rapidly in such areas as animal feeds and consumer food products...
...The cotton boom ended abruptly during World War II, when Brazil was cut off from the textile mills of Europe...
...47-58...
...Although primarily involved in various aspects of agriculture, ACCO has also diversified into such areas as manufacturing and insurance...
...Total earnings in that year were only $3.8 million...
...20-21...
...Sanbra and Anderson & Clayton, in 1961 received $54 billion cruzeiros in loans from the Bank of Brazil, or 47 percent of the Bank's entire agricultural and industrial loan portfolio...By reloaning this money (at higher interest rates of course) to wholesalers and producers of cotton whom they thereby controlled...these firms use Brazilian capital to control much of the domestic export cotton market,..21 Under this plan, the Brazilian government would provide all the necessary capital for an institutional credit system, and then relinquish control to the two largest foreign export houses, ACCO and Sanbra...
...Naturally, with this kind of guarantee, many farmers switched back to cotton for the 1951 season...
...Without government protection, cotton grown in the United States was unable to compete on the world market...
...In 1972 the exporters got another inducement to export from Brazil: reduction on taxes when increasing exports...
...The government also reinstituted the minimum price support program used during World War II...
...The U.S...
...Because U.S...
...Inoportuno, segundo os exportadores, o exame das condicoes de comercio do algodao da nova safra," Folha (Sao Paulo), January 28, 1958...
...But before actually paying for the cotton, rampant inflation would occur, thus wiping out the profits of the farmers...
...Two recent studies expose a good deal of the malpractice of Brazilian agriculture credit...
...Junqueira, "O Padrao Estacional dos Precos do Algodao no Estado de Sao Paulo," Agricultura em Sao Paulo Ano XVI no...
...Beginning with its early history, then, ACCO pursued profits across national borders with .no concern for the farming economies affected...
...While the ginners, oil processors and exporters made huge profits, the farmers made almost nothing for their labors...
...With some of the lowest cotton prices in the world, Brazil has become a key supplier of the Japanese textile mills, which are located in Japan as well as Formosa and Hong Kong...
...In order to cut the handling costs, ACCO decided to integrate the ginning and exporting operations, which gave them a clear advantage over other exporting houses...
...This agency, which brought together exporters, government officials and agronomists, was largely responsible for the progress made in rationalizing Brazilian cotton production...
...Banas, op, cit...
...In reality, the farmers just increased their output per acre by using more fertilizer and more intensive farming methods...
...In fact, because of problems it has encountered in agribusiness, ACCO functions in the United States essentially as a holding company for its insurance operations...
...1 The move into Mexico was sharply criticized at the time by some southern Congressmen, who accused the company of encouraging foreign cotton farmers to grow in competition with U.S...
...A new soybean factory was also established.18 Most important, ACCO entered the coffee buying and selling business in 1958, and in a few short years it was the leading exporter of Brazilian coffee...
...First, ACCO was willing and able to move back and forth between the two countries as suited its drive for higher profits...
...Since the cruzeiros could really only be used internally, ACCO was forced to reinvest them in Brazil...
...5 Most of the farmers' potential profits were wiped out by the usurious cropfinancing arrangements negotiated with local middlemen, who were ultimately supported by ACCO and the other large operators...
...We tried to jump in on Crisco and Snowdrift with a me-too product," said ACCO's President ruefully, "and it didn't work...
...As we will see, this is a persistent pattern in ACCO's 70-year corporate history...
...1 3 The loss of income from cotton exports was disastrous for the Brazilian government, which depended on agricultural exports as a source of foreign exchange with which to finance its industrialization projects...
...cotton (it is still the world's largest cotton handler), cotton only accounts for about 10 percent of the firm's earnings...
...Indeed, overall Brazilian production in these years was so low that local textile manufacturers were openly concerned that there might not be enough cotton to supply even domestic needs...
...13, Ano 11, 1964, p. 15...
...With these earnings the company began a rapid process of expansion...
...THE EARLY HISTORY ACCO was founded in 1904 by William Clayton and the Anderson brothers, who took advantage of changes in the world banking and export situation caused by World War I to enlarge their operation...
...Quadros realized that the rationalization of Brazilian agriculture alone was not enough: the U.S...
...The first systematic attack on the problem of low Brazilian cotton production and consequently low exports, was initiated by Janio Quadros, when he was governor of the State of Sao Paulo...
...497-506...
...4-11, and "Algodon Un Monopolio Blanco," Panorama Economico Latinoamericano V (Havana: Ediciones de Prensa Latina, 1966), pp...
...government drastically reduced the amount of money paid for crop subsidies...
...26, no...
...Beside this, the company built a new soap factory with a capacity for four times the existing old one...
...In 1965 the U.S...
...ACCO executives now describe the period from 1956 to 1958 as one of natural growth...
...Os Lucros do Pioneirismo...
...Quadros set up the Commissao Estudal do Algodao (the State Commission for Cotton...
...As Fortune magazine noted in 1946: "As the world's largest supplier of cotton, Anderson and Clayton has an invitation to do business on a scale greater than ever before...
...by K.T...
...2 2 Because the middlemen are able to obtain cotton cheaply, ACCO has found it extremely profitable to return to large-scale exporting from Brazil...
...The political line of the company also changed to accomodate these needs, sometimes extolling the virtues of the free marketplace, other times pushing for government supports and controls...
...Nao Pode 0 Plano Tosto Filho...
...201 (1967), pp...
...dustbowl agricultural depression...
...ACCO, which had earlier refused to buy cotton, was greatly upset by this turn of events, since its position as a middleman had been eliminated by the government's intervention in the cotton transacting business...
...A short description of the history of price and export subsidies can be found in Joseph A. Moss, "Adequate Supplies and Competitive Prices are U.S...
...6. "Financiamento da Cultura Algodoeira Contado por Um Lavrador," Folha da Manha (Sao Paulo), August 9, 1945...
...Cotton!s King Tills New Fields," Business Week, January 23, 1965...
...It is not surprising, then, that during this period, William Clayton was raving about the importance of free enterprise, and condemning state intervention as a form of socialism...
...Since at the time the International Monetary Fund was considering a $300 million loan to Brazil, it was able to exert considerable pressure on the Brazilian government...
...cotton was 35 cents per pound and the world price 25 cents, the government covered the difference so the export houses could sell at the world price...
...The same article in Forbes commented, "Indeed, Barlow has shown himself quite adept at squeezing profits out of these countries...
...H With such favorable conditions having developed in the United States, ACCO simply slowed down most of its cotton operations in Brazil...
...9. Fortune, op...
...cotton operations were no longer profitable and before ACCO could get its insurance holdings together...
...Rather, the company moved to Brazil (as well as to Peru, Argentina and Paraguay) to avoid going bankrupt during the Depression...
...5. Study of Flavio Rodriguez found in a letter to the Minister of Fazenda...
...In order to insure continued production, Brazil had to offset the advantages that the United States offered companies like ACCO...
...Mais algodao por alqueira e fibra," Diario da Sao Paulo, May 3, 1957...
...cotton transacting business...
...They used Brazilian government credit (which cost as little as 0.5 percent per month) to finance the middlemen...
...2 (This was during the U.S...
...Clayton soon found, however, that there were still problems with exporting cotton from the United States...
...BRAZILIAN COTTON EXPORTED Tons 1910-1969 U.S...
...The government, which now held most of the available cotton in Brazil, began to sell directly to buyers in Europe...
...Business Week, op...
...Yet, it was impossible for Brazil to compete with the U.S...
...Foreign export houses such as ACCO were reluctant to buy cotton which they would be unable to ship...
...Today, although ACCO continues to be heavily involved in U.S...
...When it moved to Brazil, ACCO had originally planned to avoid the riskier and more expensive ginning operations in the interior, and concentrate on exporting to Europe through the coastal cities...
...1-30...
...government, refused to buy U.S...
...Andre Gunder Frank, "On the Mechanism of Imperialism," in Readings on U.S...
...Second, because of its power and connections, ACCO has been able to mold government policies to its own needs, and when this proved impossible, to close up shop temporarily until more favorable policies prevailed...
...As the world's banking center moved from London to New York after the war, more credit became available to finance cotton transactions from the United States...
...THE KOREAN WAR IN AGAIN, OUT AGAIN For a brief moment during the 1950's, however, when it appeared that the Korean conflict could develop into a prolonged war, ACCO renewed its interest in Brazilian cotton...
...Because of the added cost of farm subsidies (instituted by the NEW DEAL to keep domestic prices up), the price of U.S...
...SUBSIDIES AND BRAZILIAN INFLATION As the price of cotton dropped after the Korean War, the United States reinstated the farm subsidies in order to sustain the level of farm income...
...So ACCO had to figure out a way to sell overpriced U.S...
...The procedure was for ACCO to finance cotton growers, agreeing to buy at a price which at the time was above the going price...
...Clayton was even willing to sweep asidehis ideological differences with Roosevelt's New Deal policies when he saw a chance to reenter the U.S...
...At the same time, ACCO insured itself of large cotton supplies from the interior by providing financing for the small farmers...
...2. "Will Clayton's Cotton, II," Fortune, January, 1946, p. 162...
...ACCO News Release, February 11, 1971...
...1 6 Finally, in late 1958, after two years, the Tosto Filho Plan was eliminated...
...government decided it simply could not continue the expensive export subsidies it had been paying since the 1950's...
...cit., p. 64...
...Since they operated in dollars, these companies realized that there were huge profits to make from Brazilian inflation, particularly since they were privy to and often even influenced, the decisions about when currency devaluations would take place...
...1 (Summer, 1972), pp...
...That is, instead of allowing the export houses to keep the dollars they received for the sale of Brazilian cotton, the Brazilian government took the dollars (or other hard currencies) itself, paying the foreign export houses in cruzeiros.1 5 ACCO and the other foreign export houses were furious over this currency exchange control policy, as it essentially prohibited them from remitting their profits back to the home offices...
...As the war pushed the price of cotton up, everyone began to speculate, hoping to make a killing when the price went up even further...
...Given his position, Clayton was able to guarantee that the cotton purchases were made from his company...
...All these efforts were on a modest scale, but they were just a starting point, and Quadros was expected to expand them when he became President of Brazil in 1960...
...Needs," in Cotton International (Memphis, 1969), pp...
...3 Brazil in particular had an enormous potential for supplying cotton to the world market, as it had vast land resources and a large supply of cheap labor...
...These middlemen, referred to by one ACCO executive as "a necessary devil," then lend this money to the cotton farmers at interest rates that are as high as 80 percent a year...
...Therefore, Quadros had to devise a way of inducing ACCO, and other companies, to return to exporting cotton from Brazil...
...industrial coporations, ACCO has extensive holdings in the United States, and in Latin America (now limited to Brazil and Mexico...
...Thus, if the price of U.S...
...First, ACCO developed as a selling agency that dealt directly with European textile manufacturers, thus bypassing the European trading houses...
Vol. 7 • April 1973 • No. 4
