San José State University
Department of Economics

applet-magic.com
Thayer Watkins &
Silvia González

Silicon Valley
& Tornado Alley
USA

The Economic History and Economy of Cuba

History

Columbus' first landfall was an insignificant island in what is now the Bahamas. His second landfall was one of the largest islands in the world, Cuba. Columbus' expedition explored along the north-northeastern coast of Cuba. After apparently rejecting Cuba as a colonization site Columbus sailed east to the island of Hispaniola where he did establish the first Spanish colony in the Americas.

Spanish colonies were later established in Cuba but only in 1511 after a lapse of nearly twenty years. The task of subduing the natives of Cuba was assigned to Diego Velázquez de Cuellar, the governor of Hispaniola who had subdued the natives there. In gaining control over the Cuban natives Velázquez was assisted by Bartolomé de Las Casas, a Dominican friar who went first to the native villages to try to convert them and get them to accept the control by the Spanish. Las Casas was appalled at the severe treatment of the natives and later in Spain participated in an extensive debate on the question of the morality of Spanish conquest of the natives of the Americas. Las Casas' charges were the foundation of the Black Legend of the Spanish Conquest.

When Cortez and Pizarro confirmed that lands to the west contained fabulous treasures Cuba became a staging area for expeditions to the west and a way station for convoys traveling back to Spain.

Although technically the administrators in Cuba were subject not only to the Viceroy of New Spain (Mexico) but also to the local authorities in Hispaniola in practice they functioned with autonomy. The land and native labor force were assigned to favorites of the administrators to use as they saw fit. An anecdote from the records of one of the early exploratory expeditions for the mainland which stopped for provisions in Cuba gives an idea of conditions in Cuba. A group of natives were being worked so severely by their Spanish overseer that they decided to all commit suicide. One night they went into the woods to hang themselves from the trees there. But their overseer had heard of their plans and followed them into the woods and confronted them. He told them that if they committed suicide he would also do so to follow them into the afterlife and work them even harder and more severely there. This prospect made the natives change their minds about killing themselves.

In Cuba the first industries were stock raising and food production for outfitting the expeditions. In the seventeenth and eighteenth centuries cattle hides for leather were the most important export of Cuba to Europe. Tobacco was also an important crop. Sugar cane growing was encouraged early but was not successful until the eighteenth century and became the major industry of Cuba only in the nineteenth century. It developed as a result of local initiative rather than as a policy decisions from Madrid.

As the native labor force decreased due to disease, social upheaval and ill treatment African slave labor was imported. There had been African slaves brought from Spain by the conquistadors. Later slaves were brought from Africa on a massive scale and by 1825 the black population of Cuba exceeded its white population.


British ships shelling Havana in 1762

In 1762-63 the British occupied Havana and lifted the Spanish mercantilist restrictions on trade. Although the occupation lasted only 11 months it had a long lasting impact on trade with Cuba. The British North American traders who engaged in trade during the occupation were difficult to deter from continuing that trade once Spain regained control of Havana. This was especially true after the successful slave rebellion in Haiti in 1790 cut off access to the sugar and coffee of Haiti.

In the 1850's the U.S. developed an interest in acquiring Cuba, by purchase if possible by invasion if necessary. There were Cuban elements that supported the acquisition of Cuba by the U.S. On the U.S. side the impulse to acquire Cuba was tempered by the opposition of northern elements to extending the area of the country subject to slavery. After the Civil War in the U.S. and the abolition of slavery the slave-owning elements in Cuba were no longer interested in being annexed by the U.S.

While most of the Spanish Empire territories in the Americas achieved independent nationhood in the 1820's Cuba continued under Spanish control until 1898. The United States, fearing that weak Spanish control of Cuba would be replaced by stronger British or French control of Cuba, tolerated continuing Spanish control during most of the 19th century. There were unsuccessful rebellions, notably in the 1860's and 1870's.

The Ten-Year War for Cuban
Independence of 1868-1878

The Cubans were driven to rebellion in the mid-19th century by vacillating Spanish policies and their enforcement. Spain was undergoing political upheavals during that time and the Spanish government fluctuated between those adhering to the traditional conservatism of church and aristocracy and those wanting to open Spanish society to business and trade (liberalism in the classical European sense). On top of the fluctuating policies there was the variation in the severity of the administrative officials enforcing the policies. Some representatives of Spanish authority ruled harshly, some ruled with an understanding of the purpose of authority was to promote the general welfare of the population under their administration.

When Spanish policies of protectionism for Spain conflicted with the interests of the sugar plantations owners the plantation class rose in rebellion. In 1868 the rebellion broke in Oriente Province in eastern Cuba. It was led by Carlos Manuel de Céspedes y Quesada, the son of a wealthy plantation owner.

From his plantation Céspedes issued a manifesto calling for Cuba independence from Spain because of

Céspedes freed his slaves and organized them into an ill equipped, untrained rebel army. He called for the eventual freeing of all slaves in Cuba with compensation paid to their owners. He tried to obtain political recognition of his movement by the U.S. government and was unsuccessful. Céspedes was the political leader of the movement but the military command was in the hands of a man from the Dominican Republic, Máximo Gómez.

One outstanding commander of rebel forces was Antonio Maceo. Through daring tactics he inflicted losses on the Spanish forces and disrupted the operations of the sugar plantations in eastern Cuba and prompted the escape of their slaves.

Although Maceo was successful militarily, those successes were having an adverse effect politically. The plantation owners noted that Maceo was a mulatto and his troops were black. This raised the possibility that the rebellion would lead to a black republic ruled by Maceo similar to what had developed in Haiti. This prospect was distinctly more threatening to the upper classes of Cuba than the continuation of corrupt, incompetent Spanish rule.

The war dragged on for ten years. In 1878 Spain negotiated an end to the rebellion with a pact that all of the rebel leaders except Maceo accepted. He and his troops attempted to fight on but facing the full force of the Spanish forces had to give up. Maceo went to Jamaica and from there he went to New York to try to raise funds for weapons to continue the rebellion. He ended up joining former general, Calixto García, who started a new rebellion. That rebellion lasted only during 1879 and 1880 and was dubbed the La Guerra Chiquita, the Little War. The Ten-Years War and the Little War accomplished little militarily but they gave rise to a national Cuban identity where there had been identification by Cubans only with local regions before.

The War and Struggle for
Cuban Independence 1895-1902

Americans tend to think of Cuban sovereignty having been achieved with expulsion of the Spanish which came only with the Spanish-American War. Cubans are more conscious of the three years of Cuban rebellion which preceded the American intervention.

The rebellion which started in 1895 was organized by José Martí. Martí emphasized that the Cuban rebellion had to achieve victory in order to forestall any U.S. intervention. He said that if the U.S. came into Cuba there would be no one in the world powerful enough to get it out. Martí also feared a military dictatorship might replace Spanish colonial control. For this reason he was reluctant to cooperate with Máximo Góez and Antonio Maceo, the military leaders of the Ten-Years War of 1868 to 1878. Eventually he did cooperate with them and worked unceasingly during the 1880's and early 1890's to organize the rebellion. In 1892 Martí formed a political party while he was in the U.S. He called it the El Partido Revolucionario Cubano PRC (the Cuban Revolutionary Party).

In February of 1895 Martí initiated the rebellion. Unfortunately he lost his life in May of that year.

Gómez and Maceo had some successes against the Spanish forces but Maceo was killed at the end of 1896. The Spanish brought in a new, tougher commander and more forces which shifted the control of the war away from the rebel forces. Gómez to the rebel forces to the eastern provinces and began to fight a strictly guerilla style war. Spain tried in 1898 to end the rebellion by agreeing to let Cuba become a self-governing state within the Spanish Empire. Gómez refused this offer and continued the war.

The war was detrimental to the sugar plantations, some of which were owned by American businesses. There was pressure for the U.S. to intervene and end the war by defeating the Spanish forces. The U.S. did declare war on Spain in April of 1898, ostensibly because of the destruction of the American battleship U.S.S. Maine in Havana harbor. But the motivation was deeper. The U.S. saw a need to gain control of the sea routes to the canal which it was going to build in Panama. Cuba and Puerto Rico were keys to assuring protection for those sea routes. After the declaration of war the U.S. achieved a quick and relatively easy victory. The Treaty of Paris which ended the war allowed the U.S. to take over Cuba, Puerto Rico and the Philippines as major prizes but also a few minor possessions such as the island of Guam. The Treaty of Paris allowed for the Spanish citizens in the possessions to remain if they wished and to retain their properties. There were a hundred or so thousand such Spaniards in Cuba. The Spanish soldiers were however repatriated back to Spain.

The American Occupation of Cuba 1899-1902

Two Americans generals served as military governors of Cuba; John Brooke in 1899 and Leonard Wood from 1899 to 1902. The Cuban army was disbanded but Wood created a system of rural guards and many of the Cuban soldiers joined the rural guards. Wood also built hospitals, schools and courts. He provided salaries for the judges. Sanitation was improved and Yellow Fever suppressed. Wood decreed that all males who were literate and owned property or served in the Cuban army could vote. Elections were held for municipal offices in June of 1900. In September of that year an election was held for delegates to a convention to draft a constitution for Cuba.

The Platt Amendment

The U.S. militarily occupied the former Spanish possessions but there were calls within the U.S., including Congress, for Cuban independence. However Senator Orville Platt introduce legislation to the effect that the U.S. would retain the right to intervene in Cuba in the case of domestic political instability. It also called for the leasing of a naval base in perpetuity. This became known as the Platt Amendment.

When a constitutional convention was convened in Havana in June of 1901 to write a constitution for Cuba the Platt Amendment was incorporated in that constitution. That constitution gave great powers to a president to be elected by universal suffrage. The legislative authority was vested in a Senate and a Chamber of Deputies.

The Republic of Cuba

Elections were held and Tomas Estrada Palma was elected president. He had assumed leadership of Martí's PRC after Martí's death in 1895. General Leonard Wood turned authority over to Estrada Palma in May of 1902 and the American occupation ended.

There were a number of conditions which were highly favorable for the success of the Republic of Cuba. There was no remaining indigenous population to create a racial divide that plagues so many Latin American countries. Whites and blacks constituted roughly equal proportions of the population but black/white racialism had not been a problem.

On the negative side there was a culture of corruption in government that stemmed, at least in part, from four centuries of Spanish governance in which, as in the rest of the Spanish Empire, the primary function of government was to extract as much as possible from the populace for remission back to Spain.

The Second Intervention (1906-1909)
in Cuba by the United States

It did not take long for political problems to develop. When Estrada Palma's term was up in 1906 he ran for reelection. Opponents claimed his reelection was fraudulent and rebelled to prevent Estrada Palma from continuing as president. Estrada Palma called for U.S. intervention to end the rebellion.

Charles E. Magoon was established as military governor of Cuba by the U.S. Because this was to be a temporary occupation Magoon did not undertake as much public improvement as had Leonard Wood. Magoon did however command the construction of a sewage system for Havana. He tried to create a body of law that would ensure that the legislation enacted would be fair and reasonable. Similarly he tried to create systems of municipal laws, municipal taxation and a civil service to maintain government operations. Likewise he tried to create a system of laws for the courts.

On the negative side Magoon spent lavishly and left Cuba in debt. He called for elections in 1908 and the winner of the presidency was José Miguel Gómez. Gómez had been the leader of the rebellion against Estrada Palma. Gómez governed from 1909 to 1913.

Gómez narrowly prevented another U.S. intervention in 1912. This incident stemmed from a development during the 1908 election. In that year some black Cubans organized a racially defined political party, called Agrupación Independente de Color (AIC) (Independent Colored Association). The Cuban Senate about 1912 passed legislation which prohibited political parties defined by race. The AIC rebelled and the image of a black rebellion alarmed the U.S. which then invoked the Platt Amendment and landed U.S. Marines at several points around Cuba. To head off this incipient intervention the Gómez government acted swiftly and harshly. It captured the rebels and executed the leaders.

The Administration of
Mario García Menocal, 1913-1921

Mario García Menocal was elected to a four year term to run from 1913 to 1917. He decided to run for reelection and won but allegedly by fraudulent means. Former president José Manuel Gómez led rebellion in protest and captured provinces in the east. The U.S. declared that it would never recognize a government which gained power by non-electoral means. Menocal's government captured the rebels but pardoned them, including former president José Manuel Gómez.

The Global Recession
Following the End of World War I

The war in Europe throttled production in Europe but increased the demand for many products. Producers outside the conflict area found they could sell more and at a higher price than before the war. This applied to sugar. The sugar beet industry was taken out of the competition and Cuba found the war brought prosperity to its shores. The price of sugar in international market jumped from a few cents a pound to something on the order of twenty cents a pound. The plantation owners prospered but so did those who supplied labor and materials to the sugar industry. This did not happen overnight but after several years of war prices for sugar and for the inputs to the sugar industry rose.

Then the war ended and the price of sugar plummeted. Profits turned into losses while the prices for inputs were adjusted to the new situation. In addition, the rest of the world was suffering a sharp recession from the sudden loss in demand for the products they had been producing. This added to Cuba's economic woes.

The economic recession of 1921 in the United States was relatively brief because the government allowed the necessary adjustments to be worked out by markets rather than trying to cure it artificially through government intervention. The recession of the early 1930's turned into a depression that lasted until 1939 despite the program of Roosevelt's New Deal interventionism.

Cuba's hardships were perceived as somehow due to the economic system. The Bolshevik Revolution in Russia gave rise to the belief among many academic intellectuals that economic recessions were due to the capitalist system and that they could be avoided by a socialist revolution.

(To be continued.)

The Administration of
Alfredo Zayas y Alonso (1921-1924)

Alfredo Zayas y Alonso

Alfredo Zayas assumed the presidency of Cuba during the most difficult of times. Cuba was suffering a sharp recession from the decline in sugar prices following the end of World War I. Cuban sugar plantation owners had borrowed funds from the banks during a time when the price of sugar was high and plantation had a high value. When the land value fell some plantation owners found the debt on their land was greater than its market value and they let the banks foreclose. The banks were in severe financial conditions.

The government of Cuba was heavily indebted as the result of the past president. It was heavily in debt and had inadequate means to service the debt so it was virtually bankrupt. Alfredo Zayas was not a dynamic politician; some commented on his being phlegmatic; i.e., sluggish, dull, apathetic. He was of age 60 when he became president.

Zayas came from a distinguished Cuban family. He was an intellectual and a poet. He did not have military experience because early in the war for Cuban independence he was deported to Spain and imprisoned in Madrid. After the end of the war he came back to Cuba and entered public service. He was a member of the Constitutional Convention of 1901. He was forty years of age at the time. He publically opposed the U.S. influence in Cuba without being militantly anti-American. He soon became mayor of Havana and gained substantial experience in public administration. He was a candidate of the Liberal Party for the presidency in the election of 1916 and may have had the largest vote total but a small civil war ensued and Menocal's forces won the war and Menocal of the Conservative Party was deemed reelected.

So this good, decent, intelligent but uncharismatic man became president of Cuba without much in the way of resources to deal with the problems of the times. He devoted himself to working towards such things as suffrage for Cuban women. He also dealt with the issue of the Isle of Pines, a large island off the south coast of Cuba. When the U.S. granted Cuba indenpedence in 1902 it was strictly the island of Cuba. The Isle of Pines was sparsely settled. In fact, there were more Americans living on the Isle of Pines than Cubans. To strengthen Cuba's hands in negotiation over the Isle of Pines the Cuban government wanted a quick increase in the number of Cubans living on the Isle of Pines. Zayas achieved this by putting a prison on the island. The negotiations were successful and the Isle of Pines became part of the Republic of Cuba and the name was changed by Fidel Castro to the Isle of Youth.

Zayas' administration was labeled corrupt although it was no more corrupt than previous or subsequent administrations. Zayas was perceived to have been a weak president and his lack of a military background was not lost on the Cuban populace.

The Emergence of a Politically
Active Student Movement in Cuba

Students in higher education are generally a privileged class in most countries but especially so in Hispanic countries. In Cuba and elsewhere university graduates had been virtually guaranteed a comfortable prestigious career. The economic downturn after World War I resulted in many graduates not finding career positions in line with their expectations. In 1922 this dissatisfaction turned into political organization. The students at the University of Havana, the only institution of higher education in Cuba at the time, formed the Federación Estudiantil Universitaria (FEU) (the Federation of University Students). Through the occupation of university buildings and a boycott of class attendance the student pressured the university administration of to grant some academic and administrative reforms. They also obtained an increase in student subsidies. Further they got the university to create a permanent University Reform Committee composed of professors, students and past graduates. This initial activity of students was concerned only with university issues, but the student organizations continued and began to take stands on political issues outside of the university.

The students could not help but be influenced by the ideological turmoil that was developing in Europe in the 1920's. First there was the Bolshevik Revolution of 1917 that catapulted otherwise undistinguished people like Lenin, Trotsky and Stalin to positions of power. Then in Italy in 1924 former socialist, Benito Mussolini, took power in Italy on a nationalistic program. It looked to many that liberal democracy was a thing of the past and some form of collectivism was the wave of the future.

(To be continued.)

The Administrations of
Gerardo Machado y Morales
1925-1929 and 1929-1933

Gerardo Machado y Morelos

There probably could not have been a sharper contrast in presidents than between Alfredo Zayas and Gerardo Machado. Zayas the mild mannered patrician and Machado the flamboyant, aggressive self-aggrandizer. Before the War of Independence Gerardo Machado and his father had been cattle rustlers. Machado lost two fingers on one hand working in the butcher shop the family ran. In the War of Independence Gerardo Machado rose to the rank of general in his late twenties, the youngest general in the Cuban Army. After the war Machado with his new-won respectability entered business. He stayed active in politics as a member of the Liberal Party, the party of business.

Machado during his 1925-1929 term began undertaking public works projects that were deemed so worthy that even his Conservative Party opponents supported their undertaking. This was a time when the military dictator of Spain, Miguel Primo de Rivera, was undertaking river valley development projects that attracted the interests of governments around the world. Primo de Rivera's river projects became the model for the Tennessee Valley Authority (TVA) in the U.S. Machado's projects were on that scale.

At the end of his term Machado announced that he needed another term to complete his Cuban economic development program and that no one else could complete it. He called for a constitutional convention and selected the delegates for it. Machado's selected delegates rewrote the constitution to provide for a six year term of president and chose Machado to be the first president. There was public outrage particular from the student movement. Machado arranged for an election in November of 1928. Before the election he managed, by bribery and coercion, to have himself designated as the candidate of all the major parties. Thus he ran unopposed for president in the November election. He thus won a six year term to run from 1929 to 1935.

The political opposition to his electoral chicanery was combined with the public consternation about the economic downturn that started in 1929. This was the Great Depression of the 1930's. For information on the origins of the Great Depression see Origins.

The organized opposition to Machado consisted of:

Supporting Machado were:

In addition Machado had the acquiescence of the Hoover administration in Washington, D.C.

Machado fought his opposition ruthlessly. He closed Havana University temporarily and abolished the student organization FEU and the University Reform Commission. He had the University Council expel the student leaders. This led to protest demonstrations and in one of them a student leader was killed.

To counter the opposition of the labor unions Machado had the non-Cuban leaders deported back to Europe.

It seemed that the forces allied with Machado were too powerful for the opposition to overcome, but things changed. In 1933 the new U.S. president, Franklin Roosevelt, sent in his close friend, Benjamin Sumner Welles, as ambassador to Cuba to negotiate a resolution of the political situation. Many Cubans welcomed this American intervention but not the hardcore opposition. Furthermore it could not have been lost on the Cubans that while Sumner Welles was an effective negotiator he was in his private life a rather flamboyant homosexual. Granting such an individual an important role in determining Cuba's political destiny was a major affront to Cuban pride.

Instead of settling things Sumner Welles efforts only made the situation more unstable. A general strike developed and there was dissension in the army leading to several abortive revolts. Oddly, the Communist Party, which had been calling for a general strike for years, opposed the strike and issued a call for workers to return to work and the basis that a general strike could lead to American intervention. The Communist Party's creditability never recovered from this faux pas.

In August of 1933 Gerardo Machado resigned and left Cuba. Sumner Welles and the leaders of the army selected Carlos Manuel de Céspedes to be the new president. He was the son of the man who initiated the Cuban rebellion in 1868 that led to the Ten Years War. Céspedes tried to return things to normalcy but the economic depression was making that impossible. Céspedes abrogated the constitutional changes that Machado had engineered in 1928 to allow him to continue as president, but that restored the constitution of 1901 with its despised the Platt Amendment. Vigilantism broke out not only against Machado's agents but also against businesses, American and otherwise, who might be responsible for the economic depression. By September it was clear that Céspedes had failed to curb the social and political turmoil.

The Emergence of the Generation of 1930
and the Radicalization of Cuban Politics

The overthrow of Machado was generally attributed to the students of the time and this led to the notion of the Generation of 1930 as heroic and incorruptible. One prominent student leader of the time was Eduardo Chibá who continued for a couple of decades to speak for the Generation of 1930.

(To be continued.)

The Revolutionary Conditions of 1933-1934
and the Emergence of Fulgencio Batista y Zaldivar

When Céspedes failed to gain significant support the conditions became truly revolutionary. The rank and file of the army were virtually in a state of revolt. Some of the conditions were economic. The Cuba soldiers were not getting pay increases and promotions were severely limited. Other conditions were political. The officers of the army supported Machado, so when Machado was overthrown the officer corps of the army suffered a loss in status. Any army is highly dependent upon the sergeants for maintain command. If the sergeants in an army stop obeying their officers then there is little that the officers can do. In 1933 the sergeants stopped taking orders and began to issue orders. One sergeant in particular began to rule the army. His name was Fulgencio Batista y Zaldivar. Batista was a stenographer with the rank of sergeant. As such he was privy to what was going on among the high ranks of the Cuban army. Bastista was also the head of the soldiers' union. This gave him connections with the corps of sargeants throughout the army. Officers seeking to organize a coup d'etat must build a clandestine network by surreptitious contacts; the head of a soldiers' union has the network readymade.

So in 1933 Sergeant Fulgencio took control of the Cuban army. He arranged a meeting with the Directorio of the students' movement and they agreed that Céspedes had to be deposed. The replacement was to be a committee of five, a pentarchy. Below is a picture of that pentarchy in 1933.

The members of the pentarchy, from the left in the picture, Josée M. Irisari, Porfirio Franca, Guillermo Portela, Ramon Grau, and Sergio Carb. Fulgencio Batista was not a member of the committee but he is there on the right for the photograph. The pentarchy did not last long. When one member of the committee promoted Batista to the rank of colonel without the approval of the whole committee another member quit. The pentarchy fell apart. It was created on September 4 of 1933 and it collapsed on September 10th.

The Presidency of
Ramón Grau San Martín in 1933-1934

Ramón Grau, a professor at the University of Havana and a member of the pentarchy, was selected to form a new government. He was the favorite of the students' movement because of his relatively radical stance on political and economic issues. In particular he was perceived as being adamantly oppose to American interference in Cuban affairs. That resulted in the U.S. government not giving formal recognition to his government. The withholding of American recognition then lost him creditability within Cuba. The ABC group attacked the regime with urban terrorism. The small Communist party attacked him with rhetoric. In early January of 1934 Fulgencio Bastista, as the effective head of the Cuban army, dismissed Grau and appointed Carlos Mendieta to take his place. A few days later the U.S. government gave formal recognition to Mendieta's government.

Fulgencio Batista


Fulgencio Batista

Fulgencio Batista was the effective ruler of Cuba for the next ten years, although in only four of those years was he officially president. Bastista's life reads more like a work of imaginative fiction than real life. He came from a very poor family in Oriente Province and had to leave school early to help support the family. He later returned to school at night to complete essentially elementary school. His family was of Hispanic, African, Amerindian and possibly Chinese descent. He described them as just Cuban. Socially he was classified as mulatto.

He worked at numerous unskilled occupations in his youth. At age of about 20 he joined the Cuban army as a private. He took training as a stenographer and rose to the rank of sergeant. As stenographer he was privy to some high level affairs, such as the trial of the student leaders during the Machado administration.

During his tenure as the ruler of Cuba from 1934 to 1944 he promoted social welfare program and had he not come back and took power again through a military coup in 1952 he would have been generally considered a progressive political figure. It is notable that that Batista was the only non-white ruler of Cuba from colonial times to the present.

One of the embarrassments of the Communists in Castro's government is that the Communist Party of Cuba supported Batista. It did so because Batista, coming from a union background, supported union autonomy. That is to say, he did not believe the government should take control of the unions. Because the Communist Party of Cuba controlled so many of the unions Batista's stance on union autonomy meant that the Communists could continue to control the unions.

Batista permitted a free election to be held in 1940. He was a candidate for the presidency and expected to win fair and square. He did win against Ramón Grau San Martín, the President he had ousted in 1934. Ramón Grau San Martín and his Partido Auténico had re-emerged in the movement to create a new constitution for Cuba. This was achieved in 1940.

The Election of Ramón Grau San Martín in 1944

Batista could not under the Constitution of 1940 run for reelection. He handpicked Carlos Saladrigas Zayas to run in his place. The election was free and fair and Ramón Grau San Martín of the Partido Auténtico won instead. Batista did what he could to make it difficult for Grau San Martín to govern, such as emptying the treasury. Batista then went into voluntary exile.


Ramón Grau San Martín

At this point I want to introduce a statement from a dear friend who is originally from Cuba and witnessed the events that followed Ramón Grau San Martín election. This statement came as a response to an inquiry asking her if she had read the book The Manchurian President by Aaron Klein. Here is her response:

No, we haven't read the book. I have read about it and believe everything I know the author says. Remember we went through a "revolution" by a supposed saint that was going to save Cuba. The only problem we had, at that time, was of elected presidents that ended multimillionaires, but the country continued to prosper.

This had been going on since 1944 when Dr. Ramon Grau San Martin was elected. His Authentic Party (the equivalent to the Democrats here) were more than thieves of the Treasury; they took the furniture from the Presidential Palace, the china, the silver, the tiles, the beds & bedding. The Yellow Diamond that signaled the Zero Kilometer of the Central Highway [to be returned later due to the scandal] the gold spikes on the Lions of Paseo del Prado. You name it and Dr. Grau, the Professor of Medicine, and his sister-in-law took it, and moved it to the mansion [that Dr. Grau referred to as the "shack"] that he "built" on the aristocratic 5th Ave. His sister-in-law was a full fledged delinquent and her favorites in government followed her example and became multimillionaires too. She became, at the time, probably the richest woman in Latin America. Here are some of the followers of Dr. Grau. His favorite was Paulina Alsina, the widow of Dr. Grau's brother and de facto First Lady [and main thief]. Dr. Carlos Prio Socarras [a lawyer with a long history as a semi-gangster as a student] was elected President. His wife was a darling of Paulina who arranged the marriage. Prio had a couple of brothers, one he appointed Minister of the Treasury[equivalent of Treasury Secretary here] who ordered the burning of millions of pesos of old paper currency, that was never burned and that he took to Miami and bought property and put in banks there.

There was scandal after scandal.

Gangs of different factions were cultivated by Dr. Grau, a deviant personality not very manly and full of hatred. Those factions were quasi-gangsters groups. They originated as part of different political groups that worked to overthrown President Machado in the early thirties. Some of them connected with student groups at the University of Havana. During the government of Dr. Grau San Martin [1944-48] he provided money and positions in the government and police for members of the various rival gangs. He even placed them in office buildings where they will run into each other.

I was in school when a horrible carnage happened. One faction of politicians went and attacked the home of another faction. The situation was so grave that the schools stopped classes and send us on the school buses to our homes. The house where the shooting took place was occupied by a Colonel of the Cuban Armed Forces who was associated with one of the gangs. His house was surrounded by members of a rival gang, among them police officers, and it became a tremendous battle and eventually the government had to send armored vehicles to put an end to the shooting.

The carnage was incredible; women, children, everybody was killed in the house. Prio inherited it. Every day there were people killed and retaliation followed. All of these gangs claimed to have some ideological political differences (product differentiation) but the truth is that they were fighting for power positions and government privileges and also extorting money from private firms. Everything came to a head when the owner of a radio station denounced the dirty business and the laxity of the President and his appointees, and was gunned down.

The chief of Police, the head of the Army etc. went to see Batista, who had returned to Cuba, after going into a voluntary exile in 1944 after the very honest elections when the idiots voted for Dr. Grau. Batista returned under Dr. Prio's regime after he ran for senator [from his exile] and was elected and thus was under legal protection and could come back. Batista agreed to carry out a coup-d'état, in the face of the gangsters' war and lack of security facing citizens. Not a single shot was fired. Batista went to the Columbia Military Camp; the guard said "Who is there?" Batista replied, "General Batista," and the guard's answer was, "At your command, General." People were happy at the time. But Batista had a new wife. She had a child every year, was a very poor woman full of ambition and she wanted money & power. Batista came into power on March 10, 1952 and should have had elections within at least in two years. But he did not. The Army became very corrupt, and Batista's wife's brother was one of the top power brokers. They felt it was their time to become millionaires. The Cuban military planes were used to bring merchandise, all electrical equipment, from Miami. It was sold from a big store at lower prices than its competition. It had electrical appliances and equipment bought in the U.S. with no cost of transportation and no customs duties. People flocked to buy these "bargains" and the other merchants were livid because they had no sales and were losing money. The friends of the military became boutique owners. It was the same thing, they sold cheaper and people went to them to do their shopping.

People were very upset. The communists saw the opportunity. Fidel Castro was a gangster, a coward that shot people in the back, or sent others to be the killers. His was a very black history. But either people did not know or ignored it. When you told people, as I did as a very young student, about Fidel Castro's gangster days they said, "He was very young then, he has changed....." All that people wanted, and mainly the younger people, young professionals, was a fast growing middle class [clean/honest and hard working] with honesty in government. That Fidel Castro promised. However his first action, unknown to people, was to take a check made to the Republic of Cuba for several millions [for products sold] and deposit it into a foreign account of his. This was the beginning of a billionaire fortune.

We know the rest of the story. Fifty years of murder, thievery, divisions...you name it ...it happened in Cuba and the saga continues. The U.S. government has given visas to murderers, to those in State Security, they go in our face with their crimes unrepentant with their money taken from the Cuban people. Living in luxury with their families. Move on....nothing to see here.

(To be continued.)

Cuba

The Historical Demographics of Cuba

The following is the list of the major population movements for Cuba:

PeriodNature of
Movement
Major
Source
Approximate
Number
1500-1800Plantation
Slaves
Senegal & Guinea800,000
1853-1874Plantation
Laborers
Canton, China125,000
1900-1929SettlersSpain1,000,000
1919-1926Plantation
Laborers
Haiti & Jamaica250,000
1920-1929Plantation
Canton, China30,000
1959-1973Escape from
Totalitarianism
Cuba600,000

The Ethnic Racial Distribution of the population

The Ethnic Racial Distribution of the Cuban Population
YearEuropeanMixedAfricanAsian &
Other
189966.9%17.2%14.9%1.0%
194374.3%15.6%9.7%1.1%
195372.8%14.5%12.4%0.3%

Cuba Before 1959

Cuba was not a backward banana republic before 1959. In fact, there were an extraordinary number of achievements relative to the rest of Latin America and sometimes relative to the rest of the world that took place there. For a list of those Cuban firsts see Cuban Firsts.

The 1956 Invasion of Cuba by Fidel Castro
and His 81 Supporters on the Yacht Granma

In his biography of Julio Lobo, The Sugar King of Havana, John Paul Rathbone gives this description of Castro's initiation of his revolution:

The sea voyage that Guevara had made with Fidel Castro and eighty other rebels across the Gulf of Mexico had been an unmitigated disaster. It had taken seven days, instead of five. Then, weakened by seasickness, the rebel force had landed at the wrong spot on Cuba's coast. Their navigator had fallen overboard just before landing, and the boat had run aground on a sandbar, turning their arrival in Cuba into more of a shipwreck than a landing. The expedition had then slogged through mangrove swamps, jettisoning most of its equipment, leaving the rebels with only rifles, cartridge belts, and a few wet rounds of ammunition. They had tried to satisfy their thirst and hunger by chewing on sugarcane in the fields […]. Fooishly they left a tellltale trail of bagasse, or cane peelings, all over the place. The next day they were ambushed by Batista's forces. In the melee that followed, Guevara was hit by a ricochet bullet in the neck. Blood poured from his wound, and Guevara, who had trained as a doctor, believed himself mortally wounded and went into shock. […]
 
Of the eighty-two men who came ashore, only twenty-two ultimately regrouped in Cuba's eastern mountain range, the Sierra Maestra […].

Clearly Fidel Castro's strength was in public relations and propaganda rather than organization.

The Castro Regime

Few expected the downfall of Batista in 1959 to bring an ideological revolution. Dedicated supporters of democracy thought that helping Fidel Castro come to power would bring democracy to Cuba. When the celebration of revolution ended and the Castro regime began to effectively nationalize the property of American businesses in Cuba people realized that something different was involved than a routine change of government.


Fidel Castro

For the family background of Fidel Castro and its influence on his personality and his rule see Castro and his father. From his father's experience in the Spanish-American War and his own upbringing Fidel Castro developed a deep and abiding hatred of America and Americans. Patrick Symmes in his book The Boys from Dolores about the Jesuit boarding school for the Cuban elite that Fidel attended gives an interesting anecdote. When the school was touring some the sites of what Cubans called the War of Independence Fidel said announced to some companions, "Here is where we beat the Yankees!" One of his companions said, "But Fidel, the Yankees were on our side!" Of course, from his father Fidel identified with the Spanish rather than the Cuban insurrectionists. In his heart later in life Fidel continued to be a Spaniard. As a young man Fidel studied the political philosophy of José Antonio Primo de Rivera known as National Syndicalism that became the official ideology of the Franco regime in Spain. When Fidel began to antagonize American interests Franco sent Fidel a message saying "Give the Yankees hell, Fidel." When Franco died Fidel ordered flags in Cuba to be flown at half-mast for a week.

Fidel's ideology was ambiguous except for being autocratic. His adoption of communism can be explained in part as a device to court the support of the Soviet Union, which he needed for support in his battle with America. But it also was that a communist leader had more absolute power than the leader of any other ideology. In his implementation of communism he put Cuban Communist Party members into positions of power in preference to people who had followed him in the days of revolution despite the fact that the Cuban Communist Party had supported Batista. The Communists had supported Batista because he, as a supporter of labor union independence, had allowed the Communists to maintain control of labor unions in Cuba whereas other Cuban leaders tried to control the unions themselves. Batista's rise to power came from his being the head of the soldiers' union. It did not hurt Batista among the Communists that he was philosophically a social democrat, a member of the Cuban left.

Some people believe that Fidel Castro may be mentally deranged. As a young man he was known as El Loco (the crazy one). He once rode his bicycle downhill into a wall on a dare. Another time when his father denied him the use of the family car he threatened to burn the car up. If he wasn't given to megalomania and paranoia when he came to power the events afterward would certainly have pushed him in that direction. His secretary from his days in Mexico through his days as Maximum Leader in Havana, Teresa Casuso, finally broke with him and told a reporter on television that she thought that Fidel was insane. Peter Pflaume, a journalist who wrote articles for Atlantic Monthly and other magazines, relates in his book Tragic Island a striking incident. He showed up for a scheduled interview with Fidel and found that Fidel was not there. The receptionist announced that Fidel was very busy. Pflaume noticed a middle-aged woman waiting in the office. He waited around for a bit hoping that Fidel would show up to honor his commitment for an interview. One of the people in the office told him that the woman waiting in the office was the mother of a seventeen year old daughter. The woman had told Fidel that she and her family decided that it would be an honor for him to "sleep" with the daughter. The mother was waiting for the "sleeping" to be completed.

Fidel may be a dunce concerning economic policy but he has a genius for public relations. He managed to put the blame for the economic failures of Cuba on the American embargo. Cuba if it has the funds can buy from other countries what it is prohibited from buying from the U.S. because of the embargo. Although Americans are technically prohibited from visiting Cuba that prohibition is not enforced. What really hurts Castro about the embargo is that he is not able to borrow funds from American sources. He has developed borrowing funds and not repaying them into an art form. When Bulgaria asked for payment for tractors sold to Cuba Castro denounced the quality of those tractors and asserted that they were worth nothing. He has sustained the defunct Cuban economy on borrowing funds and not repaying them for decades. When the Soviet Union stopped supplying petroleum he was able to get Hugo Chavez of Venezuela to provide petroleum to Cuba. Everyone except perhaps the Venezuelan people knows that petroleum will never be paid for.

In the early days of Fidel Castro's power he decided that Cuba should break its dependence upon sugar by industrializing. Equipment for manufacturing goods was ordered from Czechoslovakia (on credit, of course). Often when this equipment arrived it was left on the docks because only the top leadership such as the Castro brothers or Ernesto Guevara had the authority to have it moved. Because they were busy with other things the equipment say there on the docks for a long time and rusted.

After the failure of the program of industrialization even the Marxist economists were urging Fidel to return to sugar cane growing. Fidel announced then that Cuba would produce a record ten million tons of sugar cane. The whole country was mobilized to produce that record crop. Fidel announced that anything short of ten million tons would be unacceptable. In the end the production fell somewhat short of the ten million tons. Thereafter there were no more socialist production struggles episodes. Cuba produced sugar and the Soviet Union bought the sugar at a price higher than the market price of sugar and sold Cuba petroleum at a price below market as ways to subsidize the Castro regime.

After the price of petroleum went up in the 1970's Brazil decided to produce alcohol from sugar cane as a substitute for petro-fuels. The Northeast of Brazil was the original sugar-growing area of the Americas. Later when the price of petroleum fell in the 1980's Brazil abandoned its alcohol fuel program but continued to grow cane for sugar production. When that Brazilian sugar hit world markets the price of sugar fell. With sugar prices down Fidel decided to develop a tourist industry. Hotels were built and entertainments including gambling were arranged. Such a tourist industry has an economic problem. About two thirds of its costs are for products that have to be imported. So although tourism now brings in more revenue than the sugar industry much of the revenue from the tourism industry must be expended on imports.

(To be continued.)


The Near-Bankruptcy of the Regime

In October of 2009 four government ministries in Havana closed their canteens that provided free meals to the ministry staff. As with most all institutional meals the quality had been poor, but workers in Cuba have such a low standard of living that the loss of free, although poor quality, meals was a significant loss. The government compensated for the loss by raising staff pay by 15 pesos per day. That is equivalent to about sixty cents American per day. The Communist Party daily newspaper Granma asserted that the free meals were worth less than the 15 pesos. However 15 pesos does not buy much; a bun and a slice of ham is about all.

This change was now only for the four ministries but the government announced that soon the free canteens in about 25 thousand workplaces would be closed. Three and half million Cuban workers will lose their free meals and get an increase in daily pay as compensation. Since this change is part of measures to economize in order to deal with the near bankruptcy of the Cuban economy apparently the canteens cost more than 15 pesos per worker to operate and provide meals that were worth less than 15 pesos per day to the workers. Perhaps Raúl Castro is acknowledging the realities of the socialism created by his brother.

The immediate reality is a financial crisis for Cuba in terms of foreign exchange. The free canteens required the importation of about $350 million in food. Another free food benefit that may disappear the ration of staples that all Cubans receive, or at least are supposed to receive, each month. This free ration is subsistence for only a third to a half of the month.

The government is desperately trying to reduce imports. Military officers have been given power to oversee the financial transactions of the civilian agencies. So far this strategy has reduced the expenditures for imports by 30 percent in 2009 over what it was in 2008.

However the move away from government provision of free meals does foreshadow a burgeoning of free enterprise. The government is expecting the workers who lost their free meals at their workplace to buy meals at the state-run restaurants. The number of permits for Cubans to run micro-businesses such as restaurants is only 200,000 for a nation of 11.5 million. At one time there were 350,000 such permits.

The Ultimate Admission

In 2010 Jeffrey Goldberg, a national correspondent for the magazine Atlantic Monthly interviewed Fidel Castro in Havana. After more than three hours of conversation Goldberg asked him if he believed the Cuban model was still something worth exporting. Fidel Castro replied,

"The Cuban model doesn't even work for us anymore."

Unfortunately Goldberg did not ask if it ever worked.

(To be continued.)


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