The Sugar King of Havana (19 page)

Speculators are also by their very nature outsiders—observing dispassionately from the sidelines, waiting for the propitious moment to strike. Indeed, Ely described how Lobo viewed business as an almost intellectual exercise, like a game of chess. “If you get it right, Lobo used to tell me, you got the other man into checkmate,” Ely said. “That was where the fun was.”

Still, if Lobo could be ruthless, nobody doubted his honesty. In one example, Lobo brokered a deal in September 1945 that swapped twenty thousand tons of sugar for Argentine candle wax, used to make soap. Although executed by Lobo, the terms of the deal were arranged by the Commerce Ministry. A huge scandal erupted when the details were revealed, and opposition politician Eddy Chibás (personal motto: “Shame against money”) lambasted the government on his regular Sunday radio broadcast. But to Lobo, Chibás paid a backhanded compliment. “I generally believe the worst about
lobos
, the wolves, of this world,” Chibás said during a detailed analysis of the affair on his show. “But despite a detailed examination, I find no reason to censure Galbán Lobo.” Lobo may have played the game hard, but he played it fair.

Lobo’s success was all the more remarkable in that he alone was largely responsible for it. Unlike many other privately owned businesses in the Hispanic world, or indeed his hero Napoleon, Lobo had very few members of his family in senior positions. “Papa always told me to never employ a nearby relative in a position with a lot of responsibility,” Lobo once commented. By the late 1930s Heriberto was semiretired and Jacobo, Lobo’s younger brother, always played a minor role at
la casa
. Instead, Lobo relied on a tiny core team amid the four hundred or so staff that worked at the office. Most important was Carlotta Steegers, a prim nineteen-year-old assistant whom Lobo hired after an interview in 1939 at which her aunt had been present as chaperone. Carlotta had flaming red hair, a temper to match, and was agoraphobic—which is why the right-hand woman of the richest man in Cuba stayed behind in Havana after the revolution. Carlotta was unflinchingly loyal and one of the few people who could call Lobo an insolent idiot to his face. He enjoyed such raillery and trusted Carlotta so implicitly that she had power of attorney over all his affairs. “Carlotta could have left me standing in the street in just my underpants if she wanted to,” he once observed.

Lobo’s New York assistant, Margarita González, was almost as powerful. She handled all his American affairs and teasingly (and tellingly) referred to him in their correspondence as Caesar, while María Esperanza was dubbed Marie Antoinette. Enrique León, a shrewd man, meanwhile provided Lobo with political advice and legal counsel (“a lawyer should be like a priest,” Lobo told León). They first met in the 1940s when León was acting as a young lawyer for the other side during a sugar deal. Admiring León’s sharp mind, Lobo hired him as soon as the negotiations closed—although the manner in which he financed León’s move to Havana from his home in Oriente is telling. León, short of funds, asked Lobo for a loan while he set himself up in Havana. Lobo agreed willingly—but then checked himself. “What if you die and can’t pay back the office?” Lobo asked. León said he would take out a life insurance policy payable to Galbán Lobo in the case of such an eventuality. Lobo agreed; León never regretted the decision. Other than these three figures, the trading operation at Galbán Lobo was essentially a one-man operation.

It made for a punishing schedule, prefiguring the frantic life of a modern city worker. Each day, Lobo read and replied to some six hundred cables. He rarely stopped for an elaborate lunch, preferring milk and crackers or a simple meal delivered to his desk. “On the New York Sugar Exchange,” he once explained mildly, “trading would not stop if I took a two-hour siesta. And even when New York is closed, sugar is traded almost every hour somewhere in the world. So I try to be available.” For Lobo, markets were continuous not only through time but also through space. “When a Cuban mill owner needs money to pay bills, I’ll buy his next year’s crop today. If a U.S. soft drink manufacturer is afraid prices will go up, I’ll sell him sugar now, for delivery at any time.” Yet he still found time to exercise regularly, unusual for those years. He fenced, boxed, and even sunbathed. He also organized his growing Napoleon collection, read copiously, expanded the spread of Galbán Lobo’s businesses, and took his daughters on excursions around Havana and to his mills. The sole exception to Lobo’s activity was María Esperanza, as they had become increasingly estranged.

“She was the most beautiful woman in Cuba when I married her,” Lobo once told his son-in-law. But they’d hardly known each other after a mere six-month courtship, and there had been problems and incompatibilities from the start. While Lobo worked and traveled abroad on business—to the United States, Europe, South America, and around the Caribbean—María Esperanza attended to her boudoir at home, increasingly sullen and bored. “She was so pretty, but so selfish,” remembered Fichu Menocal, one of the few members of Cuba’s old social register to remain in Havana after the revolution. Some compared her cruelly to the Queen in
Snow White
, who asks the mirror: “Who is the fairest in the land?” Yet María Esperanza’s mirror-gazing was less vanity than a narcissism that masked a wounded innocence. Lobo left magazines like
Time
and
Life
for María Esperanza to read in the hope that it might broaden her horizons. She preferred light novels about the tsarina’s court or the life of the Chinese emperor’s concubines. Leonor remembered how María Esperanza lost her temper if Leonor or her sister sat down while wearing linen, because it rumpled their clothes. “In those years, amid a world of caring grandparents, there were certain moments of pain,” María Luisa similarly recalled. María Esperanza’s loneliness grew only more acute as her husband began to conduct ever more elaborate love affairs, and she weathered the humiliation in the role of long-suffering wife in which she increasingly cast herself. “Please explain to Madame Reine that it is very difficult for me to call her now,” Lobo had beseeched his New York assistant in one Christmas cable sent from Havana. Madame Reine was Lobo’s first big love affair; they had met in Paris before the war. “Tell her that I think of her continually . . . that I love her more than ever,” he added.

 

 

WHEN A MISTRESS MOVES IN, it has been said, a new job opportunity is always created. For Lobo, however, that job was his work. For all his gallivanting, he remained first and foremost a financier. He continued to take calculated trading risks, most of which succeeded, although some went spectacularly wrong.

One of Lobo’s worst moments happened in September 1939. In Europe, Hitler was in power in Germany, Mussolini in Italy, and General Francisco Franco had assumed the presidency in Spain after the three-year civil war. In Cuba, Batista still ruled from behind the throne. Although a strong man, Batista was far from being the dictator that he would later become, and his “control” of the country was in reality a delicate balancing act; Cuba was disrupted regularly by sporadic shootings and strikes that continued after the fall of Machado. Batista clamped down on the unrest, but compared to the butchery of Rafael Trujillo, who was engaged in a blood-soaked reign in the Dominican Republic, he looked almost populist. To the U.S. press, Batista frequently denied that he was either a socialist or a fascist—although photographs that showed him standing in full dress uniform during military parades under the hot Caribbean sun were discouraging.

Lobo was in Havana on September 3, when Britain and France declared war on Germany. He didn’t think the war would go as smoothly for the Nazis as it did in Poland, which they had overrun in just five weeks. He believed the sugar price, trading at 3.2 cents a pound, had to rise—just as it had during and immediately after World War I, when Cuba had cavorted through the Dance of the Millions. Onward to riches! Lobo started to buy.

Instead, the sugar price slipped. By the early spring of 1940, it had fallen to around 2.8 cents, a loss of 40 points. Lobo stood his ground. On April 9, the same day that Germany invaded Denmark and Norway, he cabled Charles Taussig, the president of the American Molasses Company, who knew both Lobo and Cuba well. (Taussig had been a member of Roosevelt’s Brains Trust of advisers and had coauthored a study of the island for the president seven years earlier.) Taussig wanted Lobo’s views on the sugar market.

“Re yr wire of this morning,” Lobo cabled back. “Present prices are low in peace time. They are absurdly low in case of war. If people would only reflect for five minutes they would be buying . . . like mad.”

For a while, Lobo’s prediction seemed right. The sugar price edged up. On May 14, it reached a year’s high of almost 3 cents. Then it started to drop as a major German offensive made rapid progress across France. Lobo watched aghast as Nazi infantry and tanks passed through “Belgium, Holland and France like a knife through butter.” It soon became clear there would be no major disruption to Europe’s beet sugar crop that year, and therefore no spike in the sugar price either. By the end of May, sugar had fallen to 2.7 cents. When the Germans entered Paris on June 14, it slipped again. By mid-August, it had dropped to 2.6 cents.

Lobo’s position was huge, over 300,000 tons, and he had lost a fortune. If he had bought all that sugar at the prevailing price when war broke out the September before, he faced losses of $4 million, nearly $60 million in today’s money.
La casa
would be bankrupted. Lobo was in the New York office when he telephoned his father in Havana to tell him the news. Heriberto advised him to put the family’s belongings under his sister Helena’s name, as at least then there would be something left “for the family to eat.”

When the conversation ended, Lobo, then forty-one years old, put down the phone and stood at the window of his office, twenty-three stories above Wall Street. It was late at night. “Death is nothing,” said Napoleon. “But to live defeated and inglorious is to die daily.” Lobo wondered if he should just throw himself out onto the empty streets below. Most of the stories of millionaires bankrupted by the 1929 stock market crash who jumped to their deaths are apocryphal, but some failed speculators did take their lives. Later that year, Jesse Livermore, one of Wall Street’s most famous stock market speculators, would blow his brains out in the cloakroom at the Sherry-Netherland, the same hotel where Lobo sometimes stayed when in New York.

Lobo, though, turned away from the window and left the office. Out of the building, he turned right and walked four blocks to the Wall Street subway on Broadway, planning to catch the train to his hotel on Madison Avenue and Fifty-eighth Street. Instead he paused outside Trinity Church, a century-old neo-Gothic church built of softly colored sandstone that still stands at the head of Wall Street next to the subway station.

Lobo went into the church, walked down the diamond-patterned aisle, and sat among the empty pews. He stared for a while at the high arched ceilings, the stained-glass windows, and began to pray. He forwent the usual Our Fathers and Hail Marys for a direct conversation with God.

“Lord, why are you punishing me like this?” he recalled asking. “I have never done anyone any harm. I’ve been a good son, a good father, a good brother” (though not, as Lobo omitted, a good husband). “I’ve not knowingly hurt anyone, I’ve been a hard and honest worker, and while you may have reasons to punish me, why the rest of the family too?” In his diaries, Lobo remembered that he continued like this for a while, talking with God.

Then he stood up, walked out of the church, descended into the bowels of the subway, and caught the train uptown. When he arrived at his hotel, a string of messages waited for him in reception. The cables were from Jean Lion, a Parisian sugar broker Lobo knew via his girlfriend Madame Reine. (Lion, incidentally, had recently married the singer and dancer Josephine Baker.) The French government, Lobo read, needed prompt delivery of 300,000 tons of refined white sugar, the same size as his position.

Victory belongs to the persevering. Lobo sprang into action. He started to swap the raw Cuban sugar that he held for the refined white sugar that the French government sought. “Thanks to good fortune and the grace of God, everything ended well. But it was a very dangerous moment for the house,” Lobo later remembered in his memoirs. “It was also the only time in my life when I felt truly lost.”

Lobo wrote that last sentence in his seventies, as he reviewed his life from exile in Madrid. It seems odd that someone who had suffered a homemade bomb exploding in his face, been put against the wall to be shot, and seen the bulk of his fortune confiscated after the revolution, should call that almost hidden moment in a dark office on Wall Street the
only
time when he felt all was lost. As Lobo recalled, it was only then, after making a market miscalculation that was his fault and nobody else’s, that he felt a true sense of desolation.