The sun., 1919-07-17
COCKTAILS REPORTS
ON CUBA CANE CORP.
Summary, Given Out, Indicates
Little Cause for Criticising
Management Found.
REFERRED TO COMMITTEE
Stewart Property's Earnings
"Have Not Yet Justified
Its Purchase Price,"

The directors OF the Cuba Cane Sugar
Corporation held a special meeting yes
terday afternoon In which the report of
Gen. George w. Goethals. who has been
investigating the management, opera
zion and properties of the corporation,
was presented. In a statement given out
Mt the conclusion OF the meeting II was
declared that the report was TOO vol
luminous to be considered in detail at
the meeting and was referred to a spe-
ciai committee for consideration"
A summary OF the important points
or the report. prepared with the APP
prevail Of Gen. Cocktails. was handed
out for publication at the close OF the
meeting. The summary indicates that
Gen. Cocktails has found little to crit.
else In the management and operation Of
the properties. One of it's chief features
was the report on the so-called Stewart
property. purchased some time ago by
the corporation. There was more or less
criticism Of that purchase at the time
IL was made and according to the sum-
mary. Gen. Goethals found that "the
earnings OF the Stewart property have
not yet justified the purchase price paid"
Gen. Cocktails advised a change of man.
agement as respected the direct opera
ton OF the properties in Cuba. The sum-
mary in part follows:
Investigation shows that the Cuba
Cane Sugar Corporation was organized
m the early part OF 1916 and took over
seventeen properties acquired for II by
Manuel Rionda. The plantations bought
were not owned in part or in whole by
the Czarnikow.RiondaC Company, Manuel
Sionda or any member Of his family.
These transactions were carefully gone
into, Mr.. Rionda willingly opening not
only his own private books but those
OF the Csarnikow-Rionda Company and
the Cuban Trading Company. Mr.
RionSa never received, directly or in
directly, commissions or money consider
alton for his services. OF 10000 shares
of common stock assigned to him, the
larger part was given to those who as
sisted him In securing the properties and
to those whom he selected to manage
them The balance he still owns. These
transactions call for no criticism.
Eastern Mills Increase Product.
OF seventeen properties acquired, four
are In the eastern and thirteen in the
western part OF the island. The latter
are Obliged to compete keenly for their
cane and to pay consequent high rates
The eastern mills are more fayorably
located as to coet Of cane, labor costs
and conditions of the soil, Tho corpora
ton has spent large sums OF money in
developing and extending It's eastern
properties, which has resulted IN much
increased production from these proper
ties In the present year and should re-
suit in further increase in future years.
These corporations originally lacked
working capital The properties were
taken up on the books at a cost Of S4s.-
10000. The stock issued was for $780,
900. 900. After additions and deductions,
shere remained approximately only $3.-
100000 Of working capital. This lack
of working capital has forced operating
Fronts to be used for extensions and i'm
provements, including purchase of the
Stewart property.
Earnings OF the Stewart property
have not yet Justified the purchase price
paid. This does not take into consid-
Grafton any benefits that might have
otherwise accrued to the adjoining prop
critics or to the general enterprise from
the purchase OF this property.
Amounts expended on improvements
indicate clearly that the mills we're origi-
neily in FATHER poor condition and sum
cient time has not elapsed for improve
ments TO be reflected In earnings.
Equipment in Good shape.
Equipment OF the corporations rail-
roads, with one exception, is in good
condition. though not altogether ads-
quate. Such inadequacy ia made up 10
some extent by rental OF cars from out
siders, The machinery plants Of the
corporation are. as a whole. in good con-
dition.. Operating results OF the various
plants have been compared with their
competitors, and although some OF the
centrales show poor returns, the result
of such comparison is on the whole IA
vorabie to the corporation, The COM
pany IL steadily improving Its manu-
featuring efficiency.
4 Taxes. freight rates, war insurance
labor costs and costs OF material and sup
plies have increased largely. This is
partly due to abnormal conditions over
which the corporation has no control
Decrease In profits has been largely due
20 failure OF the corporation to take ad-
vantage OF opportunities for economy
Afforded by centralized management
Z The wisdom of the corporations SELL
ing contract Is questioned.
1T Is recommended that the CORPORA
Zion establish Its own purchasing depart.
nlant.
Changes IN the management are
recommended, although II Is admitted
that this IL no easy task, because of the
location Of the properties, absence OF
suitable habitation at many OF them. lack
of social environment and peculiar tenn
permanent OF the people. 1t Is believed
that this can be accomplished II done
with the hearty cooperation OF the pres
emit management. and this cooperRt ton
seems assured, because OF the TYNE of
men In charge OF affairs and their I'M
doubted desire to make a success OF the
enterprise"