Cuba Cane

Greatest of the Cuban sugar companies is Cuba Cane Sugar Corp., formed early in the War, now controlling 829,500 acres. Yet despite its dominance, Cuba Cane suffered with all the other Cuban producers when their tremendous output was joined by new peacetime crops from Europe. For many a year Cuba Cane has stumbled on, always seeming on the verge of either collapse or sudden success. But coming on Jan. 1, 1930, is an obstacle no company in poor shape could meet--the maturity of $25,000,000 debentures. To surmount this obligation, a complete reorganization was planned, chief feature of which is that present debenture holders will receive new debentures plus a bonus of common stock in the new company. Last week, after 84% of the debenture-holders and 80% of the stockholders approved the plan, Cuba Cane asked for a receiver as first step toward reorganization. A prime motive for proceeding through a receivership was suspected to be so that the remaining 16% of the debenture holders will be "frozen out," thereby prevented from disrupting plans by demanding payment Jan. 1. Although conditions have often seemed hopeless in the sugar industry, many a grower believes that the lowest point has been reached and that from now on returns will be satisfactory. With the increase in population, sugar consumption has steadily increased at an average annual rate of about 7%. While production soared much swifter than that for a few years, there is no indication that it will increase much above the present figure. For these reasons of increasing demand and a constant supply, the price trend should be upward and only a slightly higher price can bring much greater returns to the growers. It is estimated that an increase of .0025 in the present price (about .0193 in Cuba; .0230 in the U. S.) would be enough to bring an end to all the troubles of the Cuba Cane Co., whose chairman is famed Charles Hayden of Hayden, Stone & Co.

Despite these optimistic predictions, some of the debenture and stockholders who had not agreed to the proposed re-organization hinted that the main trouble lay not in the agricultural conditions but the management. Through a spokesman they said, "We propose to organize a committee to resist the receivership on the ground that such receivership would represent a retention of control and extension of influence by the same group responsible for this magnificent ruin. . . . The receiver proposed (John R. Simpson, president of Cuba Cane, Vice President and Director of Sinclair Consolidated Oil Corp.) is not qualified as he is not a sugar man but an oil men."