24 THECUBAREVIEW 



The aforesaid four plantations were cut off from communication while the insurrection 

 lasted. One of them "Lugareno," started grinding January 29th, but was forced to stop opera- 

 tions from February 24th until March 24th by order of the insurrectionists. Its total crop was 

 only 67,000 bags, against an estimated crop of 160,000 bags. 



The actual damage caused by the insurrection to the company was hmited to cane burnt, 

 consequent lower sucrose in the burnt cane, and general disorganization and decrease in the 

 efficiency of the factories. 



It is difficult to figure these losses, but they were small in comparison with other estates 

 in the eastern end of the Island, where many plantations lost the greater portion of the crop. 



The company has presented its claim for damages against the Cuban Government through 

 the proper channels. 



Our properties in the western section of Cuba suffered no damage because of the insurrec- 

 tion. 



Third — Higher rates of wages and war insurance, also the higher price for coal, bags and 

 all other commodities, resulted in increasing materially the cost of production. 



In view of the foregoing unfavorable features, the result for the year must be regarded 

 as satisfactory. 



EARNINGS 



The earnings for the fiscal year ended September 30, 1917, are as follows: 

 Operating profit after deduction of dead season expenses to September 30, 1917 . $1 1,095,531 .35 



Less: 



Interest and exchange $244,042.97 



Reserve for taxes, etc., including income and war excess 



profits taxes (U. S. A.) 1,286,471.00 



Reserve for Bad Debts 500,000.00 



Reserve for Depreciation 1,750,000.00 3,780,513.97 



Balance carried to Surplus Account $7,315,017.38 



During the fiscal year the Company expended in renewals and repairs approximately 

 $1,700,000, which was charged to cost of production, and as a result of these expenditiires the 

 plants are in much better operating condition than they were a year ago. Considering the 

 much higher prices ruling now than two years ago for materials in general and the large amount 

 expended on new machinery by the Company in increasing its capacity, it has been deemed 

 wise to charge off to Depreciation $1,750,000. 



PRODUCTION 



The total production of sugars during this fiscal year was 3,261,621 bags, equal to 472,542 

 tons of 2240 lbs. All of these sugars, with the exception of some $300,000 in value, have now- 

 been deUvered and paid for. 



That the above production is very much less than had been estimated is due to the lower 

 yield of sucrose in the cane and the Cuban insurrection. It is proper to add that the decrease 

 in production was general in Cuba, the total crop having been estimated in December, 1?16, at 

 3,500,000 tons, whereas the actual total was very close to 3,025,000 tons, thus showing a general 

 decrease of 15% in Cuba. 



PROPERTY ACCOUNT 



Pursuant to the plan outlined in last year's report for increasing the capacity of the mills 

 and so raising the operating efficiency of the company to the highest standard, large im- 

 provements in machinery have been made, especially in the eastern plantations, "Moron," 

 "Jagueyal," "Lugareno" and "Stewart." As a result the crop on these estates for the coming 

 year is now estimated at 1,500,000 bags, as against an actual production during 1916-1917 of 

 877,755 bags, an increase of over 70%. 



