CUBA’S SUGAR INDUSTRY
The one and a half billion inhabitants of the earth consume
32,000,000,000 pounds of sugar yearly. The distribution of this enormous
quantity is, however, far from even, some countries accounting for next
to none of it, while in several others the average consumption exceeds
fifty pounds for every inhabitant. Strangely enough, some of the oldest
peoples, to whom the knowledge of manufactured sugar is a matter of
immemorial possession, are only now beginning to develop a sweet tooth.
This may be said of the Chinese and the various races of the Philippine
Archipelago.
The rapid growth in the world’s population naturally accounts for a
constant increase in consumption, but it is also greatly enhanced by the
increase in individual use. In the United States, for example, the per
capita consumption has risen eight pounds in the past few
[Illustration: HARVESTING THE CANE.]
years. We now dispose of eighty pounds of sugar annually for every soul
in our population, while twenty years ago the average was little more
than fifty pounds. This consumption takes no account of the large
quantity of confections, especially chocolate, imported into the country
in a manufactured condition. Only in Great Britain are the figures
higher than with us. There they rise to one hundred pounds. Denmark
comes next with seventy-five pounds, then Switzerland, with sixty.
Thrifty Germany, which produces the largest beet crop in the world, and
in fact controls the world’s sugar market, uses very little of the
commodity itself. Its per capita consumption is only forty-two pounds,
being about the same as that of Holland. Italy, Rumania, Bulgaria, and
Servia, each consumes less than ten pounds of sugar per head of its
population, the poverty of their peoples doubtless accounting in the
main for the small figures.
Sugar in some form has been used by the inhabitants of the globe from
the earliest times. Until the fifteenth century before Christ, the chief
source of supply was honey. It was at about that time that the value of
cultivating the wild sugar cane was discovered in India, and it is
probable that the first manufacture of sugar in any manner should be
credited to that country. For many centuries, only the raw juice was
expressed, until about 700 B.C. the employment of fire in concentrating
it came into use. From India the art spread rapidly among the ancient
nations, but did not reach Western Europe until several centuries later.
Columbus carried sugar cane from the Canary Islands to the West Indies,
whence it extended to the mainland, and thus, in a progress of three
thousand years, encircled the earth.
The production of sugar in the New World became so great within a
century after its introduction, that the importers of Europe turned to
it for the supply which they had formerly received from the Orient.
Spain, Italy, and Egypt, large producers of sugar at that time, could
not meet the competition with the American output, and soon ceased to
cultivate cane commercially. Free land and slave labor enabled the
planters of the West Indies to sell sugar at lower figures, with larger
profit, than could the growers of any other part of the world.
To-day sugar is produced under the most diversified conditions and in
the most scattered regions. In many countries, such as India, Malaysia,
and the Philippines, cane is raised and sugar manufactured by the
crudest processes, with the cheapest labor. The product is low grade and
the extraction small. In other countries, such as Hawaii and Cuba, the
most improved methods are employed, and skilled labor engaged at high
wages.
The competition between cane-producing countries is so great that a
moderate advantage gained by one will sometimes destroy the industry of
another. Such was the case when our reciprocal tariff arrangement with
Cuba resulted in closing the mills of Jamaica. In recent years the
keenest rivalry has existed between cane and beet sugar. At first the
latter had great difficulty in forcing a place for itself in the world’s
markets, but with government subsidies, improvement in cultivation, and
economies in manufacture, it gradually became an irresistible competitor
of cane. During the past fifteen years beet sugar has come to the front
with great strides, and now it divides the world’s consumption with the
cane product.
Cuba produces considerably more than one-fourth of the entire cane sugar
of the world, devoting two million acres to the crop. More than
four-fifths of this area is in the provinces of Santa Clara, Matanzas
and Oriente. The Island’s output in recent years has been about
11,500,000 tons a year, yielding somewhat more than 1,000,000 tons of
refined sugar. Enormous as is this production, it falls far short of the
quantity that could be produced if larger areas of the available
suitable land were put under cultivation and if such scientific and
intensive methods as prevail in some other countries were employed.
Sugar cane was probably first grown in Cuba some time about the middle
of the sixteenth century, under the encouragement of a royal bounty. The
industry made but slow progress during the next two and a half
centuries. In 1850, the sugar production of the Island had reached
approximately 300,000 tons. Since then it has steadily increased, the
million mark having been attained in 1894. During the latter half of the
nineteenth century a tendency to centralization set in. Previous to that
period the crop had been raised on a large number of small plantations,
each working entirely independently. In 1880 began the movement toward
the establishment of “centrals” for
[Illustration: CENTRAL PROVIDENCIA.]
the performance of the extractive operations. There are now nearly two
hundred of these buildings in the Island. At the same time the
combination of small plantations resulted in a decrease in numbers with
an increase in average size.
The million ton mark gained in 1894 was upheld in the following year,
but in 1896 the war was in full blast, and the year’s output was barely
more than 225,000 tons.
During the last war of independence the sugar plantations throughout
Cuba were either utterly ruined, or severely damaged. Since the war, the
industry has been resuscitated by the investment of vast amounts of
money, the erection of modern buildings, and the installation of the
latest types of machinery. As a considerable proportion of this
investment was American money, American methods have been extensively
introduced. The result of all this is a complete reformation of the
industry in all its branches. There is, nevertheless, room for further
improvement, especially in the field. A better quality of cane might be
secured by intelligent selection, and the invention of a harvester would
result in a great economy.
The latter-day sugar plantation is a very extensive establishment and
costs from five hundred thousand dollars to several millions. One of the
largest and most complete in Cuba is that called the Central Preston,
belonging to the Nipe Bay Company, and situated on Nipe Bay. The
factory, according to the latest method, is erected close to the wharves
at Punta Tabaco. Thence the cane lands extend inland and along the shore
for twenty-five miles.
The present grinding capacity of three thousand eight hundred tons of
cane a day is shortly to be increased to five thousand tons, when the
factory will be the largest in the world.
The main building, entirely of steel construction, has a frontage of 312
feet and a depth of 234 feet on one side and 330 feet on the other.
Separate buildings are devoted to carpenter shops, machine shops,
foundry, refrigerating and ice plants.
Besides the usual full equipment of pumps, juice heaters, clarifiers,
filter presses, etc., the factory installation includes ten 600
horsepower vertical water tube boilers with bagasse burning furnaces,
automatically fed by bagasse carriers and the latest improved type of
furnace feeders; two tandems of 36 inch × 84 inch nine-roll mills, with
crushers, each tandem of mills being driven by one 32 inch × 60 inch
Corliss engine and each crusher by one 20 inch × 42 inch Corliss engine.
Two Lillie Quadruple Effects, each of a capacity to evaporate 600,000
gallons, reversible both as to vapor and liquor. Four 14 inch steel
vacuum pans, each equipped with its own vacuum pump and condenser. For
the injection water, three-stage direct connected centrifugal pumps are
used, one of which is a reserve, throwing 3,500 gallons of water per
minute. Twenty-two crystallizers, with an aggregate capacity of 37,400
cubic feet; thirty 40 inch Weston centrifugal machines and the most
improved installation of conveyors, and other auxiliary and automatic
machinery of practical design for the handling of the finished product.
Three molasses storage tanks, of 425,000 gallons capacity each,
accommodate the final molasses thrown off by the factory. These are
situated near the wharf, and from them shipment in bulk is made directly
into deep draught tank steamers.
The company’s railroad is thirty-five miles in length, of standard
gauge, laid in 60-pound rails, and furnished with cars completely made
of steel and having each a capacity of twenty tons.
When it is considered that the entire tonnage of many thousand acres
must be transported within a certain period to a central point, and that
the supply of cane to the factory must be equal and continuous to avoid
the losses that result from retardation or stoppage of the mill, the
great importance of the transportation system on a plantation may be
appreciated.
The modern method of the large central with its immense sphere of
influence, necessitates that the railroad be thoroughly equipped and
efficiently managed. The old practice of carrying the cane from field to
factory in an ox cart has passed into disuse along with the small mill,
and has been superseded by the present railroad, with standard gauge
roadbeds, heavy rails, steel cars, powerful locomotives, and schedule
running, the whole being under the direction of a practical railroad
man, as train despatcher. Although the standard gauge is often used, the
narrow gauge is generally employed. On estates which are a considerable
distance from any trunk line or public road, the latter is preferable on
account of the lower cost with correspondingly smaller car capacity;
while on large estates, where the cars have a capacity of twenty tons or
over, it is necessary to lay the standard gauge road for the greater
efficiency and smaller cost of maintenance.
Opinions vary as to the most convenient and economical size of car to be
used on small and large plantations. It is, however, beginning to be
generally admitted that the larger the car, having in mind the weight of
the rail, the better the results. Experienced constructors are now
recommending a steel frame car, mounted on strong trucks, with automatic
couplers and air brake attachments. A steel car has been found by
carefully observed experience to have a longer life than a wooden one,
since it is in the field the year round, and if it is well painted the
deterioration is much less than with the other style.
Recently, plantation operators have learned that it is a mistake to use
light locomotives with heavy loads. The result is an abnormal
deterioration, while when a locomotive of sufficient power and weight is
used, less trouble is experienced in hauling the train and the wear and
tear is minimized. Up-to-date plantations are furnished with an adequate
round-house, where the engines can be under the eye of an experienced
mechanic, and where repairs can conveniently be made.
Closely connected with the railroad is the telephone system, which is of
great service to the train despatcher, in many instances avoiding
serious delays at the mill. The telephone is also, of course, in
constant use by all branches of the operation.
The method of discharging cane from the cars is very different from the
old slow process, which was akin to that of unloading a hay wagon with
pitchforks. Nowadays an electric overhead travelling crane lifts the
cane from the car, weighs it automatically in suspension, and then drops
it into the cane hopper and elevator.
The tendency of late years has been towards the construction of large
centrals, either by the consolidation of a number of the smaller and
older ones, or by the erection of new sugar houses, thus effecting vast
economies in field transportation and factory labor, and bringing the
cost of maintenance and manufacture to a minimum.
Large centrals necessarily employ a large number of laborers during the
crop season, as well as in the dead season, and in order to make
[Illustration: TRANSFERRING CANE AND AUTOMATICALLY WEIGHING IT.]
them contented and break their former habit of moving from one locality
to another at the prompting of a whim, it has been found advantageous to
provide them with comfortable homes and sanitary surroundings. This
latter-day development is well exemplified in the village of Preston,
attached to the plantation under consideration. The streets are wide and
regular, and each is lined with model dwelling-houses. The sanitary
arrangements are in charge of a specially organized corps of experienced
men. A large and well-equipped school is maintained; there are two
churches of different denominations, besides a well-stocked store, where
goods are sold at cost. The company operates a modern hotel in the
village, where meals are dispensed at small cost to those who prefer not
to cook in their houses.
As each succeeding generation receives educational advantages, it
follows that there is a constantly increasing desire to live on a better
plane and under improved conditions. Therefore the provision of proper
accommodations becomes an economic necessity upon large centrals, where
the supply of labor must be dependable, and can be best made so by
encouraging it to become permanently resident. This system will go a
long way toward tending to solve the labor problem for large
corporations, and deserves the serious attention of all employers of
labor in considerable numbers.
The present method of sugar production distinctly separates the
operations of cane growing and sugar manufacture. The latter involves by
far the greater expense and yields proportionally greater profit. Much
the greater proportion of the skill called into play by the industry is
also applied to the factory operations. It is still the case that some
large estates control and work entire plantations, but there are more
centrals that have nothing to do with the cane until it is cut and
delivered to their cars. In such cases, a number of plantations, large
and small, the average size being about 1500 acres, lie in the vicinity
of the central and furnish its material under contract. The usual
arrangement is to give the cane planter five per cent. of the sugar
produced from his supply.
The workings, costs, and returns, of a moderate-sized mill are shown in
the following statement which was recently formulated by a thoroughly
practical and experienced sugar manufacturer of Cuba.
A mill designed to handle 100,000 bags of sugar in a crop season will
require about $1,000,000 investment, including $150,000 for running
expenses. The area of cane necessary to supply such a mill is 6,000
acres. This, if owned and worked by the mill, would call for an
additional $500,000 investment. As has been said, however, the tendency
is to secure the supply from independent growers, under contract, in the
same way as the beet-sugar mills of our western country deal with the
neighboring farmers. In this case, the planters receive five per cent.
of the cane in sugar, or its equivalent in money. Sugar cane in Cuba
contains from ten to twelve per cent. of sugar, of which the mill
retains five or seven per cent. Plantation and mill management are
generally separated, in few cases combined.
Price of sugar at mill per 325-pound bag $10.27
Railroad freight “ “ “ .56
Wharf expense “ “ “ .025
Ocean freight “ “ “ .39
Landing “ “ “ .055
Duty per pound 1.36 cents “ “ “ 4.42
------
Expense per bag $15.72
The calculation of returns is based on the very conservative rates of
ten per cent. extraction and a price of 2.75 cents per pound. The price
of sugar is subject to great and frequent fluctuations, but there are
mills in Cuba that produce a twelve per cent. average constantly.
The 6,000 acres (180 caballerias) presupposed will produce 325,000,000
pounds of cane, and from this will be extracted 32,500,000 pounds of
sugar, or the equivalent of 100,000 bags of 325 pounds each.
32,500,000 pounds of sugar at 2.75 cents $893,750
Due the planters, 5% of total 446,875
CHARGEABLE TO THE PLANTERS
Expenses per year about $110,000
5% interest on $500,000 25,000
Cutting and hauling 185,000
Loss on transportation, etc. 6,375
Profit for plantation 120,000
--------
$446,375
CHARGEABLE TO MILL
20% expense of yield $180,000
5% interest on $1,000,000 50,000
Net profit 216,875
--------
$446,875
The beet-sugar competition of late years, and particularly that of the
German product which is supported by a bounty, has had a very depressing
effect upon the Cuban industry. This was considerably relieved by the
countervailing duty placed upon bounty sugar by the Dingley Bill of
1894. The effect of this was to place the latter products on exactly
the same footing, so far as the United States market is concerned, as
though they did not enjoy the advantage of a bounty. The competition is
still severe, however, on account of the vast quantity of Germany’s
production and the lower cost of it. This is due, not to cheaper labor,
but to more scientific and intensive methods. In fact, the future value
of Cuban sugar is dependent not upon the cost of producing it so much,
as upon the cost of production in Germany, and the extent to which the
commodity may be admitted duty free into the United States from Hawaii,
the Philippines and Puerto Rico.
On this subject, Mr. E. F. Atkins is quoted as follows in _Industrial
Cuba_:
“With new capital and skill the average cost of production in Cuba can
be reduced, and with either free sugars or a uniform rate of duty in the
United States, assessed upon all sugar (a countervailing duty to offset
foreign bounties being always maintained), she can hold her own and
recover her prestige as a sugar-producing country, but the margin of
profit in sugar manufacture is so small, and the world’s capacity for
production so great, that Cuba cannot recover her prosperity in the
face of any advantage to be given to sugars from other countries
entering the United States. At current prices in Cuba, cane is worth to
the planter the equivalent of $2 to $2.50 per ton net, out of which
price he must pay for his planting and cultivation, cutting and delivery
to the nearest factory or railroad point. As the cost of cane production
consists almost entirely of labor, and wages in Cuba, for some years
previous to the insurrection, ranged about the same in Spanish gold as
similar work commanded in the United States, the profits in this branch
of the business have not been great, and have been dependent upon skill
in management, quality of lands, and proximity to the factories.
“The supply of labor and rates of wages in the future are now most
serious questions to the sugar producer in Cuba, and present the
greatest obstacle to reduction of cost. For supplies of cane the
manufacturer must depend either upon his own resources, or upon large
planters. Factories to be operated at a profit must be kept running day
and night, and cane, owing to its nature, must be ground immediately it
is cut. The grinding season in Cuba
[Illustration: GRINDING SUGAR-CANE.]
is limited to about one hundred and twenty working days, and small
farmers, while they can generally find a market for their cane, cannot
be depended on for a constant regular supply. Had Cuba the power to
dictate her own prices, she could maintain sufficient margin to overcome
local difficulties, but that power has long since passed and future
profits must be dependent upon her economies. The price of cane to her
planters is dependent upon the price at which her manufacturers can sell
their sugar, and this price in turn is dependent upon the price at which
other sugar-producing countries, especially Germany, the great factor in
the world’s sugar trade, can place her goods, duty paid, in New York. If
Cuba in the future should have to compete to any extent, in the United
States, with free sugar from other countries, while a duty was exacted
from Cuban sugar, her case would seem to be hopeless.”
So great is Cuba’s reliance upon her sugar industry that a rise or
falling off in it means depression or elation in every part of the
Island. In 1906, the United States paid to Cuba $72,650,000 for
1,092,180 tons of sugar, and the prices ranged from 3-1/2 cents to
5-1/4 cents per pound. The result was general prosperity and
contentment. Since then the prices have risen and fallen through
frequent changes and a wide range, and they are once more high enough to
make the planter and manufacturer happy. But the average price and
profit for any series of recent years have not been such as to encourage
investment in the industry, and those engaged in it are only too
conscious of the fact that their prosperity rests upon a very unstable
basis. There are those who look for relief of Cuba’s difficulties in the
cessation of the European bounties, and a complete solution of them in
annexation to the United States, but either contingency is a slender
dependence.