18 T HE CUB A RE VIEW 



shows an estimated income of $55,638,800, and estimated expenditures of $54,852,102. 

 An itemized schedule of this estimated budget appeared in Commerce Reports of 

 August 7, 1922, page 420. 



There is a "floating debt" in Cuba, estimated by the Secretary of the Treasury 

 at about $50,000,000, representing expenditures and obligations of the Cuban Govern- 

 ment, to meet which the national income has been insuthcient. At the time of writing 

 plans for liquidating this debt are still undecided, though an exterior loan seems to be 

 the means most generally favored. 



Sugar as an Economic Factor 



Cuba enjoyed a period of almost unparalleled prosperity during the years following 

 the opening of the European war. This movement reached its apex in 1917, and 

 continued at a high level until the crisis of 1920. 



Economically Cuba is dependent almost entirely on its sugar crop. The island 

 is the largest producer of sugar in the world. Nearly 90 per cent of Cuban exports 

 consist of sugar. The sudden demand for sugar in those countries ordinarily dependent 

 on European production caused a rapid rise in its value. The average value of sugar, 

 duty paid, at New York for the period January to June, 1914, was 3.22 cents per 

 pound, while for the last six months of the same year the value averaged 4.52 cents, 

 an increase of over 40 per cent. During the following years the average values were: 

 1915, 4.642 cents; 1916, 5.786 cents; 1917, 6.228 cents; 1918, 6.447 cents; 1919, 7.724 

 cents and in 1920, 12.326 cents. The general average for this period was 7.334 cents, 

 as compared with 4.123 cents for the period 1904 to June, 1914. 



As the average production of Cuban sugar was less than 3,600,000,000 pounds 

 during the period before the war — that is from 1905 to 1913 — and approximately 

 7,400,000,000 pounds for the period comprising the seasons 1913-14 to 1920-21, it will 

 be clear that during this latter period profits in the sugar industry were considerable. 

 The result was that business undertakings in the country prospered and that capital 

 was available for the purchase of all classes of foreign merchandise. 



The official United States statistics place the exports to Cuba for 1920 at the 

 abnormal figure of $515,000,000. The Cuban official statistics show these imports as 

 $404,385,767, and the total from all countries as $557,016,692. The difference in 

 statistics is probably due to the immense quantities of merchandise which were left 

 in the bonded warehouses and not cleared through the customs. Imports of money 

 are not included in the above figures. The average annual value of imports into 

 Cuba during the period 1911 to 1914 was less than $125,000,000, while for the period 

 1915 to 1920 it averaged over $300,000,000. 



Sugar estates were extended, new machinery bought, prices of goods and supplies 

 rose to figures which made it difficult for those not enjoying a share in this general 

 influx to live. The rich estate owners in many cases moved into Habana and built 

 houses resembling palaces. Funds to carry out almost any kind of enterprise could 

 be obtained without difficulty. 



Effect of Oversupply of Sugar 



When the crash, caused by an oversupply of sugar throughout the world and an 

 attempt to hold sugar stocks for even higher prices than those ruling, came in October, 

 1920, the whole country "went to pieces." Great quantities of merchandise were 

 refused by consignees who were unable to meet their obligations. The banks which 

 had advanced immense sums against sugar stocks and many other classes of security 

 at valuation, in most cases, far above the prices either obtainable in the broken 

 market or even normal figures, now found it necessary to call such loans, as well 

 as to practically cease making any further advances. 



It has been estimated that over $80,000,000 worth of merchandise was either 

 refused or could not be traced by the consignees, owing to the harbor congestion. 

 On account of this congestion, caused by the harbor strike and economic conditions, 



