The Demise of Cuban Sugar: USA and Communism both against Cuban Interest

Azucar!

“Annexationists prophesied a time when, with Cuba under our flag, we would control the world’s supply of sugar as absolutely as we did cotton.”
- Leland Hamilton Jenks, OUR CUBAN COLONY, A STUDY IN SUGAR, 1928

"The sugar industry-always a parasitical growth-has never been able to pay its expenses with its own resources in normal times. It depended on slavery for its prosperity in former times and now the masked slavery of the West Indian laborers is unable to save it. Some sort of economic euthanasia is needed for industries which have developed into monstrosities as is the case with Cuba's sugar industry."
- Herminio Portell Vilá, Hispanic American Historical Review, 1932

“Our citizens have invested over a billion dollars in Cuba, and own more than three-fourths of the enourmous sugar industry of the Island.”
- Dewin G. Nourse, Institute of Econics, 1932 / Director's Preface to THE CUBAN SITUATIONAND OUR TREATY RELATIONS by Philip G. Wright

“Most of the American-owned Cuban land was not held by homesteaders but by large corporations or small groups of wealthy men. Absentee land ownership was the commonmethod of United States agricultural investment.”
- James H. Hitchman / Journal of Interamerican Studies and World Affairs, Vol. 12, No. 1 (Jan., 1970), 90-106

The Bitter Memory of Cuban Sugar

Sugar has been Cuba's great blessing and curse all at once, just as much as her convenient location and size, her tropical climate and her rich soil.

Legend reveals that on his second voyage to the "new world," Christóbal Colón brought sugar cane cuttings, which were planted and grown by the indigenous Taíno population, who were quickly turned into slaves. The Indies may not have been as full of gold as the Spaniards had hoped, but the islands could still provide a valuable service to the Empire.

The Taínos didn't understand why they had to clear the fields (mostly in the central plains, between Havana and Trinidad, and East towards Santiago) and do without their original crops in order to harvest cane for their new masters.

Eventually the combination of European diseases, forced labor and Spanish cruelty killed off most of the Taíno population, and this lead to the African slave trade, which lasted over three centuries.

In 16th century Cuba, "the chief industry was stock-raising which was followed in all parts of the island," wrote Hubert H. S. Aimes in A History of Slavery in Cuba, 1511 to 1868. "The meat afforded a supply for the shipping and the hides were exported. Honey and wax soon became important. The sugar industry grew slowly and chiefly in the favorable region of Habana, three ingenios being established in its vicinity in 1576. These mills were simple, crude constructions of rollers for crushing the cane moved by cattle or water power. The product obtained by simple boiling in open pans was of a very inferior quality, and was consumed in the island. The ingenios required from eighty to one hundred negroes each."

Large-scale sugar production in Cuba began early in the 19th century. "Sugar quickly became the cornerstone of the Cuban economy," wrote Ramiro Guerra y Sánchez in Sugar and Society in the Caribbean, "and a new class of wealthy planters emerged."

Sugar output was usually measured in sacks of 325 pounds or in tons (2,000 pounds). Cane production was measured per arroba (25 pounds), and land was measured per caballerías (33.6 acres).

By mid-19th century Cuba provided about a third of the world's sugar, and U.S. investors began to make moves on the island. Soon the sugar industry was under their control.

"From the beginning," wrote Guerra y Sánchez, "the sugar mills were extended protection against foreclosure for debt, an extremely important privilege that was considered an indispensable aid to this new industry. For the planting of cane, the Havana Cabildo itself ceded lands, within a radius of eight leagues, that had been reserved for growing food crops. Thus, the first sugar mills were set up very close to the municipal limits and were owned by the wealthiest and most influential colonists."

Centrales, Colonos and the Zafra

In the 1880s the production of sugar in Cuba was reorganized to account for a new economic system that included the end of slavery. An intermediate class of planters emerged, often referred to as colonos. They basically contracted to plant, cultivate, harvest and then deliver the cut cane to the mills, or Centrales, which eventually became huge complexes. Of course, only a small percentage of the former slaves who fought on the war of independence became colonos, as most were white or foreigners. Seasonal laborers and field hands, who worked for wages, were usually out of work at the end of the harvest.

Two types of colonos existed, those who owned their own land, and those who worked land rented or leased. The power, of course, was in the Centrales, who controlled how much the colonos earned from each Zafra. Almost all colonos had difficulty getting by, and most owed money to the Centrales.

[Sidebar: Excerpt from Rural Cuba by Lowry Nelson, on Cuba's Agricultural Seasons]

The "Zafra" months of November to April featured full employment for cane laborers. This is the dry season, when the sugar was harvested and there was plenty of work. This was followed by tiempo muerto, or the rainy season of May through October, when there wasn't much to do on the cane fields. This was the sad reality of the sugar industry in Cuba.

"During the 1890s," wrote Robert B. Hoernel in Journal of Latin American Studies, "Cuban field laborers in the sugar industry received only slightly more than fifty cents a day, but also got quarters in the batey or bunkhouse, free medical care, and a ration of 1 pound of beef, 1 pound of rice, 2 ounces of lard, 1 ounce of coffee, 2 ounces of sugar, and 6 ounces of bread or potatoes daily."

Military Occupation

"For almost four years," wrote Louis A. Pérez, Jr. in Hispanic American Historical Review (1985), "contending forces had laid siege to the largesse of the land, preying upon the bounty of its resources, and practicing pillage of every kind as the normal method of warfare. And when it was over, in 1898, the toll of Cuban independence reached frightful proportions. The fields were blighted; the pastures, barren; and the fruit trees, bare. Agriculture was in desperate crisis in an economy predominantly agricultural. The rich sugar provinces of Havana and Matanzas were each cultivating fully less than one-half of the area in 1899 than they had before the war." (Of the 1,400,000 total acres under cultivation in 1895, only some 900,000 acres returned to production after the war.)

In Pinar del Río, 7 sugar mills survived the war (out of 70). In Las Villas, 332 sugar mills had been reduced to 73. Altogether, Pérez reports "of the 1,100 sugar mills registered in Cuba in 1894, only 207 survived the war."

Brigadier General Fitzhugh Lee, in charge of Havana and Pinar del Río during the occupation, reported to militaryGovernor Brooke about conditions in September 1899; "Business of all sorts is suspended. Agricultural operations have ceased; large sugar estates with their enormous and expensive machinery are destroyed; houses burned; stock driven off for consumption by the Spanish troops or killed."

All over the island, Cuban property owners were in debt, without the ability to obtain capital or credit. Some had been in debt since before the war.

On January 1 1899, Military Governor John R. Brooke pledged resources, but they never materialized. Instead, a series of military orders seemed to help foreign investors.

In April 1899, Military Order #46 allowed for a two-year moratorium on the collection of debts. This gave Cuban farmers and planters some breathing room, but it didn't help them out of their situation, as they were unable to get their plantations going without financial help. "Direct aid to planters," wrote Perez, "was not part of the United States' design for the postwar reconstruction of Cuba." In October 1899 Military Governor Brooke stated that "the conclusion was reached that aid could not be given in this direction."

When Military Order #46 expired in April 1901, the condition of Cuban planters had not improved. "Our condition is worse today," wrote Santa Clara planter Francisco Seigle to Elihu Root (the U.S. Secretary of War) on October 3 1900. "These properties cannot be made productive without capital."

The capital seemed to be in the hands of foreign investors, most of them from the United States. Only weeks before the expiration of Military Order #46, Perfecto Lacosta complained, "nothing has been done toward the improvement of our agricultural situation."

Military Governor Brooke's point of view was that Cuba's future's rested on the ability to have a stable government. By stable government he meant, "When money can be borrowed at a reasonable rate of interest and when capital is willing to invest in the island, a condition of stability will have been reached."

"Foreign lenders in particular," wrote Pérez, "and especially United States creditors, were anxious to claim Cuban properties."

Military Order #139, issued in May 1901, formally allowed creditors to collect their debts, regardless of circumstances. According to Pérez, this was "the first of a series of calamities to befall planters during the United States occupation, and its effects were not confined to large planters… The war had been especially hard on small farmers."

"The prospects for indigence and ruin increased considerably with the proclamation of Military Order #139," wrote Pérez. "The fate of the planter class, no less than that of the small independent farmers, was sealed."

Cuban farmers had little recourse but to sell their lands to foreign investors, who found not just land prices to their liking, but the cooperation of the new Cuban government. In 1901, United Fruit was able to purchase 200,000 acres of land in Oriente at $1 per acre.

"The bank that underwrites the cutting of the cane is foreign," wrote Fernando Ortíz, "the cutting of the cane is foreign, the consumers' market is foreign, the administrative staff set up in Cuba, the machinery that is installed, the capital that is invested, the very land of Cuba held by foreign ownership… all are foreign, as are, logically enough, the profits that flow out of the country to enrich others."

This "lopsided" export economy allowed foreigners to control the prosperity of the island. Afro-Cubans were rarely on the profit end of Cuba's sugar industry, and foreigners managed to do quite well. Somewhere in the middle, a few white Cubans managed their own fortunes.

As the country became devoted to sugar, other food items had to be imported, including rice, beans and meat, eggs and poultry, tomatoes, green peppers and cucumbers, which at one time were all grown locally.

During the U.S. military occupation that began in 1898, U.S. business interests invaded the island, and suddenly Cubans had a new "master" forcing a one-crop economy. Sales would be to a single market, and that market controlled not only the price of sugar, but also most of the existing sugar cane farms and distribution channels. It suddenly became more difficult for local planters to revitalize their war-damaged businesses.

In 1899, R.B. Hawley organized the Cuban-American Sugar Company, which established the sugar mill "Chaparra" on 70,000 acres of land in Oriente Province. American businesses man Milton Hershey also purchased land cheaply and built a sugar factory that supplied his Pennsylvania-based chocolate empire.

Another successful American on the sugar scene was James H. Post, who became not only president of theNational Sugar Refining Company of New Jersey, but was director of the National City Bank of New York and also of theAmerican Colonial Bank of Puerto Rico. Post also served as vice president of the Cuban American Sugar Company, which owned a number of sugar mills in the island. He also held other positions in the Cuban sugar industry, such as president of the New Niguero Sugar Company, president of the Guantánamo Sugar Company, director of the Chaparra Railroad Company, director of the West India Sugar Finance Corporation (which also owned 12 mills in the Dominican Republic).

"The beneficiaries of North American rule," wrote Louis A. Pérez Jr. in Cuba: Between Reform and Revolution, "were North Americans." This is further illustrated by the fact that during the second U.S. military intervention in 1906, Military Governor Magoon initiated a program of roads and railroads that was clearly designed to benefit foreign-owned centrales, with expenses of almost $650,000 paid by the Cuban government.

"The Platt Amendment fostered the growth of the industry and American investment in it," wrote Philip G. Wright of The Brookings Institution in The Cuban Situation and Our Treaty Relations (1931). "There was American investment while Cuba was under Spanish control and such investment would doubtless have increased had Cuba remained under Spanish control or had Cuba attained her freedom without American intervention. Yet there can be no reasonable doubt that the Platt amendment, in its essence a guaranty by the United States government of protection of life and property in Cuba, has acted throughout the past quarter of a century as a powerful magnet in attracting American investments to Cuba. A feeling, based on observation and experience, is widespread in the United States that Latin Americans are prone to revolution as a means of settling political differences. Prospective investors know that sugar is a highly inflammable crop, they remember that both the revolution of 1868 and the final War for Independence were characterized by great destruction of sugar properties, and hence when they are weighing in their minds the lure of profit against the hazard of complete loss, the guaranty of the Platt Amendment has a reassuring effect and tips the scales in favor of the investment."

In 1912, companies like United Fruit Company were granted special permission to import workers that would earn less than Cuban workers. They built whole villages on their properties for their employees, who were completely separated from the rest of Cuban society, as they also shopped at their local company-owned store. These "towns" often featured strict racial divisions; Americans lived on one street, white Cubans on another, and so on. After the zafra, some immigrant workers returned to Jamaica and Haiti, but many stayed.

"The twentieth-century sugar mill was a complex entity involving heterogeneous social relations of production in the agricultural phase: wage labor, landlord-tenant relations, and relations between independent or dependent farmers and the mill," wrote Cesar J. Ayala in Latin American Research Review (Vol. 30, #1, 1995). "The larger area of land serviced by the sugar mill complex also contained fallow land, grazing land, and sometimes forest land. In 1913 the aggregate area of Cuban sugar mill complexes totaled 88,000 caballerías. Of these, about 40,000 caballerías were planted in cane, 18,000 by colonos and 22,000 by the mills and their tenants.

"Centrales differed in their origins: some units emerged form the conversion of ingenios into centrals, while others were established on virgin land. In the case of conversion, when a large ingenio was modernized, surroundingingenios were transformed into colonias.

"Typically, the newest mills built by U.S. corporations were established on land previously untouched by plantation agriculture."

The outbreak of World War I brought Cuba out of a depression, as the price of sugar jumped from 2.11 cents per pound in July to 4 cents in August.

The Cuban sugar industry became the major source for the U.S., as sugar beet farms in Belgium and France were destroyed, and other exporters, such as Austria and Germany, cut down their outputs to less than half of normal when their markets disappeared.

In 1920 the European sugar market shrank from 9,088,000 tons in 1913 to 1,801,000. This deficit created a great opportunity for Cuban producers, and output increased from 2,719,961 tons in 1913 to 4,448,389 tons in 1919.

"Between 1912 and 1931," wrote de la Fuente in Latin American Perspectives, "more than 300,000 black workers from Haiti, Jamaica, Barbados, and other Caribbean islands entered Cuba to work in the expanding sugar sector, mainly in the eastern provinces of Camagüey and Oriente, where U.S. capital had developed some of the biggest and most modern centrals on the island."

Another change was taking place, as Eastern Cuba became more profitable for sugar barons than Western Cuba. "In the nineteenth century," wrote Cesar J. Ayala in Latin American Research Review, "western Cuba (Pinar del Río, Havana, Matanzas, and Santa Clara) was the region where independent cane farmers controlled a major share of sugar production. In the east, the newest mills established themselves by purchasing vast land areas in relatively remote zones that became accessible via railway only in the twentieth century. In this region, cane farmers were welcome only as mil tenants, and it fell to the farmers to attract and hire wage labor for cultivating and harvesting sugar." By 1923, he adds, "the eastern provinces of Camagüey and Oriente surpassed the western region in sugar production, and the eastern region finally became the center of twentieth-century sugar monoculture." By 1924, Oriente and Camagüey produced 54 percent of all Cuban sugar.

With the abrogation of the Platt Amendment in 1934, Americans began a steady withdrawal from Cuba's sugar industry, and a small number of wealthy Cubans took over the reigns. The Cuban sugar law of 1934 expanded the Colono system, and their numbers rose after 1935.

historyofcuba.com

Plinthos: The moral of that history is that Cuban Independence resulted in the immediate American usurping of the Cuban Sugar Cane industry. The winner of the Cuban Independence was USA, not Cuba. So it was until the presidency of Ramon Grau San Martín (September 4 1933 - January 15 1934) whose policies tried to reverse that trend and resulted in the abrogation of the Platt Amendment and ultimately in the Cuban Constitution of 1940. Cuban began again to prosper, Cuba for Cuba, until the dictators came.