The Sugar King of Havana: The Rise and Fall of Julio Lobo, Cuba's Last Tycoon

Citation

Pisani, M.J. (2011), "The Sugar King of Havana: The Rise and Fall of Julio Lobo, Cuba's Last Tycoon", American Journal of Business, Vol. 26 No. 1, pp. 80-82. https://doi.org/10.1108/ajb.2011.26.1.80.1

“Cuba” evokes many powerful responses both in the USA and around the world. In the USA, Cuban émigrés yearn for a “return” to normalcy – to a time before the dastardly Castro Revolution (1959 forward) when life or at least the “memory” of life on the island 90 miles from the shores of Florida was good. For many others around the world, Cuba is seen as a beacon of hope where American hegemony was rebuffed and socialist revolutions encouraged. For most of those left behind on the island, the new revolutionary regime initially improved their lot in life with the gains later squandered.

Regardless of one's contemporary passions about the fate of the Castro brothers and the Cuban Revolution they launched, the twentieth century pre‐revolutionary times of unabashed capitalism, hooliganism, mobsters, debauchery, movie stars, vacation retreats, American intervention, and sugar remains a fascinating epoch in Cuban history. In The Sugar King of Havana, the Latin American Editor of the Financial Times, John Paul Rathbone, shares a personal biography of the last sugar mogul to leave Cuba: Julio Lobo (1898‐1983).

Julio Lobo was more than just the richest man in pre‐revolutionary Cuba; he was also part of Rathbone's extended network of family and friends. Rathbone's mother grew up in the same social circles as Lobo's daughters, but they all left for good shortly after the installation of the Castro regime. Thus, John Paul Rathbone grew up an outsider to Cuba in England (his father is British) but an insider to the knowledge of privileged life in the halcyon days before the Cuban exodus. So, while Rathbone's story is a wonderfully written biography of Julio Lobo intertwined with the historic times, it is also a personal journey of discovering his Cuban roots.

Julio Lobo was the Bill Gates of Cuba in his heyday. At his apogee in the 1950s, Lobo was estimated to be worth $5 billion in today's dollars. Like Gates, Lobo was a self‐made man. From his native Venezuela, Lobo's family moved to Cuba when he was two‐years old because of a sea change in the Venezuelan Government where his father, Heriberto Lobo (himself a self‐made man who learned accounting, French and English on his own), as CEO of the Venezuelan National Bank (Banco de Venezuela) had refused to open the bank's coffers to the country's dictator and was summarily exiled. The Heriberto Lobo family arrived in Cuba in 1900 when Heriberto landed a job as a payroll clerk for US troops through the North American Trust Company on the island. (American troops remained in Cuba as a vestige of the Spanish‐American War.) Quickly, Heriberto Lobo ascended to run the Cuban operations of the trust and eventually moved into the more lucrative financing and trading of Cuban sugar with a local partner. In all, the Senior Lobo bequeathed to his son financial literacy in the banking and sugar sectors […] an intellectual inheritance that would pay handsomely for the Junior Lobo later in life.

This early detail provides a glimpse into Julio Lobo's contextual upbringing. Moved from his natal land because of political strife, his father re‐emerged in Cuba utilizing his previous financial experiences, language abilities, and hard work to move beyond the hoi polloi of post‐independence Cuba and into the local economic and social elite. Julio Lobo grew of age with a privileged Cuban and American university education (first at Columbia and then Louisiana State University where he studied at the Sugar Engineering Institute, graduating in 1919) and a determination to move beyond the nouveau riche stature of his father. In the USA, Julio learned independence, English, and found that he truly loved the world of sugar.

Back in Cuba in the 1920s, Julio Lobo learned from the ground up the operations of the sugar trading house in his father's business (Galbán Lobo) and by 1921 ran the day‐to‐day trade in sugar. Through tireless effort, bold actions, risk taking (and speculation), panache, frugality, information asymmetries (provided by informants with direct communication lines to Cuba strategically placed in the global financial capitals), and ruthless price dealing, Julio Lobo became a dominant player in not only Cuban sugar but also the global sugar market. Julio Lobo was an ardent free‐trade advocate, despising export and import controls, as well a fierce opponent of business opportunities seized through corruption. By the 1950s, Julio Lobo controlled half of Cuba's sugar sales, half of Puerto Rico's sugar sales and 60 percent of sugar sales from the Philippines.

Julio Lobo led a full life; he married in 1932 and children followed as did extra‐marital affairs and divorce. Lobo collected Napoleonic memorabilia, boasting the largest collection outside of France. Lobo survived an assassin's bullet that left him with a limp and shrapnel in his spine. Lobo entertained movie stars and befriended Joan Fontaine, purportedly filling a swimming pool with perfume for her to swim in. Lobo traveled the world, but loved Cuba. On his most prized plantation, Tinguaro of 18,000 acres, he built schools, a clinic, a library, offered scholarships to the most promising students, and was known as “Julio” to all; he was definitely the benevolent patrón of the sugar mill. In all, Lobo's holding were vast, including 342,000 acres of sugar and mills, banks (such as the Banco Financiero), merchant and trading houses, homes, and so on. Nonetheless, Julio Lobo's business life was cut short by the Cuban Revolution.

While most of Cuba's wealthiest left the island shortly after Fidel Castro took power in early 1959, Lobo stayed and believed he could find economic space to navigate within the new Cuba. For a while, the Castro regime left Lobo alone while it focused on transforming the economy through the usurpation of the corrupt capitalist class. In the early morning of October 12, 1961, Che Guevara head of the central bank after the revolution met with Julio Lobo. Guevara reportedly said to Lobo, we could “not [find] a stain or a blemish” in your financial records […] for that reason “we have left you to last.” Last in this respect was the confiscation of Lobo's holdings, yet Guevara tried to convince Lobo to stay and help guide the new economy and build the economy of the revolution. Two days later Lobo left Cuba, never to return. Julio Lobo managed to re‐create and lose a fortune in New York city after he left Cuba and spent his last decade of life in obscurity in Spain.

So where does this book fit within the contemporary business landscape? From the functional perspective, The Sugar King of Havana may be used in a finance course focused on commodity trading. Historically, it is good economic history embedded within Cuban history, post‐independence (1898) to the ascendency of Fidel Castro. Though not as dramatic a “rags to riches” story as Andrew Carnegie in nineteenth century America, the story of Julio Lobo is one of a twentieth‐century entrepreneurial icon operating and succeeding within the hegemonic shadow of the USA. Definitely gristle for entrepreneurs or would be entrepreneurs.

And as my teenage daughter likes to remind me of the present‐day magical power of the name “Bill Gates”, Julio Lobo also swayed the imagination of a nation where the idiom “ser rico como un Julio Lobo” (to be as rich as a Julio Lobo) is still heard on the streets of Havana. In this book, John Paul Rathbone brings to life Julio Lobo; it is worth the read.