The system is, therefore, well named, for the Colono receives first consideration, while the enterprise carries the burden and accepts all risks; against which the advantage of a possible abnormal yield is certainly an inadequate compensation. Furthermore the mill owners generally assume the burden and risk of “financing” their Colonos; frequently advancing credits of from three to five times the amounts contributed by the Colono himself. However, with all its disadvantages, the Colono system is likely to prevail for some time to come, as it is doubtful if, under existing labor conditions, the large tonnage of cane now required could otherwise be obtained. The “guajiro,” or cane-cutter, is the autocrat of the situation; he knows he is scarce and, therefore, believes that he is indispensable. As a result, his efficiency has fallen from three and a quarter to two and a quarter tons a day; while his earnings, on a tonnage basis, have risen from 150% to 200%, when compared with pre-war conditions. The only solution for this unfavorable situation seems to depend upon the provision of continuous employment for labor, and the effecting of a rearrangement of the Colono system so as to permit of the performance of all heavy work, such as plowing and preparing the lands for planting, and hauling the cane from the fields, by the owners of the sugar-producing properties. They can afford to equip their establishments for the doing of such work upon a large and comprehensive scale, that will accomplish an indirect reduction in the present cost of producing and delivering cane to the mills, which, while increasing the profits of the Mill Owners, will not reduce the net earnings of labor or of the Colono.
Natural conditions combine to favor the production of sugar in Cuba. Ample rains, so essential to the growth of cane, fall during the summer season while the cane is growing; and during the rest of the year the weather is sufficiently cool to bring about the complete ripening of the cane and the formation of its sucrose content, and to make possible the easy harvesting and handling of the cane in the fields, and its economical conveyance to the “centrales.” Careless and uneconomical methods have heretofore prevailed in the treatment of soils and in the cultivation of cane, which will undoubtedly be remedied in due course of time.
Under a more intensive system of cultivation, assisted by a better selection of seed, and the judicious and generous employment of fertilizers, including irrigation, wherever practicable, the position of Cuba as the largest and most economical producer of sugar in the world will be permanently assured.
No account of the sugar industry of Cuba would be complete which failed to make special mention of some of the most notable enterprises now existing in that Island; or of the men mainly responsible for their inception and development. Taking them in the order of their productive capacity, the following list covers the most important of such properties:
| Mills | Bags | Percentage | |
| Controlled | Produced | of Crops | |
| Cuba Cane Sugar Corp | 17 | 4,319,189 | 15.59 |
| Cuban-American Sugar Co | 6 | 1,938,368 | 7.00 |
| Rionda Properties | 7 | 1,856,563 | 6.60 |
| United Fruit Co | 2 | 776,045 | 2.80 |
| Atkins Properties | 4 | 736,043 | 2.66 |
| Poté Rodriguez Properties | 2 | 625,054 | 2.29 |
| West Indies Sugar Finance Corp | 3 | 619,204 | 2.23 |
| Gomez-Mena Properties | 2 | 605,000 | 2.19 |
| Cuba Company Properties | 2 | 587,800 | 2.12 |
| Mendoza-Cunagua Property | 1 | 452,583 | 1.64 |
The Cuba Cane Sugar Corporation was organized in 1915, to acquire and operate eighteen sugar properties upon which options had been obtained by Don Manuel Rionda, head of the long established sugar brokerage firm called the Czarnikow-Rionda Company, of New York City; who, though for many years a resident of the United States, still clings to his Spanish citizenship. Shortly after the organization of the corporation another large sugar property, including a railroad leading to a port on the Caribbean Sea, was acquired; but soon thereafter one of the original properties purchased was sold and another was dismantled, so that seventeen is the actual number now owned and operated by the corporation. Mr. Rionda deserved and received great credit for having negotiated, organized and launched the Cuba Cane Sugar Corporation, as and when he did; and the great success which almost immediately attended its consummation brought him great prestige and made him at once a dominant factor in and authority upon matters relating to sugar. It is immaterial that the eminence achieved was due largely, if not entirely, to the successive rises in the price of sugar, which applied especially to the crops of 1916, 1917 and 1919; for nothing succeeds like success.
The Cuba Cane Sugar Corporation was organized and financed upon the strength of a letter written by Mr. Rionda to Messrs. J. & W. Seligman & Co., of New York, on December 16, 1915, in which he made an “estimate that, with sugar at the lowest, say 2 cents per pound, the Corporation would earn at least 1½ 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 1½ times the dividends on its preferred stock,” as estimated by Mr. Rionda. The large gross operating profits reported for the first year’s operations were, therefore, due in part to the exclusion of the dead season expenses, but mainly to the rise in price of sugar, from 2 cents per pound in July, 1915, to an average of 4.112 cents per pound during the crop season of 1915 and 1916. Such profits might possibly be creditable to Mr. Rionda’s business acumen, but it cannot be justly claimed that they were due to the infallibility of his original estimates, or to his demonstrated administrative capacity for the successful handling of so large and complex an enterprise, the physical conditions of which make administrative co-ordination extremely difficult and expensive. Nevertheless, he has profited by the experience of succeeding years, and shows an increasing capacity for coping with the numerous and complicated problems involved in the administration of the largest sugar producing enterprise in the world; and it is generally conceded that the abnormally large profits now earned by the corporation, as the result of further rises in the price of sugar, will provide for the readjustments of and cover the improvements to the various properties comprised, that are necessary to put the property, taken as a whole, upon an absolutely satisfactory and permanently impregnable footing, physically and financially. This goal is known to accord with Mr. Rionda’s ardent desire, as constituting the consummation of his most commendable aspirations, and the crowning glory of his achievements. It is intimated that he will then, and not until then, retire from the field of his activities, in which he has played so conspicuous a role.
The Cuban-American Sugar Company was incorporated in 1906, as a holding company, to acquire the entire capital stock of five independent companies then engaged in the cultivation of sugar cane and the manufacture of raw and refined sugar in the Island of Cuba. Other properties were acquired in 1908, and again in 1910, including a refinery located at Gramercy, Louisiana. On September 30, 1918, the Company owned 504,391 acres of land, of which 157,000 acres or 31 per cent were planted with cane. It also leased 16,713 acres of land, of which 7,825 acres or 47 per cent were under cultivation. Thus there was a total of owned and leased lands of 521,104 acres, of which 164,825 acres or 32 per cent were producing cane. The Cuban-American Sugar Company was for years the largest sugar producing enterprise in the world, until the organization of the Cuba Cane Sugar Corporation, which alone out-ranks it. It has grown out of the Chaparra Sugar Company, now one of its subsidiary companies; which was organized shortly after the conclusion of the Spanish-American War by State Senator Robert B. Hawley, of Galveston, Texas, who at the very beginning employed as his confidential representative and manager of the Chaparra property General Mario G. Menocal, now President of the Cuban Republic but still regarded as the actual General Manager of the Cuban-American Company’s properties in Cuba. The capabilities, enterprise and industry of these two men, and the warm personal as well as cordial business relations established and maintained between them, made it not only possible but easy for each to supplement and co-operate with the other; and to those conditions the great success of the Cuban-American Sugar Company is attributed. While it is true that this Company, like all others, has profited greatly by the high prices resulting from the War, it is also true that the foundations of the success that has been attained by it were laid by the courageous enterprise and perfected by the untiring industry of Mr. Hawley, made effective in Cuba by the energetic and loyal co-operation of General Menocal and his large following of patriotic Cuban compadres, without whose assistance no sugar producing enterprise in Cuba has ever been or will ever be a complete success. Indeed it is largely because of the wise recognition of and sympathetic relations established with the Cuban people by Mr. Hawley that the securities of the Cuban-American Sugar Company are quoted in the markets of the world at higher figures than those of any other sugar producing enterprise.
The Rionda Properties are seven in number, comprising five estates which are in effect the personal property of Don Manuel Rionda, his relatives and family associates, and two others in which he is the controlling factor. All of these properties are operated as separate and independent units, or as individual or one-man enterprises, in the development and supervision of which few have equaled and none have been more successful than Mr. Rionda. Part of this success has been due to the fact that during the creative period these independent properties have been as a rule under the management of members of his own family, prominent among whom were two nephews, Don Leandro J. Rionda and Don José B. Rionda, both capable men, who grew up with the properties they came to administer, thus acquiring that close personal touch with employees and conditions which is so desirable an asset, but which is unfortunately lost to the larger enterprises, and who rendered to their uncle, Don Manuel, the loyalty he had inspired in them and so richly deserved at their hands. In such circumstances it is not to be wondered at that success of a high order has attended their co-operative efforts. Mr. Rionda has no children of his own and it is probably for this reason that so close an affection and so intimate business relations exist between him and his two nephews and the fine sugar producing properties they have developed under his auspices.
The United Fruit Company entered the sugar business through an accident; and yet it is the only company that combines all the essentials for producing, transporting and refining sugar. Shortly after the conclusion of the Spanish-American War, the Company acquired the Banes property, and also a large tract of land on the Bahia de Nipé, now known as the Nipé Bay property, upon both of which bananas were planted on an extensive scale. But it was soon discovered that atmospheric conditions in that part of Cuba were unfavorable to the successful production of bananas. Therefore in order to utilize the lands which it had acquired the Company planted them with cane and began the production of sugar; it was of course already a transportation company; and now it has built a refinery in Boston, to which its raw sugar is shipped from Cuba on its own steamers, and there refined; thus completing the cycle of operations from planting the cane to marketing the product. No other sugar producing enterprise has ever gone into the business upon such comprehensive lines. Such however are the lines upon which everything undertaken by Andrew W. Preston and Minor C. Keith, the directing geniuses of that company, is planned and projected; which largely accounts for the enviable success that has always crowned their efforts.