Evening star., 1934-03-11
Continued From First Page)

Sought Sterilization.
In giving Cuba her political lnde-
pendence we reserved certain rights
looking toward the maintenance OF
Cubas stability. If we had guarded
her economic welfare as jealousy
there would have been less occasion to
be concerned about her political
stability.
Despite the 20 per cent preferential
which Cuba las enjoyed in the Amerl-
can market. the United States tariff
policy has not been sufficiently helpful
to the Cuban sugar producers. Its
cumulative result over a period OF
many years has been to keep the
American market increasingly for the
benefit of domestic, principally island,
producers. The increase under the
Hawley-Smoot act of 4 cent pound
on the duty on Cuban sugar merely
added layer to the tariff wall, which
was already too high. 1t took effect
very short time after 1 assumed my
post in Cuba. Before left the United
States I discussed the sugar tariff
with President Hoover. He was
strongly in opposition to the proposed
enormous increase of more than Ia
cents and he later told me that in
securing a compr omise at /, cent he
had been just to both sides. He added:
However, there will be little conso-
lation in that, because no one is ever
grateful for negative blessings" The
final passage of the law, whatever its
values were to the American industry.
came as a great blow to Cuba, where
bad times which had preceded our
own depression by several years. had
already created difficult economic
situation and pointed the way to
bad political condition.
Practical Effect Doubted.
However, it is problematical whether
the tariff increase had any practical
effect in view OF the surplus sugar
stocks then in existence. The fall in
the price of sugar, due to the world
wide overproduction, was the real
root of Cuba economic difficulties.
For 10 years. beginning with 1920,
when the sugar bubble burst, Cuba
made numerous legislative attempts
at sugar control. None of these
schemes was sufficiently successful to
warrant its continuance for long. Ac-
cordingly, efforts were made to sup
plement them by an international
plan to help the producing
countries. International negotiations
failed until in 1880 the Chadbourne
plan, which is now operative, was de-
vlsed by those interested in the Cuban
industry and was accepted by Cuba.
Java, Germany, Czechoslovakia, Po-
land, Hungary. Belgium and later
Peru and Yugoslavia. The author of
the plan described it as follows:
First, We have segregated surplus
stocks for orderly marketing over a
period of five years. Second, We have
placed a rigid restriction upon output
in the chief exporting countries Of the
world so that future output plus an
nual sales of segregated surpluses will
equal and not exceed consumption.
Third. We have secured governmental
sanction to control the arrangements
made SO that recalcitrants can have
no opportunity to take advantage of
their fellows"
The Chadbourne plan was attacked
especially on the ground that it ia
vored a special group. in an industry
where group interests are eXtraordi-
narlly numerous and complicated
Among these different groups it was
expected that charges would be made
that the plan favored certain inter-
eStS. Those who attacked the plan
said that it benefited the foreign
banks, that it was detrimental to the
small mill owner. that it was con-
uary to the interests of the colonos
and that it was another Yankee
trick" to benefit production of sugar
In the United States.
Supported by Big Banks.
In general. it can be stated that at
the start the plan had the support of
the banks and weakly financed pro-
duclng companies, and faced the op-
position OF the American refiners and
some OF the more strongly financed
companies. The banks were holding
the bag" and hoped that the plan
would raise prices and re-establish
some value for the sugar properties
which they had been financing. The
companies without strong financial
support anticipated ruin unless prices
should rise. On the other hand, the
more strongly financed companies
would not have objected to the de-
struction of their weak competitors,
and the reflner was, OF course chiefly
interested in large cheap output
With no improvement in sugar
prices and with an increasingly tur-
bulent political situation, the Chad
bourne plan became more and more
unpopular; most of the attacks de-
veloped as it became evident that the
hopes and predictions as to a rise
IN the sugar price would not ma
terlallze. In fact, the price of sugar
during the time of operation of the
plan reached the lowest point in the
history OF its production. falling from
an average price in 1880 of 49 cents
pound to 1.38 in 1881 and O.92
in 1882.
The opponents of the plan point to
the decline in the price of sugar as
an evidence of the plans failure. Of
course. during this period the price
OF all commodities suffered pro-
gressive declines with the deepening
OF the world depression. The op-
ternational plan which does not have
the full cooperation of the United
states domestic and island producers
cannot be effective.
Those who defend the plan declare
that the continuing decrease in con-
sumption prevented the hoped-for
equilibrium in supply and demand,
which the restriction on production
had intended to accomplish, and so
the benefit of price rise was not
achieved. They also contend that be-
cause OF the material reduction in
output which the plan has effected
sugar is in far better position than
1t would have been under free compe-
tition. and that the industry will pros
per at the first sign of world re-
COVerV