The Washington times., 1928-01-21

porous.
1t ii still seemingly paying the
price for its unwillingness, more
than seven years ago, to so
through the pains Of post war
on October Ii, 1920, Cuba after
the bottom had dropped out OF
the sugar market, declared q
short moratorium, which gave
numerous weak debtors B. chance
to perpetuate their existence
through long-terni agreements
with creditors.
Governmental policy has en-.
couraged the weak and the
manned In Cuban industry and
agriculture and the result IL that
the country has been held back
BY an excessive productive ca
pacity.
Prices Depressed
The weaker and unnecessary
producers compete with the more
efficient ones. Accordingly. prices
for Cuban products, especially SUI
gar. are depressed and as a cor
rollary to its first policy of pre-
venting the unfit from falling by
the wayside the Cuban govern
ment has devised its elaborate
program Of seeking to boost SUI
gar prices through limiting pro-
duction and rationing exports.
Sponsors Of the governmental
economic policy recognize that
It is still an experiment. Among
the American colony there II
an undercurrent Of criticism OF
seeming interference with the
free working out OF economic
forces, which they liken to Nc
Nary-E1augenism at home. Critics
assert that by supporting the
weaker and less efficient pro-
ducers the Government in eff
feet dfffuses the economic troubles
among all factors, preventing the
most effective units from achiev-
ing the benefits of mass pfoduc-
ton.
Economic Middle
On the other hand, candid
American business men recognize
that the government Is making q
sincere and courageous attempt
to lead the island out OF an
economic middle which was
heightened lie not directly caused
by the policies Of foreign banks.
During the war imitation, the
four great foreign banks went
to excuses In Turing Cuba to
expand unduly through the use
Of easy bank credit.
When the day Of reckoning
came, instead Of writing of their
NrxNN T4ssw4 &ees y
applying the pulmotor kept
enough Of their mills going 70
account Tor the production Of at
least 1000, 900 long tons Of sugar
d year, according to estimates
III reliable sources here. Cuba's
total production in 1914 was only
about 100000 tons, its present
production under the restriction
program is double that amount;
and its potential capacity APP
proaches 5000, 900 tons.
Well.informed industrialists here
have just learned that the direc-
tors OF outside banks are firing
of holding the bag on Cuban
mills. and that they may after
this crop Is out Of the way shut
down on further credit. IL that
policy eventuates 1t, like the scrap
ping OF artificial government res
strictions on the Cuban growers,
would have the effect Of bring
I ing the postwar REIMBURSEMENT to
q head and suddenly, drastically
and painfully liuuidating the post
war difficulties. After such crisis
Cuba would no doubt gradually
enter new period Of long-term
prosperity.
Mills Cut Indebtedness
The chief effect of the sugar
restriction program thus far has
been to enable some Of the mills
to cut down their indebtedness
to outside banks. One adverse
short term effect on the island
ON the other hand, is that 1t re-
duces the need Of employment OF
labor and thus contracts the
supply of money in circulation.
One large planter and mill owner
estimates that the curtailment
program represents reduction
in the pay roll Of the planta-
tions and in the sugar mills OF
$40, zoo, 900 a year. On the other
hand, If Cuba had been permitted
to- produce up to capacity since
1925, much of the wage bill
would have gone to migratory
rcJnrnd vv0y.Ixnrs vvhO ara imports