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

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.

The year 1898 had been difficult for both the United States and Cuba. The U.S. entered the Cuban War of Independence, defeated the Spanish, and acquired territories stretching from the Caribbean to the Philippines. Cubans saw their costly thirty-year struggle for independence end in U.S. intervention. They faced an economy, society, and political system devastated by war, and a reconstruction conditioned by the United States. Central to the U.S.'s rebuilding policy, and part of America's growing empire and expanding overseas economy, was the Cuba Company.

On April 25, 1900, in Jersey City, New Jersey, the Cuba Company was incorporated in "order to develop Cuba" through the construction of a central railroad line traversing the island. [1] The incorporators included some of the wealthiest and most powerful men in the United States: Sir William Cornelius Van Home, former president and chairman of the Canadian Pacific Railroad; ex-governor of New York Levi P. Morton, president of Morton Trust Company; General Greenville

Dodge and E. H. Harriman, both of the Union Pacific Railroad; and the law firm Lord Day and Lord, of U.S. Secretary of State William R. Day. [2] The company issued 160 common shares of stock at $50,000 each for an initial working capital of $8,000,000. [3] Van Home offered the shares of the company only to investors with political and financial contacts and power. In addition, Van Home incorporated the company in New Jersey because of the state's lenient corporate tax policies and antitrust laws. [4] Within two years, the Cuba Company built a 350 mile central railroad extending from the end of the United Railways of Havana, at Santa Clara in central Cuba, to Santiago, the eastern port of Cuba. It instantly became the largest single foreign investment in Cuba and by the 1910s was the largest company in the country. The Cuba Company's leaders overcame enormous legal and financial obstacles through their business networks. In the process they established the framework for U.S. investment in Cuba that fundamentally influenced Cuba's economic, political, and social development.

The Cuba Company built an extensive railroad by circumventing formidable obstacles, including difficulty in the acquisition of right-of-ways, the lack of a general railway law the inability legally to carry passengers or cargo, and construction and engineering problems. The company also had to bypass the Foraker Amendment, which outlawed the granting of concessions to U.S. companies during the rule of the U.S. Military Government. Such problems did not defeat Van Home and his enterprise, in part, because this American-British-Canadian-Dutch-Cuban company transcended national borders and policy. It gathered its financial and political resources from each of these nations, and benefited greatly from international corporate networking.

This article focuses on the informal networks forged between businessmen, politicians, and officials from both the U.S. and Cuba through the development of the Cuba Company. It then examines the tremendous influence that the Cuba Company had on the development of the Cuban economy. The company established alliances and relationships on both the international and local levels, between Cuban, European, Canadian, and U.S. capital, between businessmen and politicians, and between public and private. [5] The business networks proved crucial to the success of the Cuba Company and, consequently, influenced the development of the new Cuban Republic.

Creating the Business Networks: General Leonard Wood, Sir William Cornelius Van Horne, Percival Farquhar, and the Cuba Company