THE CUBA RE J' IE JV 21 



The Emergency Tariff 



The following letter regarding the increase of dutj^ on sugar in the United States 

 and its effect on Cuba was received by The Cuba Review from the Chamber of Com- 

 merce, Industry and Navigation of the Island of Cuba: 



The Emergency tariff, which went into effect on the 27th of May last, raised the 

 duty on Cuban sugar (96° test) by considerably over half a cent (0.5952) per pound. 

 Cuban raw sugar paid, under the Underwood tariff, 1.0048c. per pound, while under 

 the Emergency tariff it pays 1.60c. per pound, including in both cases the 20% reduc- 

 tion which Cuba enjoys. The new rate is retained in the permanent tariff bill which 

 has passed the House of Representatives and is now before the Committee on Finance 

 of the Senate. 



Under the conditions now prevailing in the sugar market, the increase in the duty 

 on sugar is paid by the Cuban producer. As soon as the Emergency tariff went into 

 effect, the price of Cuban sugar depreciated about 60 cents per hundred pounds, which 

 was the difference between the old and the new rate on our sugar. As at that time 

 (May 28, 1921) we had about 1,933,000 long tons of sugar unsold, this meant a sudden 

 loss to us of over $26,000,000 on the present crop. On 3,634,688 long tons, which has 

 been our average annual production for the last five years, the increase of 0.5952c per 

 pound in the duty on Cuban raw sugar, represents $48,460,000 as an added marketing 

 expense each year for the sugar industry of Cuba. 



The price of Cuban sugar is lower by the amount of the duty, whenever competi- 

 tive conditions exist, as the}'' do today, and these conditions will continue indefinitely, 

 so far as can now be foreseen. Hence the increase in the duty will continue to be added 

 to the cost for the Cuban producer. To quote from the United States Tariff Commis- 

 sion's Survey on Sugar, 1921, page 32: "With a dutj^ on Cuban sugar, the marginal 

 cost in Cuba tends to differ from the marginal cost of domestic sugars, wherever pro- 

 duced, by the amount of the duty, making allowance for freight charges. It is there- 

 fore a recognized fact that the effect of any increase in the duty on sugar is to lower 

 the price for the Cuban producer to the extent of such increase. 



Now, the duty has been advanced preciseh^ when the sugar industry of Cuba is 

 suffering enormous losses and is struggling against difficulties so great as to seem almost 

 insuperable. The burden of the additional duty is one of the hardships which we have 

 to bear, and it has contributed directly to intensify Cuba's great crisis and to make 

 readjustment to new conditions slower and more painful than they would otherwise be. 



The Cuban Government, in view of the immense injury which would result to the 

 sugar industry of Cuba, if the increased duty on sugar were retained in the permanent 

 tariff, appointed a special Commercial Mission to the United States, over which the 

 Cuban Secretary of the Treasury presided, which has submitted to the Honorable Sec- 

 retary of State of the United States a plea for the reestablish ment of the duty on CulDan 

 sugar as it existed prior to the Emergency tariff. Representatives of the sugar and 

 tobacco interests of Cuba, of the Merchants' Association of Havana and of this Chamber 

 formed part of the aforesaid Mission. 



The economic interests of the United States in Cuba are so important that we 

 have not hesitated to invite your attention by this letter to the far-reaching effects, on 

 American interests as well as ours, of the burden which the additional dutj^ on sugar 

 places upon Cuba at this critical juncture. Will j^ou therefore allow us to explain to 

 you, as brieflj^ as we can, what the present situation is, and wh.y we consider the re- 

 establishment of the former duty of one cent per pound on Cuban sugar of such ^ital 

 importance? 



Economicallj^, Cuba is dependent almost entirelj^ upon sugar. Our island is the 

 largest producer of sugar in the world, our crop representing 23% of the world's pro- 

 duction, and one-half of the consumption of the United States being deri-\'ed from Cuba. 

 Over 88% of our exports consist of sugar, which we sold before the war almost entirely 

 to the United States. The value of our exports reached, in the fiscal year 1919-20, 



