On October 10, 1868, Carlos Manuel de Céspedes launched an uprising known as the "Grito de Yara," starting the Ten Years’ War against Spanish rule. The fighting centered heavily in eastern Cuba, a region tied to sugar plantations and mills. The conflict disrupted production and set the stage for later political and economic changes in the sugar economy.
In 1878, the Pact of Zanjón ended the Ten Years’ War without securing full Cuban independence. The end of large-scale fighting allowed sugar production to recover and modernize, especially in western and central Cuba where many mills had avoided destruction. This shift mattered because it helped rebuild sugar as the island’s leading export industry.
In 1886, slavery was abolished in Cuba, changing how sugar plantations and mills staffed cane cutting and processing. Sugar employers increasingly relied on wage labor and various forms of contracted work. These labor changes became a key part of how the sugar economy expanded into the early 1900s.
On February 24, 1895, uprisings began a new war for independence from Spain. The renewed conflict deepened economic instability and damaged the countryside in many areas, including cane-growing zones. It also made Cuba’s future trade relationships—especially with the United States—more central to political debates.
On December 10, 1898, the United States and Spain signed the Treaty of Paris, ending the Spanish–American War. Spain gave up its claim to Cuba, and U.S. influence in Cuban affairs expanded rapidly. This change in sovereignty and power helped open the way for U.S. capital and trade policy to shape Cuba’s sugar sector.
After 1898, Cuba was administered under a U.S. military government until May 1902. U.S. officials reorganized public administration and set conditions for political transition. For the sugar economy, this period created a more predictable legal and financial environment for foreign trade and investment.
In 1901, the Platt Amendment set conditions on Cuban sovereignty, including a U.S. right to intervene in Cuban affairs. Cuba accepted these conditions as part of the process of ending the occupation and forming the new republic. The rules mattered for sugar because they signaled strong U.S. political leverage that investors often viewed as lowering risk.
On May 20, 1902, the Republic of Cuba was inaugurated, ending the first U.S. occupation. Even as Cuba gained formal independence, U.S. policy tools—especially the Platt framework—continued to shape political stability and foreign economic activity. This was a key starting point for large-scale U.S. investment in sugar lands and mills.
On May 22, 1903, Cuba and the United States signed the Treaty of Relations, embedding the Platt Amendment terms into a bilateral treaty. This formalized the U.S. role in Cuban governance and the right to intervene. The treaty’s predictability helped support an investment climate that favored large-scale sugar expansion.
From September 1906 to February 1909, the United States occupied Cuba again after political conflict threatened the Cuban government’s stability. This intervention reinforced the idea that U.S. power could directly shape Cuban politics. For sugar, the occupation helped protect property and production conditions that mattered to foreign investors and exporters.
During World War I, European beet-sugar production was disrupted, and global demand shifted toward cane sugar suppliers such as Cuba. Higher prices encouraged expansion into new cane lands and the building or modernization of large industrial mills (often called centrales). This period laid the groundwork for the boom-and-bust cycle that followed.
In 1916, Milton Hershey began acquiring Cuban sugar lands and mills to secure sugar supplies for chocolate production. The flagship mill (Central Hershey) was completed in 1918, illustrating how U.S. companies invested not only in trade but also in production and transport systems. These vertically integrated investments tied Cuban sugar more tightly to U.S. industrial needs and finance.
From 1917 to 1922, U.S. Marines were stationed in Cuba during a period of instability that threatened sugar production and export flows. The deployment reflected how closely political order and sugar revenues were linked. It also showed how U.S. security actions could be used to protect an economy heavily dependent on sugar exports.
In May 1920, raw sugar prices surged to a historic peak (often cited around 22.5 cents per pound), encouraging speculation and heavy borrowing against expected profits. Many Cuban businesses and banks took risky positions as land and mill values rose rapidly. The boom greatly increased U.S. financial exposure to Cuba’s sugar sector.
By late 1920, sugar prices fell sharply, and many borrowers could not repay loans made during the boom. The crisis led to bank failures and pushed sugar properties into the hands of stronger financial institutions, including U.S.-linked lenders. The result was a more concentrated, foreign-influenced sugar industry and deep social strain in Cuba.
By the mid-1920s, Cuba produced very large crops—over 5 million tons in the 1924–1925 season by widely cited estimates—adding to a global sugar surplus. Oversupply pushed prices down, often below production costs for many mills. The situation showed that even after the 1920 crash, Cuba remained locked into a high-volume, low-price sugar model.
On June 17, 1930, the United States enacted the Smoot–Hawley Tariff Act, raising import duties on many goods. In the early Great Depression, protectionist policy and retaliatory tariffs reduced trade volumes and worsened economic pressure internationally. For a sugar-dependent exporter like Cuba, a less open U.S. trade environment amplified vulnerability and marked a turning point away from the earlier boom era.
Cuban Sugar Boom and U.S. Investment (1868–1930)