Industrial Cuba Part 34

_Baga.s.se_ (dry fibre) 12 pounds Juice 88 "

--- Total 100 "

88 pounds of juice containing 16 per cent. in sugar 14 "

[Ill.u.s.tration: CUTTING SUGAR CANE.]

THEORETICAL PURE SUGAR CONTENTS OF 100 POUNDS CANE

"The practical results are difficult to obtain. The best of work seems to be about as follows:

Per 100 pounds of cane: _Baga.s.se_ 30 pounds Juice (extracted) 70 "

--- Total 100 "

70 pounds of juice at 16 per cent. sugar equal in pure sugar, 11.20"

"This 11.20 pounds of sugar, less loss of working and less the sugar left in the final mola.s.ses, reduced the actual yield to about 10 per cent. of pure sugar, or 10-1/2 per cent. of commercial product, besides the mechanical difficulty of increased impurities, whose ratio increases rapidly with better milling, and the loss of fuel in the _baga.s.se_, which is an important consideration where such loss must be made up by imported coal.

"With 30 pounds of _baga.s.se_ per 100 pounds of cane, no other fuel should be required.

"The difficulty of increasing the sugar contents of the cane comes from the fact that cane, unlike beet, has no seed, and must be reproduced from cuttings.

"Improvement in this line is quite possible, but must come from long years of study and experiment and will require the best attention of scientific minds."

The expert who furnished the above, adds:

"It will seem strange to the uninitiated that the manufacturers can afford to leave any sugar in the _baga.s.se_, if there is any possible method of getting it out; but with low prices for the sugar product and expensive coal it can be seen that there is a point beyond which it may not be profitable to pa.s.s. With cheap fuel and high-priced sugar products, the case might be different."

The second statement, which is at considerably greater length, is by Mr.

E. F. Atkins, who prepared the following especially for this volume:

The total output of sugar in the world was for some years in excess of the requirements for consumption. This over-production and consequent acc.u.mulation of stocks brought prices down to a point which in all probability was considerably below the average cost of production.

Germany, as the largest sugar-producing country, naturally fixes the market prices of the world. The refiner in New York will pay no more for sugars to be shipped from Havana than the equivalent of the price at which he can buy at Hamburg; difference of freight, duties, bounties, and quality, of course, considered.

The present average cost of production of German raw sugar is said to be about 9_s._ per 112 pounds. At this figure the existing bounty upon exports would allow sales for shipment to England, where no duty is paid, as low as 8_s._= $1.71 per pound for 88 a.n.a.lysis beets; this, allowing for difference in values of the two grades, would be equivalent to $1.89 United States currency for 96 test Cuba centrifugals, under like conditions, viz.: f.o.b. at port of shipment, for any country such as England where the two grades enter upon equal terms.

The effect of our countervailing duty a.s.sessed upon bounty-fed sugars under the Dingley Act of 1897, has been to raise the comparative value of cane sugar in producing countries, as against beet sugar, and to place Germany and other European sugar countries in exactly the same condition, so far as the United States market is concerned, as if no bounties were paid by them; thus in considering Germany's compet.i.tion with Cuba in the United States markets, we may eliminate both bounties and countervailing duties as factors, and say that when Germany can sell to England at 8_s._ she must obtain 9_s._ from the United States to give her shippers an equal price; 9_s._ is equivalent to about $2.18 United States currency, for Cuba centrifugals, 96 test, f.o.b. Cuba.

The export price of German sugar at Hamburg from January 1 to June 1, 1898 (a period covering the Cuban sugar crop season), ranged from 9_s._ to 9_s._ 9_d._ with an average of about 9_s._ 4-1/2_d._

Last crop prices gave the Cuban manufacturers an average of about 4-1/2 reals per arroba, say 2-1/4 cents Spanish gold, a price at which they could be laid down in New York slightly under the parity of European beets, duty paid.

The imports of beet sugar from Europe into the United States, from January 1 to June 1, 1898, were 22,000 tons against 496,000 tons for same period of previous year; while imports of cane sugars showed an increase of some 60,000 tons; this change in source of supply being brought about by the countervailing duty.

It is not possible to give any figures of the average cost of production in Cuba. In my opinion it is undoubtedly higher than the average of Germany. Of the 2-1/4 cents net obtained by the Cuban manufacturers, the cane (which is generally purchased upon a sliding scale based upon the current value of sugar) costs them from 1 cent to 1-1/4 cents per pound of sugar according to yield at the various factories. This would leave them but little over 1 cent per pound, average margin, to cover manufacturing expenses, salaries, maintenance and repairs, office expenses, interest, insurance, and freight to seaboard, and while some factories, thoroughly equipped as regards machinery, skilfully conducted as to business management, favourably located regarding inland transportation, and not dependent upon borrowed capital, have shown fair interest returns upon capital invested, very many have been operated at a loss (aside from such losses as arose from the war), and the margin of profit, both past and prospective, is not such as to invite any large investment of new capital in sugar manufacturing.

The future values of sugar in Cuba are dependent, not upon cost of production in the Island, but rather upon the cost in Germany; and upon the extent to which free sugars are to be admitted into the United States from the Sandwich Islands, Porto Rico, and the Philippines. 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, a.s.sessed upon all sugars (a countervailing duty to offset foreign bounties always maintained), she can hold her own and recover her prestige as a sugar-producing country, but the margin of profit in sugar manufacturing 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 net ton, out of which price he must pay for his planting and cultivation, cutting, and delivery to factory or nearest railroad point. As the cost of cane production consists almost entirely of labour, 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 industry have not been great, and have been dependent upon skill in management, quality of lands, and proximity to the factories.

The supply of labour and rates of wages in the future are now most serious questions to the sugar producer in Cuba, and present the greatest obstacle to reducing 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 should be kept running day and night, and cane, owing to its nature, must be ground immediately it is cut. The grinding season in Cuba 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 upon 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 pa.s.sed 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 (princ.i.p.ally Germany, the great factor in the world's sugar trade) can place their 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 upon Cuban sugars, her case would seem to be hopeless.

[Ill.u.s.tration: UNLOADING CANE AT A BATEY.]

Another interesting and valuable statement was prepared for the author by Mr. Wm. Bonnet, of Havana, under date of October 8, 1898, and gives an array of statistical information which is as follows:

The loss to Spain's dominion of the Mexican Territory (1821-1825) deprived the Island of a yearly allowance of about $1,000,000, which amount was drawn out of the Mexican budget for the needs of the Cuban administration. The Island, up to those days, was considered more as a penitentiary than as a productive colony; convicts were sent to Havana with the princ.i.p.al object of building good ships for the Spanish Armada.

It was only after the loss to Spain of Mexico that Cuba began to improve her general production, and the efforts of the country in growing sugar and coffee were so successful that a few years later, with the help of the slaves that were again freely brought from Africa, and with the co-operation of immigrants that had come from Hayti, etc., the Island, besides covering all her expenses, was able to send large amounts of money to the mother country.

From 1840 to 1850, the production of sugar increased gradually from 200,000 to about 300,000 tons. Prices of coffee began to decline owing to excess of production and compet.i.tion of Brazil, and all the attention was given to cane growing, so much so that from 1853 up to 1868, the production was rapidly increased to the following figures:

1853................ 332,000 Tons.

1854................ 374,000 "

1855................ 392,000 "

1856................ 348,000 "

1857................ 355,000 "

1858................ 385,000 "

1859................ 536,000 "

1860................ 447,000 "

1861................ 466,000 "

1862................ 525,000 "

1863................ 507,000 "

1864................ 575,000 "

1865................ 620,000 "

1866................ 612,000 "

1867................ 597,000 "

1868................ 749,000 "

This period of sixteen years was really the so-called Golden Age of Cuba. The Cuban budgets, although heavy at that time, were easily covered, and on this account extra taxes were imposed upon the Cuban people in excess of what the budgets called for and remitted to the mother country; such extra sums reaching as high as $5,000,000 per annum,--an erroneous and fatal system, the consequence of a mistaken policy, which then, as ever, led Spain to consider her colony as a source of income, forgetting that such excessive calls, constantly resulting in a deficit, clearly indicate bad administration.

Cuba was overtaxed and nothing was done to help the growing of our fertile Island. In vain did the Cubans lay their claims for better administration. The mother country was deaf. Commissioners went to Madrid to represent, but they had to return, bringing back only many promises that were never fulfilled. No hope was left to the Cubans, and all these obstinate errors brought on the outbreak of October 10, 1868, which resulted in a civil war that lasted ten years, ending in 1878 with the so-called agreement of Zanjon.

The war at first was not a drawback to sugar production, and the crops gathered during the Ten Years' War were:

Called the { 1869 726,000 Tons.

twin crops. { 1870 726,000 "

1871[15] 547,000 "

1872 690,000 "

1873 775,000 "

1874 681,000 "

1875 718,000 "

1876 590,000 "

1877 520,000 "

1878 533,000 "

It is to be noticed that during the period of war the sugar production continued to increase at first, say from 1869 to 1875. Highly remunerative prices were then obtained for sugar; besides, from 1869 to 1870, $70,000,000 in paper money were issued, and money was easy.

From 1876 to 1878, the production rapidly decreased. Mismanagement, enormous taxes to attend war expenses, and depreciation of paper money brought on national distrust and financial troubles. And with all this, the emanc.i.p.ation of slaves was carried through at that time, moreover, without any compensation of any kind to owners.