THE CUBA REVIEW 



FIRST ANNUAL REPORT 

 CUBA CANE SUGAR CORPORATION 



FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 1916 



This company was incorporated on December 31, 1915. Its first fiscal period ended on 

 September 30, 1916, comi)rising therefore, only nine months. The i)hintations acquired were 

 all purchased as going concerns and the vendors accounted to the Corporation for all profits 

 from December 1, 191.5 (the beginning of the crop year). The operations of the company for the 

 nine months' period ending September 30, 1916, therefore cover a full grinding season. The 

 1915-16 crop was necessarily made under the management of the various vendors as the prop- 

 erties were taken over at different times during the grinding season, the last plantation not being 

 taken over until April, 1916, although the profits from December 1, were turned over with the 

 property. This fact must be taken into account in judging of the year's results. The earnings 

 for the nine months ending September 30, 1916, were as follows: 

 Operating Profit from December 1, 1915 -SI 4,729,087.59 



Less : 



Interest and Exchange $91,385.85 



Reserve for Taxes, Etc 290;000.00 



Dead Season Expenses at Plantation from completion of Grinding 



to September 30, 1916 918,689.17 



Reserve for Depreciation 1,250,000.00 



2,550,075.02 



Balance being Net Profit $12,179,012.57 



From December 1, 1915, to September 30, 1916, the company expended for renewals and 

 repairs approximately $990,000, which have been deducted before arriving at the net earnings 

 of the period. The expenditure of this smu placed the plants in as good wjrking conditions as 

 when the grinding season started The item of $1,250,000 for depreciation charged to the earn- 

 ings for the year is in addition to the sum of .$990,000 before mentioned. 



By far the greater part of the cane ground at the company's mills is raised !)>' tenant 

 farmers (colonos), who, as is customary in Cuba, are entitled to their pay in raw sugar at a 

 definite number of pounds of raw sugar per 100 pounds of cane delivered at the mill, or the 

 equivalent in cash at current local quotations. It results from, these arrangements that only a 

 part of the sugar made by the Company is its own property, the remaining portion belonging 

 to the colonos. The colonos' sugar is generallysold either to or through the company, although 

 a certain amount of the cane every season is settled for by the delivery of raw sugar in kind. 

 The effect of these arrangements is to make the colono share in the benefit of high prices for 

 sugar and to make him l)ear his proportion of the disadvantage resulting from low prices. It 

 will be understood that the cost of the Company's cane is thus very much less when sugar 

 prices are low then during .seasons when the prices of sugar are high. 



PROPERTY ACCOUNT 



The Company at the outset purchased 17 plantations in the Island oi Cuba, of which one 

 small plantation (Asuncion) has since been resold. This plantation was originally purchased 

 only because the owner of Conchita, who also owned Asuncion, declined to sell the former, with- 

 out the latter. As Asuncion is located at a distance from all the other plantations of the 

 Company, it was deemed advisable to resell it. 



To bring the operating efficienc> of all the j^'ants ir() to the standard we have set for our- 

 selves and to increase their capacity where such increase was adiisal^le, considerable machin- 

 ery has been purchased and installed. In order to round out the land holdings of certain of the 

 plantations, purchases of 228 caballerias (7,600 acres) of land have been made. During the 

 period under review, the Company also purchased the Stewart plantation and mill. The 

 Stewart is a thoroughly modern mill, with a capacity of 550,000 bags, and is located in the 

 Eastern end of Cuba, near the plantations Moron and Jagiieyal. This plantation was taken 



