THECUBAREVIEW 29 



THE SUGAR INDUSTRY 



ANNUAL REPORT OF THE AMERICAN SUGAR REFINING CO.. 1914 



The past year was marked by unprecedented conditions in the world's sugar markets 

 In the beginning of the year the outlook was for a low range of prices for both raw and refined 

 sugar. Crop conditions throughout the world promised sufficient production to more than 

 supply the world's requii'ements, and in the United States and its usual sources of supply, the 

 estimated crops justified a behef in a low range of prices for the entu'e year. Cuban pro- 

 ducers sold freely at or near the cost of production, and domestic beet sugar producers entered 

 into contracts for future delivery at prices showing but moderate profits. Owing to the pros- 

 spective reduction in the tariff, which took place March 1st, business in refined sugar was 

 much restricted, and after that date, owing to the heavy accumulation of raw sugar in Cuba, 

 prices were low. Until the latter part of July conditions were such as to indicate that prices 

 would continue at a law level throughout the year. 



The unexpected developments in Europe, followed by a declaration of war on the part of 

 Germany, first against Russia and afterwards against France, caused Germany to immediately 

 prohibit the exportation of sugar and tm-ned England, which had a light stock on hand, to the 

 cane sugar countries for its supply. That country, in its zeal to make certain of its requirements 

 bought heavily in Cuba. As this Island ordinarily furnishes over one-half of the requirements 

 of the United States, the entrance of England into that market on a large scale, forced prices 

 to abnormal levels. Between August 4th and 13th the prices of raw: sugar advanced from 3.29 

 cents to 6.52 cents per pound, and sales were made to speculators at from 34 of a cent to J^ of a 

 cent per pound higher than these figures. It is estimated that England bought from other 

 countries in all about 900,000 tons of sugar to provide for the portion of her supplies formerly 

 obtained mainly from Germany and Austria. Added to the buying of England there was 

 heavy speculative buying of both raw and refined sugars. 



Prices became so abnormal that a reaction soon occurred, and by August 19th the market 

 had turned and there was a steady decline for some weeks until raw sugar reached 3.50 cents 

 per pound, or nearly the point from which the advance began. During this latter period, the 

 trade in refined sugar was paralyzed, and speculative interests re-sold their purchases of refined 

 sugar below refiners' prices. This condition caused a material curtailment in production and 

 heavj' shi'inkages in values of stock on hand. 



It should be borne in mind that this company is not a producer of its raw material, and 

 therefore does not necessarily share in the profits on an advance in the raw product. Engaged 

 as it is in the refining sugar, it is dependent upon other countries for its supplies, and must sell 

 its refined sugar as the country requu-es it against its purchases of raw sugar, and, unUke the 

 Beet Sugar Companies, which contract for their supply a year in advance, the refiner cannot 

 know the cost of his raw material until actually purchased. 



CONDENSED GENERAL BALANCE SHEET, DECEMBER 31, 1914 



Assets. 



Real estate and plants, including refineries, warehouses, cooperages, wharves 

 and stables with their machinery and equipment, timber and other 

 lands owned in fee or through ownership of the entire capital stock of 



constituent companies, at cost less depreciation $48,477,038.20 



Investments, general 20,968,070.13 



Investments, fire insurance fund 8,000,000.00 



Investments, pension fund 800,000.00 



Merchandise and supplies, including raw and refined sugar, syrup, material 

 in process of manufacturing, boneblack, cooperage, horses, wagons, har- 

 ness and other stock and supplies on hand 15,431,099.02 



Prepaid accounts, insm-ance, taxes, etc 254,864.81 



Loans 5,137,275.00 



Accounts receivable 4,350,167.16 



Accrued income, interest earned and dividends declared but not yet col- 

 lected 480,123.55 



Cash with trust companies, in banks and on hand 19,110,779.61 



Total $123,009,417.48 



