THE CUBA REVIEW 



35 



THE SUGAR INDUSTRY 



SUGAR TAX 

 The Cuban Covfrnincnt, folloAvinp; its ac- 

 tion in pn)\iding for a .small tax on raw snjiar, 

 has issued an official ox])lanatory statement to 

 reassure, not only the consumer, but those who 

 are interested at present in the prospective 

 earnings of the various Cuban sugiir-produc- 

 ing companies, as to the nef^ligible effect of the 

 tax both on the retail price of sugar as a 

 household commodity, and. on the profits of 

 the Cul^an sugar producers. Tlie statem.ent, 

 which was in the form of a Havana cablegram 

 from. E. S. Azpiaza, secretary to President 

 Menocal, to the Eepublic of Cuba News 

 Bureau, in New York, says: "The new sugar 

 tax of twenty cents a bag and six per cent, on 

 the net profits of the sugar com.panies is ex- 

 ceedingly moderate considering that a bag of 

 raw sugar at present prices is worth $15. This 

 leaves a net profit to the producer of around 

 $9 a bag. The measiu^e works this way : Sup- 

 pose a sugar m.ill m.akes 1,000,000 liags of 

 sugar, earning a net profit of $9,000,000, the 

 taxes would be .|1200,000 of this amount at 

 twenty cents a bag. The cost of production 

 plus the bag tax would be about $6,200,000, 



leaving a net profit of $8,800,000 on which 

 is com])uted the six per cent tax, in this case 

 amounting to aroimd .$.520,000." 



Official cabled advices received by the News 

 Bureau from Havana indicate that the pro- 

 duction of the various centrals in Cuba for the 

 present season will be only five per cent, less 

 than last year's record crop. Few of the im- 

 portant producers have suffered to any ap- 

 precial)le extent from the recently-collapsed 

 uprising, and the im])osition of the bag tax 

 and the slight excess profit tax should not 

 affect their earnings to any extent worth con- 

 sideration. In fact, all the estimates of the 

 earnings of the various companies, as well as 

 their tonnage production, which have eman- 

 ated from unofficial sources in the past ten 

 weeks, have been mider, instead of over, the 

 actual figures. This has been well reflected 

 by conditions in the stock market, where 

 Cuban sugar stocks, in the face of reactions 

 in other industrial issues, have exhibited un- 

 usual strength, their quotations steadily in- 

 creasing toward figures which the revised of- 

 ficial Cuban Government statistics indicate 

 are the correct price levels. 



THE SUGAR REVIEW 



SpecMiy written for The Cuba Review bv Willeti db Oray, New York. N . Y . 



Our last review for this magazine was dated May 7th, 1917. 



At that date Cuba centrifugal sugar of 96° test basis was quoted at 53'ic. cost and freight 

 and is now 4^c. per lb., showing decline for the month under review of ^gc. per lb. 



The cost and freight quotation from, day to day varied as to the date of sliipments. The 

 regular duty paid quotation changed as follows: May 8th, 6.145c.; 10th, 6.21c.; l-lth, 6.08c.; 

 15th, 6.02c.; 22d, 5.96c.; June 1, 5.89c. 



At this writing there is a moderate demand from refiners at 4J^c. c. & f. (5.89c. duty paid) 

 for prompt shipment Cubas. 



Porto Ricos have been more freely offered than Cubas with last sales at 5.77c. per lb. 

 against Cubas at 5.89c. duty paid. Condtions of supplies and demand have improved some- 

 what during the month from the outside point of view, some Cuban crop experts advancing 

 their latest estimates to quite near our unchanged estimate of 3,000,000 tons, which we see no 

 good reason to change even to the 2,900,000 tons which lately put out from Cuba. 



Cuban buyers of contract futures on the Sugar Exchange have been prominent factors in 

 sustaining prices which might be lower now except for such support. 



The Tariff Committee at Washington have decided to place an excise tax on all sugar 

 going into consumption of 3'2C. per lb. This action is confirmed by the Houses of Congress, as 

 is most likely, will have the effect of a raise of duties on Cuba sugar from Ic. per lb. to 13/2C. 

 per lb. Connected with this tction is a movement to stop the payment of drawbacks on 

 sugar exported which would raise the price of refined for export about Ic. per lb. 



Inasmuch as Ainerican granulated and Java whites and West India crystals all sell at the 

 same price in London, say about 9.0Cc. per lb. including duty, there would have to be a read- 



