THECUBAREVIEW 21 



THE ESTABLISHMENT OF THE PRICE PAID THE CANE 

 GROWER BY THE SUGAR MILL OWNER 



By H. O. Neville 



A very large percentage of the cane gro^yn in the Island of Cuba is grown by 

 persons called colonos, who on lands either owned by themselves or rented from the 

 sugar factories grow cane which is sold to the owners or operators of the sugar 

 mills. For many, many years the contracts entered into between the colonos and the 

 mill owners have for the most part specified that the cane delivered to the mills 

 shall be paid for in sugar, a certain percentage in sugar of the weight of the cane 

 delivered by the colono being received by him. It was also thoroughly imderstood 

 and usually expressed in the contract that the mill owner should be given the 

 preference in the purchase of these sugars, with the result that usually the cane 

 grower is paid by the mill owner in money instead of in sugar, the latter being paid 

 for at a price fixed by certain bodies of legally authorized Brokers established in, 

 at that time, the principal sugar markets of Cuba : Havana, Matanzas, Cardenas, 

 Sagua, Cienfuegos and Caibarien, the price being usually the average of that pre- 

 vailing in the particular market referred to in each contract during each of the 

 fifteen day periods- into which each month was divided. These prices are referred 

 to in Cuba as "promedios," and ever since the establishment of this system there 

 has been more or less complaint occasioned by the greater or less accuracy with 

 which they have been determined. 



The custom also then prevailing was that the Brokers authorized to quote these 

 official prices or promedios were supposed to take into consideration in determining 

 their quotations the price at which sugars were actually sold in warehouse at 

 Cuban ports, but it was also frequently the case that in the absence of such sales 

 market impressions were allowed to enter into their calculations, with the result that 

 considerable dissatisfaction arose. The reader can readily see how market im- 

 pressions could be made to vary according to the desires of the party determining 

 the promedio, and that the opinion or determination of such parties could be caused 

 to change from those corre.sponding to actual conditions to those corresponding to 

 conditions which would have been more favorable to certain interests had they pre- 

 vailed. During this period the quotations or promedios were always given out by 

 the Brokers, as so many reales per 'arroba of sugar, the real being eciuivalent to 

 12 1^ cents Spanish gold and the arroba to 25 Spanish pounds. During this time also 

 the cust<)m prevailed of the sale in Cuba of by f'^.r the greater portion of our sugar 

 crop. 



On October 29th, 1914, a law was passed by Congress by which Cuba's national 

 money v-as created, and all foreign moneys with the exception of that of the United 

 States of America would in the future be considered as only merchandise, so that 

 quotations made thereafter and until the issuance of President :Menocars decree 

 No. 503 of the 14th of April, 1915, were really made in a currency which was not 

 legal in the Island of Cuba. It was. therefore, very reasonable that upon the date 

 mentioned President Menocal's decree should prescribe that all future quotations 

 made by the various organizations of Brokers throughout the Island should in the 

 future be made in cents per pound instead of in reales in Spanish gold per arroba. 

 This decree also changed the old custom of deducting 50 cents per bag from the 

 price at which sugar Avas sold in arriving at the promedio at which the colonos 

 would be paid for their canes, and also by this decree the Secretary of Agriculture, 

 Commerce and Labor was empowered and instructed to publish the daily quotations 

 of the authorized Brokers, as also the semi-monthly and monthly promedios. 



