THECUBAREVIEW 27 



Cuba 7? 7?.— The not income of tlie Cuba RR. for the year ended June 30, 1917, after 

 providing for its fixed charges was ^793,816, against §2,545,415 the previous year. This de- 

 crease was caused by tlie ahnost complete stoppage of trafhc in February and Mardi, and by 

 the partial stoppage of traffic in April and May. No dividend was declared on the common stock 

 of the Cuba RR. (sec also that comjjany's report below.) 



In order to enable the Cuba RR. to carry on the various improvement works necessary 

 for the satisfactory handling of the increased traffic, your directors on May 9 authorized the 

 purchase of 5,500 shares of the Cuba RR. common stock at par. The Cuba Co. now holds 

 155,500 shares of this stock, which is carried in your balance sheet at par. 



Sugar Mills. — The decrease in the profits of your two sugar mills is due to the enforced 

 suspension of operations by the mills during the revolution and to the loss of cane burned. The 

 capacity of your Jobabo mill had been largely increa.sed by an expenditure of ?203,435 in ad- 

 ditional rolls and other improvements, while .^254,804 had been expended in new plantings, 

 plantation railroads and various other works, and it was confidently expected that Jatibonico 

 would produce 300,000 bags and Jobabo 400,000. 



The actual production of Jatibonico was 155,676 bags, practically a half crop. Opera- 

 tions were entirely su.spended for over one month, and on account of the large quantity of cane 

 destroyed it was only possible to resume grinding at a greatly reduced output. Your Jobaba 

 mill had produced 80,754 bags up to February 13 when the revolution broke out and the mill 

 was completely isolated. Practically all the standing cane was destroyed a few weeks later 

 and much damage done to the offices and buildings at the mill and in the plantations. On 

 this account grinding could not be resumed and the Jobabo crop was finished with an output of 

 80,754 bags. 



Thus not only was the output of the two mills enormously reduced, but the cost of produc- 

 tion per bag was on this account higher than it would have been had the mills worked right 

 through the crop to full capacity. The increased price of labor and materials also added to the 

 cost of production, while the prevailing high rates on ocean freight added to the .shipping ex- 

 penses. 



Losses.— The total loss suffered at Jatibonico was $777,465, of which $346,134 represents 

 the loss of profit on the company's cane destroyed and $378,993 additional loss of profit arising 

 from the stoppage of the mill; the balance, $52,338, represents sundry property stolen or des- 

 troyed. At the Jobabo mill and plantations the total loss suffered was $3,509,084. of which 

 $2,008,827 represents loss of profit from the company's cane destroyed and $1,009,007 ad- 

 ditional loss of profit from stoppage of the mill; of the balance $298,612 represents permanent 

 damage suffered by the cane and $192,638 damage done to the company's buildings and other 

 properties at the mill and in the plantations. 



Your Van Home plantation suffered to the extent of $39,194, representing the value of 

 buildings and other property destroyed, cattle and supplies stolen and cane fields damaged. 

 At this plantation there was expended during the year $156,872 in new plantings, railroad 

 construction and other general development work. It was not possible to harvest any of the 

 cane this year on account of the unsettled conditions prevailing in that district, and the cane, 

 of which only a small portion was destroyed, will be held over until next crop. 



Thus the total loss of operating profit for the year amounted to $3,742,961, in addition to 

 which there was a capital loss in property destroj^ed amounting to $582,783, or a total of $4,- 

 325,743. Statements of these losses have been prepared and deposited with the Cuban Govern- 

 ment as the basis of a claim for reimbursement. 



Reconstruction.— Outlook.— Good progress has been made at both mills in the reconstruc- 

 tion of the buildings and other structures destroyed, and preparations are well advanced to 

 insure a satisfactorj' crop at both mills next year. Every effort is being made to keep the 

 burned cane fields at all plantations well cleaned so that they may give a good jaeld. 



While the total losses suffered were very' large, the capital loss in property destroyed was 

 comparatively small and that portion of the damage is being rapidly restored, so that, al- 

 though the results of the year are very unsatisfactorj-, it should be borne in mind that a large 

 portion of the loss represents a loss of profit for the year only, and does not affect the intrinsic 

 value of your properties, or the outlook for future j-ears. 



Sales.— AM of the sugar and molasses on hand have now been sold at very satisfactory prices 

 and are carried at prices actually obtained. 



