It is not possible to give any figures of the average cost of production in Cuba. In my opinion it is undoubtedly higher than the average of Germany. Of the 2-1/4 cents net obtained by the Cuban manufacturers, the cane (which is generally purchased upon a sliding scale based upon the current value of sugar) costs them from 1 cent to 1-1/4 cents per pound of sugar according to yield at the various factories. This would leave them but little over 1 cent per pound, average margin, to cover manufacturing expenses, salaries, maintenance and repairs, office expenses, interest, insurance, and freight to seaboard, and while some factories, thoroughly equipped as regards machinery, skilfully conducted as to business management, favourably located regarding inland transportation, and not dependent upon borrowed capital, have shown fair interest returns upon capital invested, very many have been operated at a loss (aside from such losses as arose from the war), and the margin of profit, both past and prospective, is not such as to invite any large investment of new capital in sugar manufacturing. The future values of sugar in Cuba are dependent, not upon cost of production in the Island, but rather upon the cost in Germany; and upon the extent to which free sugars are to be admitted into the United States from the Sandwich Islands, Porto Rico, and the Philippines. With new capital and skill the average cost of production in Cuba can be reduced, and with either free sugars or a uniform rate of duty in the United States, assessed upon all sugars (a countervailing duty to offset foreign bounties always maintained), she can hold her own and recover her prestige as a sugar-producing country, but the margin of profit in sugar manufacturing is so small, and the world's capacity for production so great, that Cuba cannot recover her prosperity in the face of any advantage to be given to sugars from other countries entering the United States. At current prices in Cuba cane is worth to the planter the equivalent of $2 to $2.50 per net ton, out of which price he must pay for his planting and cultivation, cutting, and delivery to factory or nearest railroad point. As the cost of cane production consists almost entirely of labour, and wages in Cuba, for some years previous to the insurrection, ranged about the same in Spanish gold as similar work commanded in the United States, the profits in this branch of the industry have not been great, and have been dependent upon skill in management, quality of lands, and proximity to the factories.