1939: Puerto Rico

Change in Administration.

A shift in administration occurred this year when, on June 6, President Roosevelt appointed Admiral William D. Leahy, retiring Chief of Naval Operations, to succeed General Blanton Winship as Governor. During the course of his five years in office the latter had aroused almost universal political opposition. He had been openly critical of a number of Roosevelt measures which had incidental effects on the island's economy, namely, the Hull trade agreements, which had involved tariff concessions to Cuba at the sacrifice of Puerto Rican products; the Wages-Hours law which, without discretionary power to the Insular administration, seriously affected the needlework and other industries of the island; and the sugar quota, which needed adjustment to Puerto Rico's productive capacity. He also asserted that Puerto Rico received less than one-third of its fair share of Federal grants, only $57 per capita as compared with an average of $222 in continental United States, $141.50 in Hawaii, and $282 in the Virgin Islands. Unquestionably, friction between Governor Winship and Secretary of the Interior Ickes impeded satisfactory administration of the island's affairs. Governor Winship had had serious difficulty, moreover, with the Nationalists, the extremist independence party, who had tried to assassinate him. As a result of the trials which ended in January, six of a group of Nationalists charged with the act received life sentences.

The new Governor, in taking office on Sept. 11, disavowed any political affiliations and expressed a desire to be surrounded by non-partisan advisers. He mentioned as problems requiring Federal action a change in the sugar quota, a modification of the local application of the Wages and Hours Act, and a correction of the shipping situation and of unfavorable trade agreements with foreign nations, covering many of the same difficulties which had been focal points of General Winship's criticism of Washington. In discussing the island's needs with the Budget Director, he reported the WPA as estimating that 300,000 of the islanders were in need of emergency relief and 500,000 living under substandard conditions.

Insular Politics.

The internal political situation is acute, due in part to the impending Insular elections in 1940. The Nationalist Party is not active in the organized political life of Puerto Rico, although, by its revolutionary tactics, it wages a spectacular campaign for complete independence. On Feb. 22, it re-elected as its president Pedro Albízu Campos, who is serving a term in the Atlanta penitentiary for sedition. In November this party urged a boycott of the next elections. The Insular Legislature is controlled by a majority coalition, twice elected, of the Union Republican Party, of which Senator Rafael Martínez Nadal is president, and the Socialists, who are split over the question of leadership. Labor Commissioner Prudencio Rivera Martínez, one of the founders of the Party, has led the opposition to the late Santiago Iglesias, Resident Commissioner in Washington and head of the Party until his death this year. Iglesias is now succeeded, in both capacities, by his son-in-law, Senator Bolivar Pagán. In August Martínez was expelled from the Socialist Party. Partisan feeling has been bitter as rumors have accumulated of attempts of Martínez, Nadal and José Ramírez Santibañez, president of the Liberal Party, to form a three-party alliance and, thereby, upset the present majority coalition. The Liberal Party, in April, withdrew from the Legislature over alleged abuses in connection with an investigation of the Insular Department of Justice.

Question of Future Political Status.

These various parties have taken differing stands on the question of the island's future political status. The Nationalists and the Liberals both want complete independence. The Republican Party advocates statehood. The Socialists have never committed themselves. All Puerto Ricans agree that clearly defined status for the island is desirable. On June 4, a memorandum was submitted to the President and Congress by a joint committee of Puerto Rican legislators, urging that ultimately Puerto Rico be admitted to full statehood. This was merely a reiteration of a formal petition of 1934 to permit the people of Puerto Rico to draft a state constitution, submit it to the voters in a plebiscite, and then convey it to the United States Government for approval. Pending Congressional action, the following immediate reforms were urged: that (1) beginning in 1940, the Governor be elected for a four-year term, not nominated; (2) instead of one Resident Commissioner in the House of Representatives with a voice but no vote, there be two Resident Commissioners in Washington, one in each house of Congress, and both authorized to vote on matters concerning Puerto Rico; (3) the Governor no longer have absolute veto power, but that Congress annul Insular legislation; (4) Justices of the Supreme Court be named by the Governor, subject to Senate approval, instead of being life appointees of the President.

Importance of Military Position.

Any changes in political status in the direction of a relaxation of Federal control seem unlikely in the face of the European situation and an increasing realization of the strategic importance of the island. Two moves in the last year show a determination to make Puerto Rico a major link in the Atlantic defensive chain: the authorization by Congress of $9,000,000 for the construction of a naval air and submarine base on Isla Grande in San Juan Bay, contracts for which were awarded Nov. 1; and the establishment of a new army department of the Caribbean, to be called the Department of Puerto Rico, with Brig. Gen. E. L. Daley as commanding officer. This decision sets up a military administration for the Caribbean area similar to that now in effect in Hawaii, the Philippines and Panama. With the largest naval base in the Atlantic, a new $27,000,000 air and military base, which is already ready for emergencies, and an eventual military garrison of 10,000, Puerto Rico will guard the Atlantic approach to the Panama Canal and, also, be the center of operations for the defense of the Gulf of Mexico and the Gulf States. Assurance has been given the island's political leaders that interference with the civil status of Puerto Rico was not intended but the Nationalist Party has registered its protest against the establishment of military bases.

Economic Situation.

Continued economic distress is indicated by the large numbers of unemployed, in March given as 750,000, or 40 per cent of the island's population. (At the close of the year Governor Leahy reported about 300,000 jobless.) This is, in part, attributable to the sugar quota restrictions, which have limited the Puerto Rican output to about 850,000 tons, whereas at the last grinding season cane was standing to produce 1,200,000 tons. Last year's crop was the smallest, by law, in five years, and in May, the sugar centrals ended the shortest grinding season in a quarter of a century, some of the mills operating only 60 to 90 days as compared with a normal period of 150 to 180 days. This, in itself, affected 125,000 laborers. Moreover, a wider use of labor-saving machinery has displaced hundreds of sugar workers. Governor Winship urged the planting of food crops to carry them through the dead season on lands to be set aside by the sugar companies and other landowners, and subsequently some 25,000 acres were promised for this purpose. When war broke out in Europe in September the sugar quotas were temporarily discontinued and much new acreage was planted, with the result that the 1941 crop, unrestricted, would probably exceed 1,250,000 tons. Late in December, however, President Roosevelt restored the restrictions, and the quotas fixed for 1940 indicate a slight reduction for Puerto Rico from 806,642 to 803,026 short tons. The new governor has suggested that either the island's sugar quota must be raised to 1,300,000 or more relief funds would be necessary.

Industry.

The Federal Wages-Hours Act, which made a 30-cents-an-hour minimum effective in October, has had a disorganizing effect on Puerto Rican economy, especially on the needlework industry, which in 1938 accounted for one-sixth of Puerto Rico's exports to the mainland. Designed for the highly industrialized economy of the United States, it is questionable whether such an arbitrary and mandatory type of legislation is adapted to a semi-tropical, agricultural area. The Federal Department of Labor, in February, commissioned Isidor Lubin to make a study of this situation. The application of the Fair Labor Standards Act to the sugar industry is a matter of litigation in the Puerto Rican courts, the Eastern Sugar Associates in an equity suit brought Feb. 9 seeking exemption on the ground that theirs is an agricultural industry.

Trade and Finance.

Imports from continental United States in the fiscal year 1938 totaled $75,684,719. This represented a falling off of about $11,000,000 during 1938, with a still further decline indicated for 1939. Exports from Puerto Rico to the mainland totaled $84,782,650. The close of the fiscal year (June 30) indicated a drop in insular revenues of about $1,200,000 from previous years, due chiefly to a shrinkage in the income tax. In April the Assembly passed a budget of $15,200,000 for the next fiscal year, a figure of $1,000,000 above the current operating budget.