The History of Cuba Volume V Part 15

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 a.s.sume the proportions for which nature had afforded opportunity. With the emanc.i.p.ation 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 cla.s.s 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, ent.i.tled to serious and careful consideration, have been expressed to the effect that first cla.s.s 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 a.s.sume 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 cla.s.s 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 Ca.n.a.l 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 a.s.suming 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.

a.s.suming 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 ca.n.a.ls 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 const.i.tutes no exact unit of thought or calculation. Let us, however, a.s.sume 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 mola.s.ses 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 acc.u.mulated 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 const.i.tutes 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 ill.u.s.tration, 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 a.s.sume 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, a.s.sisted 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 a.s.sured.

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 Pote 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 ac.u.men, 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 const.i.tuting 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 a.s.sistance 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 a.s.sociates, 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 Jose 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 a.s.set, 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 circ.u.mstances 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 Nipe, now known as the Nipe 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 Pote Rodriguez Properties are the personal property of Don Jose Lopez Rodriguez, who is a Spanish subject residing in Havana, and known to every body as "Pote." Some say that this nickname is an abbreviation of the word "poder," or "power." Certain it is that Don Pote 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 Ca.n.a.l, 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 Espana, 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" surpa.s.s 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 a.s.sume 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 Manzana 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 Senor 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 ent.i.tled.

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 a.s.sets 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 s.p.a.ce 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.

CHAPTER XVI

TOBACCO

This strangely hypnotic leaf of the night-shade family seems to have originated in the Western Hemisphere, and that variety familiar to commerce, known as the Nicotina Tabac.u.m, was in popular use among the aborigines of the West Indies, Mexico and the greater part at least of the North American continent, probably for thousands of years before the written history of man began.

Christopher Columbus and his followers noted the fact that the Indians of Cuba wrapped the clippings from peculiar aromatic dark brown leaves in little squares of corn husks, which they rolled and smoked with apparent pleasure. It did not take long for the Spanish conquerors to fall into the habit of the kindly natives who received them and who almost immediately offered them cigars in token of welcome to the Island of Cuba.