THE CUBA REVIEW 



Havana Correspondence 



Havana, Cota, July 19, 1922. 



Sugar: Twenty-two more centrals have closed their grinding season since our 

 last letter, making the total number of mills which have stopped grinding for the season 

 one hundred and seventy-three, the total production of these mills being 23,160,633 

 bags. There are now only fourteen mills which are continuing to operate, all of which 

 are located in Oriente Province. 



It is estimated that there are about 783,000 tons of sugar at the various ports of 

 the Island awaiting transportation to the refineries. Raw sugar prices have been en- 

 couraging, a gradual advancement taking place from time to time, and a higher price 

 is anticipated as the crop on hand diminishes. 



While the price of sugar has been advancing slowly, and the output has been large, 

 nevertheless a number of producing mills are in a worse position than at the beginning 

 of the season, while very few of the mills are expected to show any profits. It is 

 generally felt that it will take at least another favorable grinding season before the 

 industry will again be back solidly on its feet. This past season has been largely one 

 of liquidation and readjustment, and as the majority of the mills started grinding heavily 

 burdened with obligations, it was not to be expected that this would be a very lucrative 

 season from the standpoint of the producer. 



Financial Situation: Present indications are that even with the new decreased 

 budget for the ensuing fiscal year, while effecting a saving of over 50 per cent, in the 

 various government departments over that of the previous year, nevertheless the revenue 

 derived from all sources will still be insufficient to meet the expenditures called for in 

 the budget. This is due largely to an alarming falling off in the customs receipts, as 

 well as to the general depression in the sugar industry, which is still being felt, and the 

 losses incurred by the government in the several insolvent banking institutions during 

 the latter part of 1920. 



There has been a strong revival during the past few days of the resumption of the 

 loan negotiations, which were ended somewhat abruptly a few months ago, the reason 

 understood at that time being that it did not meet with the approval of the Washington 

 Government. Since then, however, there has been a new reform cabinet appointed, the 

 budget has been materially reduced, thousands of "Botelleros," or employees who are on 

 the government payrolls in various departments but who do nothing more than collect 

 their salaries, have been eliminated, so that it is believed that the opposition of the 

 United States Government to a loan has been entirely removed. 



It is believed that if such a loan is finally negotiated it will be somewhere around 

 the sum of $50,000,000, although it is estimated that that amount would not be sufficient 

 to place the country on a firm financial footing, inasmuch as it would take that amount 

 at least, if not more, to pay off the present floating debt and liquidate back salaries due 

 government employees and other creditors of the government who have been patiently 

 waiting for a long time for their money. Were the loan made for $75,000,000 or 

 $100,000,000 it is believed it would prove of much greater value, as then there would be 

 sufficient money left to begin much-needed public improvements. 



Probably one of the most valuable of the proposed public improvements which the 

 loan would provide for is the central highway connecting the two extreme portions of 

 the Island, and establishing a thoroughly modem highway between Havana and Santiago. 

 Estimates made by the Department of Public Works have placed the cost of construction 

 of such a project at $19,000,000. 



Practically the only stumbling block being encountered in opposition to this loan 

 at this time is the attitude of some of the members of congress, who still seem to feel 

 that the government can find some other way out of the crisis than by increasing the 

 indebtedness of the Republic, but this view we do not believe to be shared by the majority 

 of the legislators, and it is almost generally believed that the loan will be authorized 



