General Sugar Co.
Before becoming president of The National City Bank of New York (National City) for twenty five years in 1855, Moses Taylor (1806-1882) had been involved in the sugar trading business with Cuba. After being the first US bank to open an overseas banking office in Argentina in 1914, National City opened its first office in Cuba on July 17, 1915 just when the Dance of the Millions era was getting started. In 1916 National City entered into an agreement with the stockholders of the Bank of Habana and that year the Bank of Habana was merged into National City thus becoming its overseas banking office in Cuba.
During the WWI years when sugar prices skyrocketed, National City along with Chase and other big money center banks made extensive loans and investments in Cuba, in the case of National City totaling 80% of its capital in 1921. When sugar prices dropped from 20.5¢ per pound in May 1920 to 3.75¢ in December of that same year, many Cuban sugar producers defaulted on their loans leaving National City with a substantial portfolio of about $60 million of non-performing loans that represented a big problem. In 1922 Charles E. Mitchel then President of National City, organized the General Sugar Estates, Inc. as a subsidiary of the National City Co. an affiliate but not subsidiary of National City, to assume and manage the properties the bank had foreclosed on and bring them back into profitable operation. By 1927 the Cuban sugar industry had not yet recovered and National City still had about $30 million in non-performing loans related to the sugar mills owned by General Sugar Estates, Inc., still quite a substantial amount.
To solve the non-performing loan situation which was being criticized by the bank's examiners, in 1927 National City’s securities affiliate, the National City Co. floated a $50 million stock issue to its shareholders. Half of the proceeds went to buy newly issued stock of National City and the other half was added to National City Co. capital. National City Co. then invested $25 million in General Sugar Co. which funds were used to buy the non-performing loans from the bank. Since National City had no direct investment in General Sugar Co., Mitchel was able to remove the liability from the bank's books and place it on the shareholders of National City Co. which was not subject to Federal examination.
The Louisiana Planter and Sugar Manufacturer edition of March 10, 1923 states that "Mr. Mitchel is quoted in Havana dispatches as stating that the City Bank had control or ownership of seven sugar estates and mortgages on twenty others." Antonio Santamaria Garcia in his book Sin Azúcar No Hay País states the following subsidiary companies and sugar mills were owned by General Sugar in 1925;
Compañia Azucarera San Cristobal - Owner of Central San Cristobal, established by Col. Rafael Peña in 1920, acquired from S. Calcaveccia.
Compañia Azucarera Habana - Owner of Central Habana.
Compañia Azucarera del Norte - Owner of Central Progreso, acquired from Laurentino Garcia who had owned it since 1907 first under the firm Bango & Garcia and in 1913 solely in his name. It was acquired in 1932 by José Arechabala S. A.
Santa Clara Operating Co. - Owner of Central Santa Rosa acquired from V. Gonzalez Abreu and Central San Isidro acquired from co-owners José Maria Beguiristain and Federico Almeida. Begurastain also owned Destileria El Infierno. Almeida was partner with José Marimón who was head of Cia. Azucarera Oriental in Santiago owner of Central Esperanza, Central San Miguel, Central Concepción, Central Sabanilla, Central San Cayetano and Central Marimón, all in the Oriente Province. Marimón was president of Banco Español and due to the bankruptcy of all his businesses, including the bank, left the island in 1921 with unknown destiny never to return. In 1919 Andrés Godoy, second in command at the bank, had left Cuba for Paris where he established himself as a poet.
Compañia Azucarera Vertientes S. A. - Incorporated in 1914, owner of Central Vertientes built in 1921 and of Central Agramonte built in 1915. The Louisiana Planter and Sugar Manufacturer edition of September 4, 1920 reported that Cia. Azucarera Vertientes S. A., owners of Central Agramonte, have let the contract for this new factory Central Vertientes to the Sugar Factories Construction Co. of Havana and New York. It will be located south of Agramonte Sugar Mill and is to have a capacity of seven hundred thousand bags of sugar annually, one third of which is to be installed for the coming crop and the remaining two-thirds for 1921-1922. Was rehabilitated in 1946 after being out of operation from 1932 to1945.
Camagüey Sugar Co. - Incorporated in Delaware in 1922, owner of the Central Camagüey, Central Estrella built 1918 by Federico Almeida and Central Pilar, the last two formerly owned by Domingo León who was involved in several speculative deals.
Santo Tomás Operating Co. - Owner of Central Santo Tomás.
Vertientes-Camaguey Sugar Co., was incorporated in Delaware in 1937 to acquire all the properties of the Camaguey Sugar Co. and the Cia. Azucarera Vertientes S. A. Cia. Azucarera Vertientes-Camaguey de Cuba was incorporated in Cuba in 1942 as its successor. The properties of Cia. Azucarera Vertientes-Camaguey de Cuba included three operating mills: Central Vertientes, Central Estrella and Central Agramonte. It also operated an alcohol distillery inactive after 1951 due to lack of demand for export alcohol, a refinery at Central Agramonte and the private sub-port known as Santa Maria. In September 1959, the Company owned one hundred thirty four thousand acres, leased forty five thousand nine hundred acres and had eighty two thousand two hundred acres of independent lands under grinding contracts. Additionally, it owned two hundred seventy four miles of standard gauge railroad with locomotives and railroad cars. Its subsidiaries were Cia. General de Haciendas Azucareras, S. A. of Cuba, General Sugar Estates, Cia. Ganadera Agramonte of Cuba and had direct and indirect ownership in cattle raising, Corredores Independientes de Seguros, S.A. of Cuba, Cuban Sugar Plantations, Inc. of New York, and Vertcam, New York, Inc. company that was organized in 1960 but its stock not then issued.