The New York herald., 1921-07-03

To THE NEW YORK HERALD: The eco-
nomic situation in Cuba is fundamen-
tally as sound as ever. There is no
doubt that the paralyzed condition pre-
vailing here at this time is purely mon
etary and political and is in no way
linked or identified with Cuba's basic
ability to produce sugar cheaply.
In the production of sugar Porto
Rico is not a formidable competitor. In
the first place her total production Is
only about 100000 tons. or not enough
to supply the entire United States for
six weeks. Besides, Porto Rico can
never compete without some stimula-
tion in the form of a protective tariff,
as her lands do not yield the large out
put of the Cuban soil and have to be
replanted approximately every two and
half years even when highly fertilized.
In Cuba cane is grown and cut from the
same plant for twenty years without
fertilization.
Hawaii produces about 100000 tons.
which Is only another six weeks ration
for the United States
Cubas real competition comes from
Java. which at this time last year had
delivered into the United States over
$4,000 tons of sugar The very lowest
figure at which Java could put sugar on
an American dock Is about AIS cents a
pound, the total being apportioned as
follows:
Cost and freight. t................2 .275 cents
Duty NEUTRALITY-SUSPICIOUS.. 200 cents
The Cuban planter. economically situ-
ated, could meet this price and make a
profit of 20 per cent
AS to the monetary situation to which
/ have referred the Cuban is always in
the pawnshop and needing money, but
In these times his collateral has gone
and the bankers are faced with this
problem as one of them clearly put 1t
the other night: Suppose you own a
pawnshop and man comes to you and
says: Here's my watch. lend me some
money" In a few days moro he says
Here's my ring" and gets some more
money on that. A few days later all
his belongings are brought In to the
pawnshop and money Is raised on them.
He still needs more money. but he has
no more collateral. Some day you look
out Of the window of your pawnshop and
you see this man in torn and tattered
undershirt with all his collateral gone
What would you, as a banker, do in
that case?
This Is the situation as It exists to-
day in Cuba All the spending of money
which one sees in the streets Is done on
credit. 1t is common joke in town
that the banks have more paper in
"pagares" (promissory notes) than they
have in money. But this Is temporary.
and if Cuba can pass this crisis she will
be down to a manufacturing cost against
which no nation or people in the world
can compete or have ever been able to
compete.
Less than twenty-five pears ago saw
cane carts full of good cane being drawn
by three or four teams of oxen on their
way to the mills to have the cane con-
verted into sugar. The price of sugar
was one and seven-eighths cents a pound,
cost and freight to New York. How the
men were paid. the carts built, the oxen
obtained ! don't know, but they were.
At that time the sugar planters did
not have the fine machinery they now
have and they were losing as high as
10 per cent. of the sugar In the cane
To-day they lose IA per cent. or less.
due to improved methods. And the
marvellous sun and soil OF Cuba are
still there. But We must get down our
manufacturing costs. Empty bags are
now sold at IL cents each as compared
with 60 cents last year. Freights. labor.
food-all must come down. Once re-
stored to normal Cuba will show the
world once more that no spot on this
planet can compete with her in the pro-
duction of sugar.
Last season j saw a young negro who
had just received $50 as a cane cutter
for work of probably two weeks. He
wore patent leather shoes, white flannel
trousers, straw hat with silk band
and a gold ring and stick pin. With
his $50 he bought at the plantation
store ten silk ties at SO each and two
bottles of perfume at $40 a bottle.
Another instance of some of the past
economic errors of Cuba came to my