Governor Cramer's annual report for the fiscal year, made public Nov. 20, pointed out that the Virgin Islands are the only insular possession of the United States required to pay an export tax on sugar, which amounts to $6 a ton. He recommended that this 'discriminatory' tax should be lifted and that internal revenue taxes collected on liquor and other articles should be returned to the Insular treasury, a practice followed for years in the case of Puerto Rico and the Philippines. Such a move, which is incorporated in a bill before the United States Congress, would remove the necessity for appropriations by Congress of annual 'deficit' contributions for the operation of the municipal governments. The budget for 1940 faces a deficit of $57,000. Passage of the revenue bill is supported by all the factions of the Islands.
The Governor reported that the Islands' sugar production had dropped 40 per cent because of the drought now in its second year. This has been a serious setback to economic rehabilitation. Vigorous measures have been taken to keep alive the sugar and cattle industries, both basic and both severely hit by the drought. Steps have been taken to improve the harbor facilities of St. Thomas, to increase commercial shipping and to develop the tourist trade, which in the last year reached its peak to date.
The sugar quota for 1940, fixed at 8,972 short tons as compared with 9,013 in 1939, shows a slight reduction. In addition to the discrimination of the export tax on this commodity, the Islands' producers do not receive the benefit payments, ranging from $10 to $12 a ton, that United States Continental sugar growers enjoy under the Sugar Act. As a result, Governor Cramer reports that hundreds of owners and renters of small plots received gross incomes of only $174 in the last year, instead of $269 which they might have made if they had been freed from these discriminations.
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