SUGAR
Considered from the point of view of agriculture, manufactures or
commerce, Cane is King in Cuba. The sugar crop of 1918, amounting to
25,346,000 bags, or 3,620,857 tons, was sold for over $350,000,000; and
the crop of 1919, consisting of 27,769,662 bags, equivalent to 3,967,094
tons, will probably realize the sum of $500,000,000. The significance of
these facts may be strikingly appreciated by making a simple comparison.
The Cuban sugar crop of 1919 is worth $200 for every man, woman and
child on the island; while the corn crop of the United States, the most
valuable crop of that country, worth $3,000,000,000, is equal to only
$30 per capita of the population.
The production and consumption of sugar throughout the world was
practically doubled during the fifteen years preceding the world war.
The total production for 1914 was 18,697,331 tons, of which 8,875,918
tons came from beets, and 9,821,413 tons from cane. As a consequence of
the war, the world production for 1919 was only 16,354,580 tons, of
which only 4,339,856 tons were obtained from beets, while 12,014,724
tons were obtained from cane. The crop of 1919 shows, therefore, a gross
shortage of 2,342,751 tons compared with that of 1914, without taking
into account the normal increase in consumption indicated by the
experience of the fifteen years before the war; during which period the
production of cane sugar in Cuba was actually trebled in volume, showing
an average annual increase of approximately 125,000 tons. The production
of sugar in Cuba in 1914 was 2,597,732 tons, and in 1919 it was
3,967,064 tons; showing an average annual increase of about 275,000
tons, or approximately seven per cent. These figures, taken with those
of the fifteen preceding years, indicate that the development of the
cane sugar business in Cuba during the past twenty years, or since the
establishment of the Republic, has been of steady growth and healthy
proportions.
Natural conditions have greatly favored the growing of sugar cane in
Cuba, and the demand for sugar throughout the world has increased so
rapidly that it is not surprising that this industry has become
paramount in the insular Republic. Begun on a small scale and in almost
indescribably primitive fashion nearly four hundred years ago, as
related in the first volume of the History of Cuba, it was not until
near the end of the sixteenth century that the industry was established
on a secure foundation. Even then it received little encouragement from
the Spanish Government, and it was not until the close of the eighteenth
and opening of the nineteenth century that it began to assume the
proportions for which nature had afforded opportunity. With the
emancipation of the island from peninsular rule, however, and the firm
establishment of a government of Cuba by Cubans and for Cubans, the
sugar industry has developed into proportionately one of the greatest in
the world.
A general impression prevails that practically all of the lands in Cuba
are adapted to the profitable cultivation of sugar cane; that numerous
large and desirably located tracts, suitable in character and sufficient
in area to justify the installation of modern “centrales” or factories
of normal average capacity, are still to be found, scattered throughout
the island and purchasable at nominal cost when compared with their
economic value; and that the annual production of sugar in Cuba can,
therefore, be profitably increased to the extent even of “supplying the
whole world with all the sugar it needs.” This impression is, however,
erroneous and misleading. General James H. Wilson, commanding the
Military Department of Matanzas and Santa Clara under the first
Government of Intervention, who was esteemed an authority on the
subject, reported in 1899 that it was a mistake to suppose that all
Cuban lands were of the first quality, such as would grow sugar cane
continuously for twenty or thirty years without replanting; that there
were in fact few such estates in Cuba; that most of the land, whether
red or black soil, produces cane for only twelve or fifteen years, and
much of it for from three to five years only; and that, in the two
provinces named, there was then little new or virgin cane land left,
nearly all of first class quality having at some time been under
cultivation. In this report he did not, however, take into account the
extensive areas of “cienaga” or swamp lands, which would not be
available for cane growing purposes until drained. Since then it has
also been satisfactorily demonstrated that some of the so-called
“savana” land, which has a “mulatto” or yellow soil, hitherto regarded
as worthless for sugar-producing purposes, can be made to produce good
crops of cane by the judicious application of fertilizers and with
suitable methods of cultivation. Sufficient time has not elapsed to
determine the durability of such plantations.
More conservative opinions, entitled to serious and careful
consideration, have been expressed to the effect that first class new
and virgin cane lands, favorably located and now available, can still be
purchased in Cuba at figures as low as twenty dollars an acre and in
sufficient area to make possible the profitable production of 3,000,000
tons of sugar above the present output, which approximates 4,000,000
tons; increasing the total to 7,000,000. It does not seem that such
great areas could easily be hidden under a bushel in as small an island
as Cuba, and it is probable that not more than one half of the total
area of the new lands, purchasable at such a price, would be suitable
for cane-growing purposes; in which case the cost would be raised to
approximately forty dollars an acre for the actual cane-producing area.
If these opinions and claims are accepted, it would seem unreasonable
to expect that such large areas of land, yet remaining and now
available, could average as good or prove as economically productive as
the lands now actually under cultivation; and it would not, therefore,
seem unreasonable to assume that to produce 3,000,000 additional tons of
sugar would require an area nearly if not quite as large as that now
required to produce the present annual output of approximately 4,000,000
tons. It is certainly difficult to believe that the area of land now
producing sugar could be duplicated from the new and virgin lands now
available in Cuba. The recent purchase of considerable acreages along
the line of the newly constructed Northern Railway by the American Sugar
Refining Company and the Czarnikow-Rionda interests, at prices ranging
from seven hundred and fifty to one thousand dollars a caballeria, or
about seventy five dollars an acre, for the actual cane-growing and
sugar-producing area, would seem to emphasize the conclusion that first
class new and virgin cane lands, yet remaining and now available in
Cuba, are not so plentiful or so cheap as claimed by some and generally
supposed.
The total area of Cuba is estimated at a maximum of about 30,000,000
acres; and it is probable that not more than ten per cent of this total
area, or 3,000,000 acres, is adapted to and now available for the
profitable cultivation of sugar cane, with sugar at even relatively
normal pre-war average prices. Indeed it is doubtful if even continuance
of the present abnormally high prices for sugar could greatly enlarge
such now available area. Large tracts of the richest lands in Cuba,
favorably conditioned and advantageously located but now covered by
“cienagas” or swamps, can however be effectively and economically
drained and made available for the cultivation of sugar cane; and such
lands when drained should produce sugar more economically and profitably
than any similar area of land in the island now growing cane. The
largest of these swamps are in the Cauto River valley, in the vicinity
of the Bay of Cardenas, and along the line of the Roque Canal leading
thereto, and in the region covered by the Cienaga de Zapata. The
reclaimable area of these swamp lands is estimated at not less than
750,000 acres.
Putting the present average annual production of cane in Cuba at 20 long
tons, and the average yield of sugar at 11.25 per cent, or 2.25 tons an
acre, and assuming a gross yearly production of 4,000,000 tons of sugar,
indicates that about 35,000,000 tons of cane are grown upon
approximately 1,750,000 acres of land; and allowing an additional
500,000 acres, to provide for and cover planting, replanting as
pasturage, it would seem that approximately 2,250,000 acres of the best
conditioned and most favorably located cane lands now available are
required to produce the present output of 4,000,000 tons. Careful
consideration of the subject leads to the conclusion that there are not
now available in the island over 500,000 acres of new and virgin lands,
upon which cane can be planted and profitably grown, with sugar at
prices approximating the pre-war ten-year average. But these additional
lands cannot reasonably be expected to average as good or prove as
economically productive as the lands now actually planted with and
growing cane. It should not be unreasonable to allow, for planting,
replanting and pasturage, the additional 250,000 acres required to
complete the estimated 3,000,000 acres given as the probable maximum
area adapted to, and now available for, the profitable cultivation of
cane in Cuba; unless and until the swamp lands, having an area of about
750,000 acres, shall be drained, reclaimed and put under cultivation.
Assuming that the additional 500,000 acres of land now available would
yield in the same proportion as the lands now planted and producing, an
increase of only 1,125,000 tons of sugar yearly would result, which
would raise the total annual production to about 5,125,000 tons. Should
the swamp lands be reclaimed and made productive, upon the same basis of
calculation there would be a further increase of only 1,687,500 tons,
bringing the total production of sugar in Cuba up to a maximum of only
6,812,500 tons a year, or at most, in round figures, about 7,000,000
tons. It seems most improbable that a larger production could be
developed and permanently maintained, unless through fertilization and
improved methods of cultivation, including irrigation; and it appears
doubtful if such measures would more than compensate for the natural
deterioration of soil and exhaustion of lands, that will inevitably
result from long continued cultivation; for much of the lands now under
cultivation will not produce for periods longer than from three to seven
or at most ten years.
The Cienaga de Zapata is the largest and most easily drainable of the
swamp areas mentioned. It is a vast alluvial plain, built up of the
washings of the most fertile and durable cane growing lands of Cuba,
enriched by the decomposition of the vegetable growth of uncounted
centuries. It has a total area of 15,307 caballerias, or 505,154 acres;
which is greater than the sugar-producing area of the Island of Porto
Rico, or that of the Hawaiian Islands; indeed it is nearly as large as
both combined. The net reclaimable area is not less than 450,000 acres;
which is sufficient to provide cane for thirty “centrales” of 250,000
bags, or fifteen of 500,000 bags capacity each; equivalent to an output
of 7,500,000 bags, or approximately 1,000,000 tons of sugar a year; the
production of which would be effected under a combination of
advantageous economic conditions not found in the production of sugar
elsewhere in Cuba, if in the world. Chief among these advantageous
conditions are the fertility of the soil, the extent and compactness of
the area of land, its convenient and economical accessibility to a deep
water port, and the fact that the entire area can be irrigated with
water from the drainage canals at a maximum lift of not over ten feet.
The drainage of these lands can be effected entirely by gravity and at a
cost not exceeding twenty dollars per acre for the net sugar producing
area. Comprehensive surveys have been made for effecting the drainage of
this great territory by well known American engineers; and a plan
providing for the utilization of the lands, when drained, has been
prepared by Mr. R. G. Ward of New York City, who was one of the chief
factors under Sir William Van Home in the building and putting into
successful operation of the original main line of the Cuba Railroad,
extending from Santa Clara to Santiago. Under the franchises or
concessions controlled by Mr. Ward, the not distant future may,
therefore, see the present output of sugar in Cuba increased by
approximately one-fourth, from the now neglected lands of the Cienaga de
Zapata.
According to Mr. H. A. Himely, who is a recognized authority on the
subject, 196 “centrales” handled the crop of 1919, amounting to
27,769,662 bags, or 3,967,064 tons of sugar. These “centrales” varied in
output, from a minimum capacity of only 145 to a maximum of 701,768
bags, showing an average of about 142,000. Hence it is clear that the
word “central” conveys no definite idea of capacity, and constitutes no
exact unit of thought or calculation. Let us, however, assume that the
word applies to a complete modern sugar factory of 250,000 bags yearly
capacity, each bag containing 325 pounds of sugar; an output of
81,250,000 pounds. Factories of such capacity may be installed as single
units or in multiple units. To obtain maximum results it is necessary
that they shall be provided with sufficient areas of suitable land in
one contiguous and reasonably compact body, within easy access of an
economical deep water port, so that the costs of hauling and delivering
the cane to the mill, and of transporting the sugar and molasses to the
port, or shipside, may be reduced to the minimum. Now, of the new and
virgin cane lands still remaining and now available in Cuba, there are
few if any now obtainable which answer to these demands; and it is
questionable if there are yet remaining and now available in the island
new and virgin lands in tracts of sufficient size and aggregate area to
warrant the installation of more than twenty “centrales,” having a
combined yearly capacity of 5,000,000 bags. Indeed it is believed that
it would be difficult if not impossible to find desirable and
economically satisfactory locations for even so large a number.
Wherever possible, virgin forests are cleared and planted for cane
fields, as the accumulated humus of centuries produces a growth of cane
that with care will endure for from five to twenty-five years without
replanting. In Oriente cane fields are still producing good crops which
were planted fifty and even sixty years ago. This method of cane culture
is, however, most uneconomical, since the soil in time will certainly
become exhausted. No plant responds more quickly to judicious and
generous use of fertilizers than does sugar cane; and, according to the
best authorities, no matter how rich the soil may be, it pays to
fertilize.
In opening up a sugar plantation, the trees are first felled and the
trunks of valuable timber drawn off the land, while the limbs, brush and
other waste materials are piled and burned. Owing to the previous shade
of the trees, the ground is free from weeds, and but little preparation
of the soil is required.
For the first planting, men with heavy sharp pointed “jique” sticks,
about five feet in length, travel on parallel lines across the fields,
jabbing these stakes into the ground at intervals of four or five feet.
Behind them follow others, bearing sacks of cane cut into short pieces,
containing one or two joints each, a piece of which is thrust into each
hole, and the earth pressed over it with the bare foot. From the eyes of
these sections of cane in the rich, moist earth there quickly rise
shoots or sprouts of cane, and under the influence of the heavy tropical
rains that fall during the summer months the growth is so rapid that the
young cane shades the ground before weeds have time to grow. According
to the usual custom of the country, the stumps of trees are left to rot
and enrich the soil. Thus in the course of a few years a plantation is
started at comparatively small cost, from which cane may be cut without
replanting for many years to come.
Where sugar plantations are developed upon “savana” lands, the rows may
be laid out with greater regularity and cultivated with modern machinery
and implements until the cane has secured sufficient growth. At the
expiration of eighteen months from the first planting, the cane should
be ready for the mill. Cutters, with heavy machetes, go into the fields,
seize the stalks of cane with the left hand, and with one deft blow of
the machete cut them close to the ground. With three or four more
strokes the canes are stripped of their leaves, topped, cut in halves
and thrown into piles, ready to be loaded upon carts and carried to the
mills or railroad stations.
During recent years hand labor in the fields has been difficult to
secure in Cuba, and since the beginning of the European War the wages of
cane cutters have risen from the usual average of $1.25 to $2.50 and
even as high as $3.00 a day. Cuba has never had a sufficient amount of
resident labor to handle her enormous crops of sugar. Thousands of men
are brought to the Island annually, from Spain, the Azores, the Canary
Islands, Venezuela, Panama and the West India Islands. Most of these
laborers return to their homes at the end of the season, as they can
live there in comfort upon the money earned until the next cane-cutting
season. A machine for cutting cane, to do the work of forty men, has
been invented and in 1918 received practical trial, which is said to
have been fairly satisfactory. It is possible that this and other labor
saving machinery will soon be perfected so that the large number of
field hands now required may thus be replaced, to some extent, and the
cost of cane culture and cutting correspondingly reduced.
Heavy two wheeled carts, drawn by from four to eight oxen, are still
generally used to convey the cane from the fields to the mills or
railroad stations. Plowing, also, is done largely with oxen, although
these are being replaced on the more modern and up to date estates by
traction engines hauling gang plows, and by motor driven trucks for the
transportation of the cane. One of the latter, which was first used in
1918, is provided with several light steel demountable bodies, that are
dropped at convenient places through the cane fields, where they are
loaded and then drawn up again upon the frame of the truck by the power
of the motor. The load of cane is then carried to the mill or loading
station, and the empty body brought back to the field for reloading.
Meanwhile other bodies have been loaded with cane, and the operation is
repeated. Other experiments are being made with trucks of the ordinary
type, mounted upon low wheels carrying so called caterpillar belts, so
that they may be used in wet weather and on soft ground. These
contrivances have not, however, eliminated the ox cart, which still
hauls from the fields over ninety per cent of the cane produced in Cuba.
Labor plays an important part in the cost of producing sugar in Cuba and
largely determines the profits of the industry. In 1914 the cost of
producing a pound of sugar, in most of the well located and otherwise
favorably conditioned mills in Cuba, was estimated at about two cents;
and in some of the exceptionally favored mills even this figure left a
margin of profit. But with the rapid rise in wages following the
outbreak of the European War, and the consequent increase of expense of
cultivating, cutting and handling cane, the cost of making sugar has
become increasingly difficult to determine, as the wage rate may vary,
both from day to day, and also in the different sections of the island,
where labor may be scarce or plentiful.
The urgent demand for sugar brought about by the European War caused
many fields to be planted with cane the soils of which were not suited
for the purpose. Mills were also erected at several places in districts
not favored by nature for sugar production. Later, when the selling
price of sugar was fixed by the Sugar Commission appointed for that
purpose, these less fortunately situated mills, compelled as they were
to pay practically double the usual amounts for labor, found little if
any profit remaining at the end of the year’s operations. Those mills
favored by fertile lands and good locations yielded and continue to
yield excellent returns upon the capital invested, in spite of the
increased cost of labor.
In Cuba two altogether different methods are employed for planting,
cultivating, cutting and delivering cane to the mills or loading
stations, known, respectively, as the “Administration” and the “Colono”
systems. Under the Administration system the work is directed by the
management of the enterprise, and all labor and other expenses involved
are paid by the owners of the property. Less than ten per cent of the
cane annually produced is grown and delivered by this system. More than
ninety per cent is, therefore, grown and delivered by the Colono system,
which constitutes the distinctive feature of Cuban agriculture so far as
it relates to the production of sugar. The system differs from the usual
tenant-farming system in that there is no agreed sharing of the crop or
fixed cash rental paid by the Colono to the landlord, in cases where the
Colono is not himself the proprietor of the land in question. The system
applies alike to lands owned by the enterprise, privately owned, or
leased by the enterprise or the Colono; the terms and conditions varying
slightly in each case. By a process of bargaining, based upon local
conditions, the Colono gets from 4-1/2% to 8%, with a probable average
of 6-1/4%, of the weight of cane grown and delivered, in sugar, or its
value in cash. That is to say, for every 100 pounds of cane grown and
delivered by him he would get an average of 6-1/4 pounds of sugar, or
its market value, in cash. Deducting the 6-1/4 pounds, paid as an
average to the Colono, from the 11-1/4 pounds, given as the average
yield of sugar, leaves only 5 pounds to the enterprise, out of which all
expenses must be paid before profits or dividends can be shown.
Moreover, under this system, any reduction in the yield of sugar would
fall entirely upon the enterprise until it reached the 6-1/4% payable,
on an average, to the Colono. As an illustration, take the crop of 1918
and 1919, amounting to 4,000,000 tons of sugar; about 2,222,225 tons
went to the Colono, to cover the “cost of cane,” while only 1,777,775
tons went to the enterprise to cover all other expenses and provide for
dividends upon the capital invested: and, should the yield of sugar have
fallen one per cent, equivalent to 355,555 tons, the Colono would have
received the same, while the enterprise would have received only
1,422,220 tons--and so on, until the enterprise would get nothing at
all, although the earnings of the Colono would remain unchanged.
The system is, therefore, well named, for the Colono receives first
consideration, while the enterprise carries the burden and accepts all
risks; against which the advantage of a possible abnormal yield is
certainly an inadequate compensation. Furthermore the mill owners
generally assume the burden and risk of “financing” their Colonos;
frequently advancing credits of from three to five times the amounts
contributed by the Colono himself. However, with all its disadvantages,
the Colono system is likely to prevail for some time to come, as it is
doubtful if, under existing labor conditions, the large tonnage of cane
now required could otherwise be obtained. The “guajiro,” or cane-cutter,
is the autocrat of the situation; he knows he is scarce and, therefore,
believes that he is indispensable. As a result, his efficiency has
fallen from three and a quarter to two and a quarter tons a day; while
his earnings, on a tonnage basis, have risen from 150% to 200%, when
compared with pre-war conditions. The only solution for this unfavorable
situation seems to depend upon the provision of continuous employment
for labor, and the effecting of a rearrangement of the Colono system so
as to permit of the performance of all heavy work, such as plowing and
preparing the lands for planting, and hauling the cane from the fields,
by the owners of the sugar-producing properties. They can afford to
equip their establishments for the doing of such work upon a large and
comprehensive scale, that will accomplish an indirect reduction in the
present cost of producing and delivering cane to the mills, which, while
increasing the profits of the Mill Owners, will not reduce the net
earnings of labor or of the Colono.
Natural conditions combine to favor the production of sugar in Cuba.
Ample rains, so essential to the growth of cane, fall during the summer
season while the cane is growing; and during the rest of the year the
weather is sufficiently cool to bring about the complete ripening of the
cane and the formation of its sucrose content, and to make possible the
easy harvesting and handling of the cane in the fields, and its
economical conveyance to the “centrales.” Careless and uneconomical
methods have heretofore prevailed in the treatment of soils and in the
cultivation of cane, which will undoubtedly be remedied in due course of
time.
Under a more intensive system of cultivation, assisted by a better
selection of seed, and the judicious and generous employment of
fertilizers, including irrigation, wherever practicable, the position of
Cuba as the largest and most economical producer of sugar in the world
will be permanently assured.
No account of the sugar industry of Cuba would be complete which failed
to make special mention of some of the most notable enterprises now
existing in that Island; or of the men mainly responsible for their
inception and development. Taking them in the order of their productive
capacity, the following list covers the most important of such
properties:
_Mills_ _Bags_ _Percentage_
_Controlled_ _Produced_ _of Crops_
Cuba Cane Sugar Corp 17 4,319,189 15.59
Cuban-American Sugar Co 6 1,938,368 7.00
Rionda Properties 7 1,856,563 6.60
United Fruit Co 2 776,045 2.80
Atkins Properties 4 736,043 2.66
Poté Rodriguez Properties 2 625,054 2.29
West Indies Sugar Finance Corp 3 619,204 2.23
Gomez-Mena Properties 2 605,000 2.19
Cuba Company Properties 2 587,800 2.12
Mendoza-Cunagua Property 1 452,583 1.64
The Cuba Cane Sugar Corporation was organized in 1915, to acquire and
operate eighteen sugar properties upon which options had been obtained
by Don Manuel Rionda, head of the long established sugar brokerage firm
called the Czarnikow-Rionda Company, of New York City; who, though for
many years a resident of the United States, still clings to his Spanish
citizenship. Shortly after the organization of the corporation another
large sugar property, including a railroad leading to a port on the
Caribbean Sea, was acquired; but soon thereafter one of the original
properties purchased was sold and another was dismantled, so that
seventeen is the actual number now owned and operated by the
corporation. Mr. Rionda deserved and received great credit for having
negotiated, organized and launched the Cuba Cane Sugar Corporation, as
and when he did; and the great success which almost immediately attended
its consummation brought him great prestige and made him at once a
dominant factor in and authority upon matters relating to sugar. It is
immaterial that the eminence achieved was due largely, if not entirely,
to the successive rises in the price of sugar, which applied especially
to the crops of 1916, 1917 and 1919; for nothing succeeds like success.
The Cuba Cane Sugar Corporation was organized and financed upon the
strength of a letter written by Mr. Rionda to Messrs. J. & W. Seligman &
Co., of New York, on December 16, 1915, in which he made an “estimate
that, with sugar at the lowest, say 2 cents per pound, the Corporation
would earn at least 1-1/2 times the dividends on its preferred stock.”
The f. o. b. production cost for the crop of 1915 and 1916, immediately
following, was reported as 2.748 cents per pound, notwithstanding the
fact that the sellers of the properties acquired had paid the so-called
dead season expenses. It is clear, therefore, that, “with sugar at its
lowest, say 2 cents per pound,” the first year’s operations of the
corporation would have shown an operating deficit of 0.748 cents per
pound, instead of earning “at least 1-1/2 times the dividends on its
preferred stock,” as estimated by Mr. Rionda. The large gross operating
profits reported for the first year’s operations were, therefore, due in
part to the exclusion of the dead season expenses, but mainly to the
rise in price of sugar, from 2 cents per pound in July, 1915, to an
average of 4.112 cents per pound during the crop season of 1915 and
1916. Such profits might possibly be creditable to Mr. Rionda’s business
acumen, but it cannot be justly claimed that they were due to the
infallibility of his original estimates, or to his demonstrated
administrative capacity for the successful handling of so large and
complex an enterprise, the physical conditions of which make
administrative co-ordination extremely difficult and expensive.
Nevertheless, he has profited by the experience of succeeding years, and
shows an increasing capacity for coping with the numerous and
complicated problems involved in the administration of the largest sugar
producing enterprise in the world; and it is generally conceded that the
abnormally large profits now earned by the corporation, as the result of
further rises in the price of sugar, will provide for the readjustments
of and cover the improvements to the various properties comprised, that
are necessary to put the property, taken as a whole, upon an absolutely
satisfactory and permanently impregnable footing, physically and
financially. This goal is known to accord with Mr. Rionda’s ardent
desire, as constituting the consummation of his most commendable
aspirations, and the crowning glory of his achievements. It is intimated
that he will then, and not until then, retire from the field of his
activities, in which he has played so conspicuous a role.
The Cuban-American Sugar Company was incorporated in 1906, as a holding
company, to acquire the entire capital stock of five independent
companies then engaged in the cultivation of sugar cane and the
manufacture of raw and refined sugar in the Island of Cuba. Other
properties were acquired in 1908, and again in 1910, including a
refinery located at Gramercy, Louisiana. On September 30, 1918, the
Company owned 504,391 acres of land, of which 157,000 acres or 31 per
cent were planted with cane. It also leased 16,713 acres of land, of
which 7,825 acres or 47 per cent were under cultivation. Thus there was
a total of owned and leased lands of 521,104 acres, of which 164,825
acres or 32 per cent were producing cane. The Cuban-American Sugar
Company was for years the largest sugar producing enterprise in the
world, until the organization of the Cuba Cane Sugar Corporation, which
alone out-ranks it. It has grown out of the Chaparra Sugar Company, now
one of its subsidiary companies; which was organized shortly after the
conclusion of the Spanish-American War by State Senator Robert B.
Hawley, of Galveston, Texas, who at the very beginning employed as his
confidential representative and manager of the Chaparra property General
Mario G. Menocal, now President of the Cuban Republic but still regarded
as the actual General Manager of the Cuban-American Company’s properties
in Cuba. The capabilities, enterprise and industry of these two men, and
the warm personal as well as cordial business relations established and
maintained between them, made it not only possible but easy for each to
supplement and co-operate with the other; and to those conditions the
great success of the Cuban-American Sugar Company is attributed. While
it is true that this Company, like all others, has profited greatly by
the high prices resulting from the War, it is also true that the
foundations of the success that has been attained by it were laid by the
courageous enterprise and perfected by the untiring industry of Mr.
Hawley, made effective in Cuba by the energetic and loyal co-operation
of General Menocal and his large following of patriotic Cuban compadres,
without whose assistance no sugar producing enterprise in Cuba has ever
been or will ever be a complete success. Indeed it is largely because of
the wise recognition of and sympathetic relations established with the
Cuban people by Mr. Hawley that the securities of the Cuban-American
Sugar Company are quoted in the markets of the world at higher figures
than those of any other sugar producing enterprise.
The Rionda Properties are seven in number, comprising five estates which
are in effect the personal property of Don Manuel Rionda, his relatives
and family associates, and two others in which he is the controlling
factor. All of these properties are operated as separate and independent
units, or as individual or one-man enterprises, in the development and
supervision of which few have equaled and none have been more successful
than Mr. Rionda. Part of this success has been due to the fact that
during the creative period these independent properties have been as a
rule under the management of members of his own family, prominent among
whom were two nephews, Don Leandro J. Rionda and Don José B. Rionda,
both capable men, who grew up with the properties they came to
administer, thus acquiring that close personal touch with employees and
conditions which is so desirable an asset, but which is unfortunately
lost to the larger enterprises, and who rendered to their uncle, Don
Manuel, the loyalty he had inspired in them and so richly deserved at
their hands. In such circumstances it is not to be wondered at that
success of a high order has attended their co-operative efforts. Mr.
Rionda has no children of his own and it is probably for this reason
that so close an affection and so intimate business relations exist
between him and his two nephews and the fine sugar producing properties
they have developed under his auspices.
The United Fruit Company entered the sugar business through an accident;
and yet it is the only company that combines all the essentials for
producing, transporting and refining sugar. Shortly after the conclusion
of the Spanish-American War, the Company acquired the Banes property,
and also a large tract of land on the Bahia de Nipé, now known as the
Nipé Bay property, upon both of which bananas were planted on an
extensive scale. But it was soon discovered that atmospheric conditions
in that part of Cuba were unfavorable to the successful production of
bananas. Therefore in order to utilize the lands which it had acquired
the Company planted them with cane and began the production of sugar; it
was of course already a transportation company; and now it has built a
refinery in Boston, to which its raw sugar is shipped from Cuba on its
own steamers, and there refined; thus completing the cycle of operations
from planting the cane to marketing the product. No other sugar
producing enterprise has ever gone into the business upon such
comprehensive lines. Such however are the lines upon which everything
undertaken by Andrew W. Preston and Minor C. Keith, the directing
geniuses of that company, is planned and projected; which largely
accounts for the enviable success that has always crowned their efforts.
The Atkins Properties comprise one property belonging to Mr. Edward F.
Atkins, of Boston, who is reputed to be the first American to have
acquired a sugar property in Cuba, and three others belonging to or
controlled by the Punta Alegre Sugar Company, the most active
personality connected with which is Mr. Robert W. Atkins. The Punta
Alegre Sugar Company was incorporated, in 1915, as a holding and
operating company, engaged in the business of owning and operating
sugar plantations and factories in the Island of Cuba. It owns and
controls 40,831 acres and leases 25,717 acres of land; and is reported
to be doubling the capacity of its central at Punta Alegre. Credit for
the suggestion and initiative that resulted in the combination of these
properties and the organization of this Company is generally given to
Mr. Ezra J. Barker (Ray Barker) of New York, and Major Maude, a retired
British Army officer who for many years has resided in Cuba. The
prestige and financial standing of the officers and directors of and of
the capitalists interested in the Punta Alegre Sugar Company and the
Atkins Properties is sufficient to guarantee the successful operation of
these properties.
The Poté Rodriguez Properties are the personal property of Don José
Lopez Rodriguez, who is a Spanish subject residing in Havana, and known
to every body as “Poté.” Some say that this nickname is an abbreviation
of the word “poder,” or “power.” Certain it is that Don Poté Rodriguez
is, in fact, a human dynamo, the very embodiment of power and push.
Beginning as a book-seller, stationer and printer, on Obispo Street,
Havana, where he still conducts that business and makes his
headquarters, he has, in recent years, acquired a controlling interest
in the Banco Nacional de Cuba, a corporation having a capital of
$8,000,000; he has also invested several millions of dollars in an
elaborate suburban annex to the city of Havana, including a large
Portland cement plant; he has contracted to dig the Roque Canal,
projected to drain the Jovellanos Flats and part of the Cienaga or swamp
lands near Cardenas; and he is the sole owner of the Central España, the
pride of his heart, upon which he has worked day and night for years,
hoping to make it the largest producing sugar “central” in Cuba. But
despite his efforts three other “centrales” surpass it in productive
capacity.
The West Indies Sugar Finance Corporation is a protege if not actually a
subsidiary of the B. H. Howell-Cuban-American-National Sugar Refining
Company group, which under the intelligent and experienced direction of
Mr. H. Edson, of New York City, has come to be a factor of prime
importance in the sugar business in Cuba. It is claimed that the tonnage
of cane obtained from the lands of one of the properties owned by this
Corporation in the season of 1918-19 averaged higher than that of any
other sugar producing property in Cuba; and that the average yield of
sugar was as good as the best. The splendidly economical milling plants
at Tinguaro, Chaparra and Delicias were installed under Mr. Edson’s
direction, and it is reasonable to assume that the mills of his own
corporation are equally efficient. Few men interested in the sugar
business in Cuba have had a broader, more varied or more useful
experience; and there are none whose judgment as to the value of cane
lands and sugar properties is more to be relied upon.
The Gomez-Mena Properties were united and built up by Don Antonio
Gomez-Mena, a Spanish subject, who has resided for many years in Cuba,
where he developed a large mercantile business in the city of Havana;
out of the profits of which he began the building of the well known
Manzaña de Gomez-Mena, or Gomez-Mena Block, which has recently been
completed by his heirs; and also acquired and developed the two sugar
properties with which his name is identified, and which are now owned by
his son, Don Andres Gomez-Mena. These “centrales,” known as Amistad and
Gomez-Mena, and located respectively near Guines and San Nicolas, in the
southeastern part of the Province of Havana are of special interest
since on them more clearly than elsewhere in Cuba are practically
demonstrated the benefits to be derived from irrigation and the value of
cienaga or swamp lands when drained and reclaimed. When Señor Gomez-Mena
purchased the properties they were regarded as of little value, because
a large part of the area consisted of swamp lands, carrying an excess of
water, while the balance was composed of higher lands of a character so
dry as to be practically valueless for purposes of agriculture. It was
rightly reasoned that both of these difficulties could be overcome. So
the wet lands were drained and the dry lands were irrigated; with the
result that these two properties are now regarded as among the most
profitably productive sugar estates in Cuba; relative areas, of course,
being taken into consideration.
The Cuba Company Properties were developed by Sir William C. Van Home
for the purpose primarily of providing traffic for the newly constructed
Cuba Railroad; which fact accounts for their location along that line,
remote from shipping ports, at a time when more desirable locations
could have been acquired, looked at from the point of view of economical
sugar production. Nevertheless both of these properties seem to have
paid well upon the capital invested in them, while at the same time
contributing handsomely to swell the revenues of the Cuba Railroad; all
of which speaks well for the sagacity and enterprise of Sir William Van
Home, and increases the credit to which he is justly entitled.
The Mendoza Cunagua Property differs from all other sugar producing
properties in Cuba in that it was projected, developed and built up as a
complete whole, from start to finish, by a group of Cuban capitalists
dominated by members of the well known and highly respected Mendoza
family; the most active personalities in the enterprise being Don
Antonio and Don Miguel Mendoza. Considered in every feature and detail,
the Central Cunagua Property is probably the most complete and most
perfectly appointed and equipped cane growing and sugar producing
establishment that was ever created as the result of one continuous and
comprehensive effort; Don Antonio Mendoza having the credit for its
accomplishment. At Cunagua more than any where else in connection with
the growing of cane and the production of sugar does the human equation
receive prime consideration, as compared with the beasts of the field,
or the machinery of the factory; all of which are, however, looked upon
as assets and are well cared for. So well and thoroughly, indeed, was
all of this planned and accomplished, and so promisingly did everything
point towards a future rich with reward, honestly earned and well
deserved by the creators of this splendid property, that it is in a
sense regrettable to have to add that the Central Cunagua Property has
recently been sold to the American Sugar Refining Company of New York
City; which company has also acquired additional lands in its vicinity,
upon which a duplicate of the Central Cunagua will be installed.
There are many other meritorious cane growing and sugar producing
enterprises in Cuba, that are deserving of consideration; but which
cannot be satisfactorily described within the space here available for
the purpose. It must suffice to add that of the total sugar produced in
Cuba during the season of 1918 and 1919, amounting to 27,747,704 bags,
13,587,733 bags or 49.04 per cent were produced by sixty-five properties
owned or controlled by American interests, and 14,159,971 bags or 50.96
per cent were produced by one hundred and thirty-one properties owned or
controlled by Cuban and European interests. It may not be amiss also to
call attention to the fact that the sugar crop of Cuba, for the season
of 1918-19 amounted to nearly one-fourth of the total sugar production
of the world. If allowance is made for the normal average increase in
consumption of sugar, as indicated by experience during the fifteen
years just before the European War, the world’s production of sugar for
the year 1919 should have been 21,813,551 tons, while in fact it
amounted to only 16,354,580 tons. This shows that the actual net
shortage in the world’s production of sugar amounted to 5,458,971 tons
instead of the 2,342,751 tons commonly mentioned, the latter figures
representing only the difference in production between the years 1914
and 1919. This indicates that there are no grounds for apprehension on
the part of anyone contemplating investing in desirable property in
Cuba, as to the world’s production overtaking the world’s consumption of
sugar for a number of years to come. The economic position of Cuba as
the premier sugar-producing country of the world may therefore be
confidently regarded as secure.