In Cuba, sugar was the dominant cash crop and offers a perfect example of the type of relationship that was developing between U.S. businesses and Latin America during the years of export boom. For sugar to be transformed into a consumer product, it needs to be refined. Refineries for mass sugar production required two principle things: the technological know-how and, more importantly, a substantial capital investment to develop the industrial operation. U.S. and Europeans controlled the capital and thus were able to build and own the sugar refineries. Now the question became, who had the upper hand, the refiner or the growers? Increasingly, as you would expect, the refiners, backed by state power, set the price for cut sugarcane. What’s more, the development of in-the-field refineries transformed the nature of sugarcane cutting from an agricultural job to an industrial one. Industrial wages were miniscule; profits for the refineries were vast. Cuba grew to become the dominant sugar producer in the world. By 1920, Cuba was producing close to five million metric tons of sugar, representing 25% of the world’s sugar output. Hyper-dependence on one crop made the Cuban economy tremendously vulnerable, more vulnerable still given that by 1900 around 98% of all sugar exports went to the United States. In an era before free trade agreements, this meant that any shift in trade policy in the United States with regard to Cuban sugar would (and did) have massive ripple effects. Cuban economic dependence on the U.S. was becoming increasingly acute. By 1929, The U.S. investors were pouring close to 1.2 billion dollars into the Cuban economy. This increasing control of the Cuban sugar market by U.S. private companies sparked a nationalist backlash. Increasingly throughout the 1920s, young politicized nationalists began organizing and speaking out for revolution, calling for an end to U.S. interference in and dominance of Cuban economic and political life. What’s more, the environmental impact of sugar growing, which necessitated slashing and burning forests for the production of sugarcane, was severe. Environmental historians have studied the destruction of Cuba’s forests, which at the time of Columbus covered the entire island. In the period of the greatest sugar boom (1914-1929) the rate of deforestation in Cuba spiked as all available land went for the production of sugar. Myriad economic, social and environmental problems resulted from this aggressive attack on the natural world, one of the most significant being the destruction of domestic energy resources (burning wood) and their replacement with (largely imported) fossil fuels (coal and oil).
To sum up the situation between 1914 and 1929 in Cuba, we can distill four trends. First, we see a rising dependence on a single cash crop, sugar. Second, control of this cash crop was increasingly dominated by external interests, primarily in the case of Cuba by U.S. investors (backed by U.S. military force). Third, we see a rise in the overall standard of living on the island as billions of sugar dollars poured in. Fourth, and in contrast, we see a sharply increasing divide between the rich and poor, between a growing middle class and a huge underclass of cane-cutters working long hours and earning very low wages. These trends set the stage for volatile reaction when sugar prices fall drastically in the wake of the 1929 Great Crash.
