THECUBAREVIEW 29 



and equipment by the mill, money being advanced to "colonos" or tenants to grow, cut, 

 and deliver the cane to the company's railroad, a percentage of the sugar extraction 

 being returned to the tenant in payment for his work. In many instances the "colono" 

 owns his land and equipment, and in such cases the basis of settlement is different 

 only in that the percentage returned to him is larger. These percentages vary ac- 

 cording to locality and the number of mills competing for the cane, but it probably 

 averages about 5 per cent of the cane actually delivered to the mill or the company's 

 railroad. That is, for every 100 arrobas ( arroba = 2.5.3664 pounds) of cane delivered 

 to the mill the colono receives J arrobas of sugar or the market price for the same. 



The second method, that of "administration," is one in which the company owns the 

 land and either does the whole work through its own employees or lets the different 

 branches of the work out to contractors who perform the work under the supervision 

 of the company's representatives. One class of contractors cleans the cane rows, another 

 cuts and loads the cane on the cars, etc. This seems to be the preferred method, and 

 this is the one upon which the figures of this report are based. 



In Oriente Province the average cost by contract of clearing land, fencing, making 

 roadways, plowing, planting and cultivating cane to maturity (12 to 14 months from 

 planting) is $50 an acre. The cane once planted in new and what is considered good 

 sugar land will produce an average crop of 30 tons per acre per annum for a period 

 of 10 years, after which time it would have to be replanted; and the cost of cultivation 

 per year would be about $15 per acre. 



Taking these general figures as a basis, it would be necessary to plant the first year 

 5.000 acres of cane, which at an average of 30 tons per acre, would produce 150,000 tons 

 of cane per annum. Allowing a "rendimiento" or sugar extraction from the cane of 

 10 per cent, would give a production of 96° raw sugar of 15,000 long tons, or 13,600,000 

 pounds in all. The average net price for Cuban raws f. o. b. Cuba for the past 10 years. 

 but not including the high prices of 1911 and 1912, was 2.25 cents per pound. It must 

 be stated here, however, that the high prices of 1911 and the favorable outlook as to 

 future prices will considerably raise this average. This production of raw sugar would 

 give approximately 1,000.000 gallons of molasses, and the price for which this could 

 be sold would be about 3Vi; cents per gallon f. o. b. Cuba. Thus the following statement 

 shows the gross annual income to be : 



33,600,000 pounds 96° raw sugar, at 2^/4 cents $756,000 



1,000.000 gallons molasses, at 3 V2 cents 35,000 



Total income $791,000 



In such a mill located near the coast, with no railroad freight to pay on its product 

 and with efficient management, it is safe to say that the cost of producing this amount 

 of sugar, including cultivation, harvesting, transporting the cane to the mill, railroad 

 operation, mill operation, administration, maintenance, depreciation, insurance, taxes and 

 all other operating expenses, would not exceed $550,000. or at the rate of 1.6 cents 

 per pound. The difference between the gross income and the total annual cost would 

 therefore be $241,000. or slightly in excess of 14 per cent on the investment of $1,700,000. 



This, as has been stated above, is a very conservative estimate of the costs and 

 profits obtained from the operation of a modern sugar mill under favorable conditions 

 in Cuba, as the figures for the total investment and those showing the cost of production 

 are probably higher than they would be under skillful management, while the price 

 received for the products would undoubtedly average slightly higher than the figure 

 given. For instance, if such a mill had sold its product for the high prices which 

 obtained during the latter part of 1911, it would have produced a gross income of over 

 $1,400,000, or more than SO per cent on the whole amount invested in the plant. Careful 

 students of the industry claim that on the basis of a period of, say, 10 years, there is 

 no reason why a mill' properly located and managed should not produce an average 

 net income of 15 to 20 per cent on the actual investment. 



There are in the island at the present time 173 active mills, of which 34 are wholly 

 .\merican owned and 2 partlv controlled by American capital. .Another interesting 

 fact is that American-owned m'ills produce nearly 35 per cent of the total sugar output 

 of Cuba In Pinar de Rio thev produce over 22 per cent: in Habana. 15 per cent: in 

 Matanzas. 14 per cent: in Santa Clara. 26 per cent; in Camaguey. 58 per cent: and 

 in Oriente more than 70 per cent. From this statement it can readily be seen that in 

 the provinces of Camaguey and Oriente the sugar output was largely from American 

 mills, and, on account of the American mills now building and bemg planned in those 

 provinces, these percentages will be increased still further within the next two years. 



A dividend of 1 per cent on the preferred stock of the Xipe Bay Co. has been declared 

 payable July 15th at the office of the treasurer, Boston, Mass., to holders of stock of 

 record at close of business June 25th. 



