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The Cuba Company and the Expansion of American Business in Cuba, 1898–1915

Published online by Cambridge University Press:  13 December 2011

Juan C. Santamarina
Juan C. Santamarina
Affiliation:
JUAN C. SANTAMARINA is an assistant professor of history at the University of Dayton.
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Abstract

The Cuba Company was the largest single foreign investment in Cuba during the first two decades of the twentieth century and remained one of the largest corporations. This article presents a detailed history of the commercial networks forged between political officials and North American and Cuban businessmen through the development of the company. These networks proved crucial to the success of the Cuba Company and subsequently shaped the development of the new Cuban Republic.

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Articles
Information
Business History Review , Volume 74 , Issue 1 , Spring 2000 , pp. 41 - 83
Copyright
Copyright © The President and Fellows of Harvard College 2000

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References

1 For a history of the Cuba Company and its impact on Cuban development see Santamarina, Juan Carlos, “The Cuba Company and Cuban Development, 1900-1959” (Ph.D. diss., Rutgers University, 1995)Google Scholar.

2 General Greenville Dodge graduated from West Point as an engineer, fought in the Civil War. and was instrumental in the development of American railroads. He devoted much of his life to railroads and was Chief Engineer for Harriman's Union Pacific Railroad when he became involved with the Cuba Company. Some others include: H. M. Flagler, the Standard Oil president and Florida railroad builder; John W. Mackay, president of the Commercial Cable Company; James J. Hill, president of the Western Railway; Gen. Samuel Thomas: E. H. Harriman, president of the Union Pacific Railroad: Thomas F. Ryan, P. A. B. Widener. W. L. Elkins. and H. M. Whitney, all four part of the W. C. Whitney tobacco syndicate; E. J. Berwind, the coal magnate; Henry Walters, Chairman of Atlantic Coast RR; George G. Haven; G. B. Hopkins: William L. Bull: and Charles D. Barney, founder of the Smith Barney investment firm. See Meetings of the Directors of the Cuba Company: From Incorporation to 1913. 1-15, Cuba Company Records, Special Collections, University of Maryland at College Park Libraries (hereafter coded as CCR), Scries 1, Box A.

3 Meetings of the Directors of the Cuba Company: From Incorporation to 1913, 8. CCR, Scries 1, Box A.

4 “In the United States, the holding company was made possible by a deliberate amendment of the Corporation Law of New Jersey in 1889 to permit this form of combination and the subsequent modification of corporation laws of other States in the same direction.” In Seager, Henry R., Trust and Corporation Problems (New York, 1929), 7Google Scholar. For more on trusts and antitrust problems see Jenks, Jeremiah W., The Trust Problem (New York, 1902)Google Scholar. Dunn, Charles W., The Federal Antitrust Late (New York, 1930)Google Scholar, Sklar, Martin, The Coqiorate Reconstruction of American Capitalism (New York, 1987)Google Scholar. and numerous others.

5 For example, it hired prominent Cubans as lawyers and company officers, gained government subsidies for construction through intimate contact with Cuban presidents and their families (José M. Gómez, Mario G. Mcnocal, Gerardo Machado, and others), had secret representatives in the Cuban Constitutional Convention (Rafael Manduley and Gonzalo de Quesada), and employed other personnel and capital from the United States, Canada, Great Britain, and The Netherlands. Although the Cuba Company was incorporated in New Jersey and had powerful and wealthy U.S. investors, the company's connections in Canada, Great Britain, and Cuba enabled it to successfully carry out its development plans. The impact of U.S. business during the formative years of the Republic has been an important thread in the historiography of Cuba from the early twentieth century. For an excellent examination of the period 1898-1902, which emphasizes the role of the U.S. and of U.S. business, see Perez, Louis A. Jr, Cuba Between Empires, 1878-1902 (Pittsburgh, 1983)Google Scholar and Cuba and the U.S.: Ties of Singular Intimacy (Athens. Ga., 1990)Google Scholar among his other works. For perspective on the early historiograph)- of Cuba and specifically the role of U.S. business and investments in Cuba see. Sánchez, Ramiro Guerra y, Aztícar y Población en las Antillas (Havana, 1927)Google Scholar, En el camino de la independencia: estudio historico sobre la rivalidad de los Estados Unidos y la Gran Bretaña en sus relaciones con la independencia de Cuba, con un apendice titulado de Monroe a Platt (Havana, 1930)Google Scholar. and La expansión territorial de los Estados Unidos (a expensas de España y de los paises hispanoamericanos) (Havana, 1973)Google Scholar; Jenks, Leland H., Our Cuban Colony (New York, 1928)Google Scholar: Chapman, Charles E., A History of the Cuban Republic (New York, 1927)Google Scholar; and Beals, Carleton, The Crime of Cuba (Philadelphia, 1934)Google Scholar. For more recent Cuban scholarship see Santos, Oscar Pino, El asalto a Cuba porla oligarquía financiera yanqui (Havana, 1973)Google Scholar, and Zanetti, Oscar and García, Alejandro, Caminos Para el Azucar (Havana, 1987)Google Scholar among others. For representative examples of North American scholarship, see Foner, Philip S., A History of Cuba and its Relations with the United States (New York, 1962)Google Scholar; Langley, Lester D., The Cuban Policy of the United States (New York, 1968)Google Scholar; Benjamin, Jules R., The United States and Cuba: Hegemony and Dependent Development, 1880-1934 (Pittsburgh, 1977)Google Scholar; Hoernel, Robert B., “A Comparison of Sugar and Social Change in Puerto Rico and Oriente, Cuba: 1898-1959” (Ph.D. diss., Johns Hopkins University, 1977)Google Scholar; Pérez-Lopez, Jorge F.. The Economics of Cuban Sugar (Pittsburgh, 1991)Google Scholar; Ayala, Cesar J., “Industrial Oligopoly and Vertical Integration: The Origins of the American Sugar Kingdom in the Caribbean, 1881-1921” (Ph.D. diss., State University of New York at Binghamton, 1991)Google Scholar and “Social and Economic Aspects of Sugar Production in Cuba, 1880-1930,” Latin American Research Review 301 (1995): 95–124Google Scholar; O'Brien, Thomas F., “The Revolutionary Mission: American Enterprise in Cuba,” American Historical Review 98 (June 1993): 765–785CrossRefGoogle Scholar; Juan Carlos Santamarina, “The Cuba Company and Cuban Development, 1900-1959”; and Dye, Alan Dale. Cuban Sugar in the Age of Mass Production (Stanford, 1998)Google Scholar.

6 See Hagedorn, Hermann, Leonard Wood: A Biography (New York, 1969), 2 volumesGoogle Scholar. Also see Hobbs, William H., Leonard Wood: Administrator, Soldier, and Citizen (New York, 1920)Google Scholar, Hitchman, James H., Leonard Wood: Conservator of Americanism (New York, 1920)Google Scholar. and Wood, Leonard, Leonard Wood on National Issues, the Many-sided Mind of a Great Executive Shown by his Public Utterances, Complied by Evan J. David (New York, 1920).Google Scholar

7 Robert Percival Porter was appointed in 1899 by President William McKinley. His mission was to investigate the newly acquired territories of Cuba and Puerto Rico and report on their social, economic, and political condition. Department of the Treasury, Report on Commercial and Industrial Condition of Cuba, by Porter, Robert P., Cuba and Puerto Rico Special Commissioner (Washington, D.C., 1898)Google Scholar, Treasury Department Document 2072.

8 The Teller Amendment outlawed the annexation of Cuba. The Foraker Amendment outlawed the granting of concessions to American companies by the U.S. Military Government in Cuba.

9 Sir William Cornelius Van Horne claims the idea of the Cuba Company for himself, although acknowledging that there were several groups and individuals interested in building a central railroad through Cuba. Some sources indicate that the idea and formation of the enterprise was initiated in the fall of 1899 at a banquet in New York City given in honor of Van Home. Present at the banquet were all the leading financial, manufacturing, and railroad barons of the times, including Levi P. Morton, E. H. Harriman, Collis Huntington, and others. The list of guests at the banquet, many of whom became incorporators and original stockholders in the Cuba Company, includes most of the wealthiest and most powerful men and families in the United States at the turn of the century. For one of the only biographies of Van Home, see Vaughan, Walter, The Makers of Canada Series, volume 10: Sir William Van Home (New York, 1926), 1–58Google Scholar. However, Percival Farquhar also claims the idea for himself and suggests that he needed to “bring in” Van Home to provide financial backing, contacts, and railroad expertise. For the only biography of Farquhar, see Gauld, Charles A., The Last Titan: Percival Farquhar, American Entrepreneur in Latin America (Stanford, Calif, 1967)Google Scholar. Van Home thought he would have a better chance to build and run a railway before the Republic of Cuba was established due to his contacts in the United States government and with Leonard Wood.

10 Meetings of the Directors of the Cuba Company: From Incorporation to 1913. 1-2. CCR, Series 1, Box A. T. Sandford Beaty of Lord Day and Lord was elected secretary. The law firm of Lord Day and Lord remained general counsel to the Cuba Company for many years, and the lawyers for the company often assumed powerful positions within the company, including the presidency.

11 James J. Hill, founder of the Great Northern Railway and a shareholder and leading figure in the Canadian Pacific Railroad, recommended that William Cornelius Van Home, who worked for him, should be employed as the general superintendent of the Western Division of the Canadian Pacific Railroad. In 1881 Van Home accepted the position. The following seven years saw Van Home rise to increasingly important executive positions, wealth, and power. The transcontinental line was completed under Van Horne's direction in 1886. He served as general manager, was promoted to vice president, and was elected Chairman ot the Board of Directors and appointed President of the Canadian Pacific Railroad in 1888. In the process, Van Home became a Canadian citizen and in 1895 was knighted as an Honorary Commander of the Order of St. Michael and St. George, thus becoming Sir William. He served as Chairman and President of the Canadian Pacific Railroad for eleven years until 1899. He resigned the presidency at the June 12, 1899 meeting of the Board of Directors. Van Horne, however, kept his position as Chairman of the Board of Directors. See Vaughan. Sir William Van Horne, 59-300.

12 It is important to note the difference between the Cuba Company and other U.S. and British investments in Cuba. The Cuba Company's operating subsidies, since incorporation, always maintained a large and important Cuban executive, and stockholder, component. Van Horne and later executives (excluding the brief British control of George Whighain, who temporarily reversed many of Van Horne's policies) insisted on hiring and retaining Cubans at all levels of the company. Van Horne believed that native Cuban management could best operate the company in the context of the nationalist Cuban culture and economy. Moreover, Van Horne believed that Cuban stock ownership of subsidiary companies was an important element in the company's success since it allowed native Cubans to have vested interests in the company. Native Cuban interests in the company. Van Horne argued, safeguarded the company by having Cubans argue, in nationalist terms, for the company as Cuban owners. In the early 1920s, this Cuban management and stockholder participation resulted in the merging of the Cuba Company's railroads with Jose Tarafa's Cuban-owned Cuba Northern Railroad, the exclusion of the British-owned United Railways of Havana from the merger, and an extremely favorable law for Cuban railroads. After 1924, Cuban management and ownership increased. General Electrics Cuban investments provide a contrast to the Cuba Company, “Convinced of the superiority of their corporate culture and the innate inferiority of Cubans, U.S. businessmen continued to view and treat their workers as inferior beings.” See Thomas F. O'Brien, “The Revolutionary Mission: American Enterprise in Cuba,” 765-785.

13 Many of Cuba's economic and political leaders of the twentieth century were educated in universities in the U.S. Most spoke English fluently and felt comfortable with Americans. Several even kept offices in New York and were represented by American lawyers. Many also graduated from the sugar schools in Louisiana. See Heitinann, John A., The Modernization of the Louisiana Sugar Industry, 1830-1910 (Baton Rouge, 1987).Google Scholar

14 Porter later wrote in his report to President William McKinley that the tramways of Havana were “entirely inadequate… the tracks are bad, the cars are old and dirty, drawn by three horses each… the service is extremely bad… Undoubtedly one of the first enterprises completed in Havana will be an entirely new electrical system.” See Robert P. Porter, Report on Commercial and Industrial Condition of Cuba.

15 Elihu Root, later Secretary of War, was the counsel to the American Indies Company at the time.

16 The Canadian Pacific Railroad cost in excess of U.S. $100,000,000 to build. See Pyle, Joseph G., The Life of James J. Hill (Garden City, 1917)Google Scholar, Hedges, James Blaine, Building the Canadian West: The Land and Colonization Policies of the Canadian Pacific Railway (New York, 1939)Google Scholar, Talbot, Frederick A., The Making of a Great Canadian Railway (London, 1912)Google Scholar, and Rylatt, R. M., Surveying the Canadian Pacific: Memoir of a Railroad Pioneer (Salt Lake City, 1991)Google Scholar.

17 Meetings of the Directors of the Cuba Company: From Incorporation to 1913, 2-6, CCR, Series 1, Box A.

18 Quoted in Pérez, Louis A. Jr, “Incurring a Debt of Gratitude: 1898 and the Moral Sources of United States Hegemony in Cuba,” American Historical Review 104 (Apr. 1999): 358.CrossRefGoogle Scholar

19 quote from p. 358, pp. 356-374.

20 Railroads, like other utilities such as electric, gas, telegraph, and later telephone companies were considered under U.S. and Cuban laws as public companies. As such, they came under much more intense regulation than other companies. Railroads, moreover, needed a charter granted by the government in order to operate as a public transportation company.

21 Franchise means legal authority to a certain business. In this case, it means a license to build and run a public railway.

22 Memorandum from Van Horne to himself, bound correspondence, 378, CCR, Series 1, Box A.

23 The law firm Lord Day and Lord Barrett Smith, which remains a very prominent firm (New York, New York), maintains many records in its archives related to the Cuba Company. See files 225 and 232. William R. Day was appointed U.S. Secretary of State on 26 Apr. 1898. His anti-annexationist ideals illustrate the division within McKinleys own cabinet. On 16 Sept. 1898 he resigned as Secretary of State and was appointed to the U.S. peace delegation, the Commissioners for the Peace Treaty, along with William P. Frye (President pro tempore of Senate, R-Maine), Whitelaw Reid (Owner and Editor, New York Tribune), George Gray (Senator, D-Delaware), and Cushman K. Davis (Senator, R-Maine). Secretary Day later was appointed United States Supreme Court Justice, a position he held until 1922.

24 See letters in bound correspondence, 377-382, CCR, Series 1, Box A. Also see Zanetti, Oscar, Caminos Para el Azúcar (Havana, 1987), pp. 213–215Google Scholar.

25 Zanetti, Caminos Para el Azúcar, 214.

26 See the Records of the Military Government in Cuba, 1899-1902, National Archives, Washington D.C., Record Group 140 (hereafter cited as RMGC). These records contain hundreds of revocable permits granted by the Cuban administrators serving under Wood's U.S. Military Government. Revocable permits were granted to anyone investing in Cuba. Many went to wealthy Cubans, but many also went to American companies investing in Cuba.

27 See Louis A. Pérez, Jr., Cuba Between Empires, 1878-1902, chapters 13-18, and Pérez, Louis A. Jr, The War of 1898 (Chapel Hill, 1998)Google Scholar.

28 Leonard Wood to José Villalon, Dec. 21, 1900. RMGC, 1901: 4737, Box 208, Entry 3. Villalon was one of the former Cuban Revolutionary Party representatives to the U.S. along with Jose Miguel Gómez, Manuel Sanguily, Major General Calixto Garcia, and Dr. Antonio Gonzalez Lanuza.

29 José Villalon to Leonard Wood, March 16, 1901, RMGC, 1901: 4737, Box 208, Entry 3.

30 Fernando Vidal to Leonard Wood, Nov. 1901, RMGC, 1901: 4737, Box 208, Entry 3. Vidal reasoned that under Cuban law any municipality had jurisdiction over the use and sale of its own public lands. The municipality legally could sell public land to the Cuba Company as a right-of-way since the Cuba Company was legally constructing a private railroad on private lands which did not fall under the jurisdiction of the Foraker Amendment.

31 Leopoldo Lancio to Leonard Wood, RMGC, 1901, 4737, Box 208, Entry 3.

32 Leonard Wood to Leopoldo Lancio, RMGC, 1901, 4767, Box 208, Entry 3.

33 See bound correspondence, 89-250, 378, CCR, Series 1, Box A.

34 Letter from Van Horne dated 20 July 1900 detailing first phase of the Company's operations, bound correspondence, 100, CCR, Series 1, Box A. The first names of the agents are not mentioned.

35 Memorandum from Van Horne to himself, bound correspondence, 378, CCR, Series 1. Box A. For the problems in Cuban land titles and surveys see Pérez, Louis A. Jr, Lords of the Mountain: Social Banditry and Peasant Protest in Cuba, 1878-1918 (Pittsburgh. 1989)Google Scholar.

36 For more details on right-of-ways, see bound correspondence, 89-250, CCR, Series 1. Box A. For more on the need for overlapping plots of land see Juan C. Santamarina, “The Cuba Company and Cuban Development, 1900-1959,” chapter 5; also see Louis A. Pérez, Jr.. Lords of the Mountain: Social Banditry and Peasant Protest in Cuba, 1878-1918, 108.

37 For example, see letter from Van Horne dated 8 Sept. 1900 in which he talks of a meeting with Wood, bound correspondence, 157, CCR, Series 1, Box A.

38 Leonard Wood, Feb. 7, 1902, Order Number 34, The General Railway Law of Cuba, RMGC, 1902: 118, Box 229, Entries 117-125.

39 See bound correspondence, 157-163, 340, CCR, Series 1, Box A.

40 Horatio Rubens was the former Chief Counsel of the Cuban Revolutionary Party in New York, a close friend of the party's leader, José Martí, and a close friend of the Rockefellers. Rubens later represented the Rockefellers’ stock interests in the Cuba Company and its subsidiaries as a director and executive in the companies.

41 Rafael Manduley later became provincial governor of Oriente. See letter from Percival Farquhar to William Van Horne dated 26 Oct. 1902, explaining Rafael Manduley's role in the Cuba Company, bound correspondence, 336, CCR, Series 1, Box A. Gonzalo de Quesada previously was the Cuban representative in Washington who was ousted in early 1898. De Quesada was subsequently reappointed by President McKinley after the U.S. entry into the war and paid an annual salary of $5,000 by the U.S. government. See letter from Percival Farquhar to William Van Horne dated Oct. 26, 1902, explaining Gonzalo de Quesada's role in the Cuba Company, bound correspondence, 336, CCR, Series 1, Box A. Also see Miranda, Gonzalo de Quesada y, ed., Archivo de Gonzalo de Quesada (Havana, 1948-1951), 2 vols.Google Scholar The Cuban Constitutional Convention was charged with creating the Cuban constitution under which the government of Cuba would function after the end of U.S. occupation. The Constitutional Convention reported directly to Wood. It was composed of many Cuban elites, prominent lawyers, businessmen, and several leaders of the Cuban Revolutionary Party.

42 See letter from Pereival Farquhar to William Van Horne, bound correspondence, 336, CCR, Series 1, Box A.

43 See Pérez, Louis A. Jr, Cuba under the Platt Amendment, 1902-1934 (Pittsburgh, 1986)Google Scholar.

44 Louis A. Pérez, Jr., “Incurring a Debt of Gratitude: 1898 and the Moral Sources of United States Hegemony in Cuba,” 374.

41 See Leonard Wood, Feb. 7, 1902, Order Number 34, The General Railway Law of Cuba, RMGC, 1902; 118, Box 229, Entry 117-125, for the draft of the law and a copy of the final printed version. A Spanish version and an English translation both appear in the records.

46 See letters dated Jan. 23, 1901 to June 24, 1901, bound correspondence, 379, 585-979, CCR, Series 1, Box A. In the early 1920s, Section 3 of the General Railway Law became a major problem for the Cuba Company. At that time, the National City Bank of New York and the Royal Bank of Canada, which had foreclosed after the collapse of the sugar market between 1920-1921 on most of the eastern Cuban centrales they financed, attempted to build their own railroads in order to bypass the Cuba Company railroads and reduce transportation costs. It became a bitter and problematic fight for the Cuba Company against the banks, which was solved only by the Tarafa Law which outlawed private railroads and ports. See Juan C. Santamarina, “The Cuba Company and Cuban Development, 1900-1959” Chapter 2.

47 Meetings of the Directors of the Cuba Company: From Incorporation to 1913, 42-70, CCR, Series 1, Box A.

48 Subsidiary companies are usually formed, especially in multinational and transnational corporation, for tax benefits. In addition, a subsidiary corporation acts as a buffer to the parent corporation and limits the liability of the parent corporation.

49 They incorporated with only $500,000 to avoid paying high incorporation taxes which were determined to be a percentage of the authorized capital stock. The Cuba Railroad Company was incorporated in the Republic of Cuba on 1 May 1902 with its office located at the same address as the Cuba Company. Franklin B. Lord, of Lord Day and Lord, and several other Cuba Company shareholders were the incorporators and also became its directors. Howard Mansfield, formerly legal counsel to the Cuba Company and Secretary of the Board of Directors, became president of the Cuba Railroad Company and Percival Farquhar became its vice president. See Minutes of the Directors of the Cuba Railroad Company: From Incorporation to 1913, 33-54, CCR, Series 1, Box A.

30 Minutes of the Directors of the Cuba Railroad: From Incoqnmition to 1913, 33-54, CCR, Series 1, Box A.

51 See CCR, Series 1, Boxes A and AA.

52 Memorandum from Percival Farquhar to Sir William Cornelius Van Horne dated 1 Sept. 1900, bound correspondence, CCR, Series 1, Box A.

53 Meetings of the Directors of the Cuba Company: From Incorftoration to 1913, CCR, Series 1, Box A.

54 Robert Fleming was the owner of the large British securities firm Robert Fleming and Company. His firm traded securities for numerous wealthy European clients, especially the Dutch and the English.

55 Minutes of the Meetings of the Stockholders of the Cuba Railroad Company: From Incorporation to 1913, 74, CCR, Series 1, Box A.

56 Minutes of the Directors of the Cuba Company: From Incorporation to 1913, 71-79, CCR, Series 1, Box A.

57 George Whigham became Assistant to the President of the Cuba Company and President of the Cuba Railroad Company in 1909 due to Robert Fleming's increased control of both companies. After Van Horne's death in 1915, Whigham became President of the Cuba Company controlling that company and the Cuba Railroad Company. Robert Fleming maintained his controlling shares of both companies until the late 1910s.

58 See Louis A. Pérez, Jr., Cuba Under the Platt Amendment, chapter 4.

59 For more details, see Thomas, Hugh, Cuba: The Pursuit of Freedom (New York, 1971), 475–480Google Scholar. Also, see Foreign Relations of the United States, 1906.

60 The Foraker Amendment no longer applied during the Provisional Government of 1906-1909.

61 See Alan Dale Dye, Cuban Sugar in the Age of Mass Production, especially chapter 6.

62 The only other previous government subsidy or loan was the $1,000,000 in 1904.

63 Meetings of the Stockholders of the Cuba Railroad Company, 87-190, CCR, Series 1, Box A. Also see, Meetings of the Directors of the Cuba Company, 82-130, CCR, Series 1, Box A, and Alan Dale Dye, Cuban Sugar in the Age of Mass Production, chapters 5-8.

64 See Juan Carlos Santamarina, “The Cuba Company and Cuban Development, 1900-1959,” chapter 4 and Alan Dale Dye, Cuban Sugar in the Age of Mass Production.

65 See Juan C. Santamarina, “The Cuba Company and Cuban Development. 1900-1959. chapter 5, and pp. 224-240.

66 Cuba Company and Cuba Railroad Company—President, bound letter volumes, 25 Jan. 1911 to 14 Junc 1911, letter dated 19 Dec. 1911, CCR, Series 1, Box 4.

67 CCR, Series 1, Box 20. Incorporated in Cuba on 4 Aug. 1915. Its purpose was ownersbip of all marine related equipment which was then leased to the Cuba Railroad Company. Service was between Santiago, Cuba and Port Antonio or Kingston, Jamaica. Service began on 6 Nov. 1913.

68 “Thru-traffic excursionists” was the name given to visitors in Cuba who were aboard ships on cruises in the Caribbean. These cruises are analogous to modern Caribbean cruises wherein ships carry passengers from island to island, docking overnight or only for a few days, then moving to the next destination. However, excursionists in 1911 often changed ships and their trip was more complex, involving railroad transfers.

69 See Schroeder, Susan, Cuba: A Handbook of Historical Statistics (Boston, 1982), 453Google Scholar.

70 Santamarina, Victor, El turismo: Industria nacional (Havana, 1944)Google Scholar.

71 A large proportion of which was invested in the 56 mills built between 1914 and 1930 mentioned earlier.

72 Victor Santamarina, El turismo: Industria nacional.

73 Gazeta Oflcial de la Republica de Cuba. Edición Extraordinaria, #95. Havana, 19 Oct. 1934. Decreto Ley #599. See Victor Santamarina, El turismo: Industria nacional.

74 Terry, T. Philip, Terry's Guide to Cuba Including the Isle of Pines (Boston, 1926).Google Scholar

75 Terry, Terry's Guide to Cuba Including the Isle of Pines.

76 Archivo Nacional de Cuba. Fondo Donativos y Remisiones. Caja 710, Numero 12.

77 Thomas, Cuba: The Pursuit of Freedom, 481-493.

78 See letter from Percival Farquhar to William Van Horne, 29 Oct. 1902, bound correspondence, 341-342, CCR, Series 1, Box A.

79 See other letters in CCR, Series 1, Boxes A, AA, and B, relating to relations with General José Miguel Gómez and his family.

80 See Pérez, Louis Jr, Cuba: Between Reform and Revolution (New York, 1989).Google Scholar Louis Pérez argues that in many ways that corruption was a means of distribution of wealth in Cuba, with its origins in the Colonial period. For subsidies, see Deed of Subsidy of the Cuba Railroad, Entry CR-8, CCR, Series 1, Box 15, Letters 1910-1912.

81 See Letters 1912, 1915, Box 4: Sugar, CCR, Series 1, Box 19.

82 For details on getting Menocal elected, see Letter Files 1911, 1912, CCR, Series 1, Box 15.

83 Thomas. Cuba: The Pursuit of Freedom, 525.

84 Meetings of the Directors of the Cuba Company. From Incorporation to 1913, CCR, Series 1, Box A. Raising the authorized stock and selling additional preferred stock allowed for additional financing.

85 See Alan Dale Dye, Cuban Sugar in the Age of Mass Production, chapters 6-8.

86 See letter from Assistant Treasurer of the Cuba Railroad Company to William Van Horne, 21 Jan. 1914, Letter #74, CCR, Series 1, Box 60.

87 See telegram dated 12 Sept. 1915, Letters, 1915, CCR, Series I, Box 21.

88 Farr and Company, Manual of Sugar Companies, 1939 (New York, 1939), 91–92.Google Scholar

89 Louis A. Pérez, Jr., Cuba: Between Reform and Revolution, 195.

90 Woon, Basil. When It's Cocktail Time in Cuba (New York, 1928), 242.Google Scholar

91 Irene Wright spent much of her life traveling in Cuba and writing extensively about the island. She also founded a magazine about Cuba, wrote several books on Cuba, and wrote three articles about the Nipe Bay area which were published in the Bulletin of the Pan American Union. Her papers, which consist of only a few documents, are available at the archives of Johns Hopkins University. Wright, Irene Aloha, “The Nipe Bay Country—Cuba,” Bulletin of the Pan American Union 32 (June 1911): 983.Google Scholar

92 Wright. Bulletin of the Pan American Union. 985. For more of her detailed descriptions and writing, see Bulletin of the Pan American Union 34 (Jan. and Apr. 1912): 86–92 and 471-479.Google Scholar Also see Wright, Irene Aloha. Cuba (New York, 1912).Google Scholar

93 See Ramiro Guerra y Sánchez, Azúcar y Población en las Antillas.

94 See Williamson, Harold F., ed., Evolution of International Management Structures (Newark, 1975).Google Scholar See especially the article by Alfred D. Chandler, Jr., “The Multi-Unit Enterprise: A Historical and International Comparative Analysis and Summary.” Chandler states that, “The coming of the multi-unit enterprise thus led to the creation of a new economic class to manage it. Certainly this new institution and new class have become exceedingly powerful in modern, technologically advanced, market economies. One reason for the power and the influence of the multi-unit enterprise and its managers is that they have been at the center of modern economic development,” 228. After 1902, the Cuba Company's subsidiaries' structures became increasingly complex. Especially after 1924, with the creation of Consolidated Railroads of Cuba, the Cuba Company directly or indirectly owned many subsidiary units, each operating as largely independent companies. See Appendix 1. See also, Chandler, Alfred D. Jr, The Visible Hand: The Managerial Revolution in American Business (Cambridge, Mass., 1977)Google Scholar, The Railroads, the Nation's First Big Business: Sources and Readings (New York, 1965)Google Scholar, and Strategy and Structure: Chapters in the History of the Industrial Enterprise (Cambridge, Mass., 1962).Google Scholar

91 In this way the Cuba Company resembled European businesses that were usually controlled by owners and not managers. This is probably due to the fact that the Cuba Company was mainly a holding company whose only operating business was sugar mills and lands. By 1918. however, with the creation of Compañía Cubana, the Cuba Company no longer directly operated any businesses. The Cuba Railroad subsidiary resembled railroad companies in the U.S. that were controlled by professional managers and not owners and grew to be large and complex structures. The railroad company, moreover, was from the beginning allowed to operate freely, and all operational decisions, and even many long term strategic decisions, were in the hands of the vice president and general manager. Much like Chandler's “multi-unit” managerial model, the Cuba Company's subsidiaries' structures from the beginning were rationally divided among functions and staffed by many professional managers. For example, the Traffic Department, Land Department, Maintenance Department, etc. See the article by Alfred D. Chandler, Jr., “The Multi-Unit Enterprise: A Historical and International Comparative Analysis and Summary” in Harold F. Williamson, ed., Evolution of International Management Structures.

96 Several Cubans were involved with the company from the beginning at high level positions, mainly as attorneys for the company.

97 See Archivo Nacional de Cuba. Fondo: Donativos y Remisiones, Caja 710, Numero 12. “Directorio Oficial” of the Consolidated Railroads of Cuba and subsidiaries in 1925.

98 See Harahan Report of June 12, 1924 by W. J. Harahan, CCR, Series 6, Box 151, 3. Harahan lists the major managers of the organization as: 1) Vice President in charge of Operation, Traffic and Accounting; 2) General Manager; 3) Chief Engineer; 4) Superintendent Motive Power; 5) Superintendent Car Department; 6) Auditor; 7) General Freight and Passenger Agent; 8) General Superintendent Transportation; 9) Assistant General Superintendent Transportation; and 10) Three Division Superintendents and the usual subordinate officers. Harahan was hired to investigate the Cuba Company's railroads and future earning potential as part of the on-going negotiations with Tarafa for a merger of the Cuba Railroad and the Cuba Northern.

99 See Harahan Report of 12 June 1924 by W.J. Harahan, CCR, Series 6, Box 151, 3-4.

100 This was especially the case after the creation of Consolidated Railroads of Cuba in 1924.

101 Archivo National de Cuba. Fondo: Donativos y Remisiones. Caja 710, Numero 12. “Directorio Oficial” of the Consolidated Railroads of Cuba.

102 The Cuba Company had two subsidiaries; it owned the Consolidated Railroads of Cuba and Compañía Cubana. The Consolidated Railroads of Cuba was the Cuba Company's railroad subsidiary holding company which owned two subsidiaries, Cuba Railroad Company and Cuba Northern Railroad Company.

103 Robert B. Van Horne was Sir William Cornelius Van Horne's son who assumed a leadership position in the company after his father died in 1915 and left him his estate.

104 In 1925, Gustavo Pellón was listed in the Consolidated Railroads of Cuba directory as a lower-level executive, “General Accountant.”

105 See Juan Carlos Santamarina, “The Cuba Company and Cuban Development, 1900–1959,” Chapter 3.

106 See Louis A. Pérez, Jr., Cuba and the United States: Ties of Singular Intimacy.

107 Pérez, Cuba and the United States, xvii.