1942: Puerto Rico

Distressing Economic Situation.

The war has hit Puerto Rico severely, causing serious shortages of gasoline and of food, which the island has always imported heavily, some 40 per cent of it from the United States. Because of the shipping situation food supplies are so low as to result in famine conditions. Food prices have soared, imported foods more than doubling in price, though the cooperation of the Federal Department of the Interior and the Agricultural Marketing Administration has had some success in keeping the price level down. Unemployment, too, is so serious that Governor Tugwell summoned a special session of the Legislature on Oct. 24 to consider these emergency problems. The report of a special unemployment committee indicated that 225,000 persons were out of work. A special report of the WPA Administrator for Puerto Rico found 12 per cent of the population jobless and 1,000,000 persons in need of government aid. The order in December for liquidation of the WPA will aggravate this situation as well as remove support from the school lunch program, which has been feeding over 143,000 undernourished children.

Attacks Upon the Governor.

Principal causes of the island's unhappy economic situation are the absence of war industries and the breakdown of transportation between Puerto Rico and the United States, which prevents the importation of construction materials, as well as food, and the exportation of the chief money crops. Blame for much of the distress has been laid upon the administration. Gov. Rexford Guy Tugwell has been made the target of bitter attack, culminating in demands for his removal and even for his impeachment. In February, Coalition Senators, representing the Union Republican, Socialist and Unification parties, asked for his removal because of delay in civil defense of the island. The Puerto Rican Farmers Association, the Chamber of Commerce and the Free Federation of Labor, as well as the Resident Commissioner in Washington, Bolívar Pagan, have also sought to oust the Governor. The spokesman of the opposition in the United States Senate has been Senator Vandenberg of Michigan, who has expressed serious doubt whether Governor Tugwell should be left in office in view of 'his swiftly expanding bureaucracy and his superlatively expensive administration, with all its implicit national socialization,' and proposed a definite two-year term for Governor. Opposition in the House of Representatives found expression in the action of its Agriculture Committee in making a $15,000,000 relief appropriation contingent upon the Governor's retirement.

Congressional Investigations.

In spite of Secretary Ickes' opposition, Senatorial investigation of conditions in Puerto Rico have been instituted by two Senate subcommittees, the Truman Committee and the Chavez Committee, which will inquire into the acute shipping and food problems. The report of the latter absolves Secretary Ickes and Governor Tugwell of responsibility for restricted food shipments and attributes the critical condition of the island to 'lack of coordination' and 'procrastination' in all activities relating to Puerto Rico. The War Shipping Administration is held directly responsible for the shipping situation.

The Chavez Committee report also criticized as impractical and 'only half-baked' the plan of the Office of Coordinator of Inter-American Affairs for a land-water route to Puerto Rico across the islands of the Caribbean, for which the lend-lease administration had supplied $500,000 to recondition a road between Port-au-Prince, Haiti, and San Pedro de Macoris in the Dominican Republic.

Two other committees, the Byrd Committee on Expenditures and the House Committee on Territories, will explore basic political and economic factors. These last lead inevitably into the underlying reasons for the sharp opposition of certain groups in the island to the Tugwell administration.

Division of Land Holdings.

One of the main grounds of attack is the Governor's espousal of the nationalization of certain of the island's resources and the division of all land holdings of over 500 acres. A recent law limits holdings to 500 acres through purchase of land in excess of that amount, which shall be leased in small plots to individual farmers. The first big estate to be broken up was the 10,000 acre holding of the Cambalache sugar mill at Arecibo, by a consent decree signed by the Insular Supreme Court in March. At the time at least nine other sugar properties faced similar action. A popular front party, which controls the insular Legislature, supports Governor Tugwell in this and other administration policies. The President of the Senate, Luis Muñoz Marín, has stood back of the Governor, as has José Ramírez Santibáñez, President of the Liberal party.

Proposed Election of Governor.

An amendment by Congress of the Second Organic Act would be needed to effect a proposal made by Governor Tugwell that Puerto Ricans be allowed to elect their own governor. A bill to this effect was introduced in the House of Representatives on July 6 but by the Resident Commissioner, Bolívar Pagan, who tried to turn it against the present Governor by a proviso that it should be made effective in December 1942. According to the Tugwell plan the portfolios of Education and Justice would eventually be turned over to the people, too.

Insular Legislation.

An emergency relief bill for $10,000,000, which had been passed by the special session of the insular Legislature, was signed by the Governor on Nov. 27. It is estimated that, through use of 70 per cent of the rum tax, the relief total may reach $18,000,000. The $15,000,000 asked of the U. S. Congress by President Roosevelt was intended to promote the production of food and feed products in Puerto Rico for home consumption and would have constituted a step towards making the island self-sustaining, but the rider attached by the House Agriculture Committee nullified this constructive attempt to get at one of the island's basic difficulties.

Other measures considered by the special session of the Legislature were increases in taxation, including the income tax, and the refunding of the island's bonded indebtedness in such a manner as to save Puerto Rico $750,000 annually. The current budget has been increased to over $20,000,000. Sugar exports for 1942 exceeded 1,000,000 tons, of which 900,000 were shipped by the close of the year.

1941: Puerto Rico

The appointment of Guy J. Swope as Director of Territories and Island Possessions of the Department of the Interior shortly after his inauguration as Governor left a vacancy in the governorship of Puerto Rico, which was filled in July by the nomination of Dr. Rexford G. Tugwell to the post. The close vote of confirmation in the Senate reflected political criticism of the social and economic views of this original New Dealer, who was responsible for the Rural Resettlement Administration (now the Farm Security Administration). Earlier in the year Dr. Tugwell conducted a survey in Puerto Rico, for Secretary Ickes, of means of enforcing the 500 acre-limit land law (see below). He had also been chosen chancellor of the University of Puerto Rico, a post he retains, though on leave of absence during his governorship, and, as such, has developed a six-point program for reform of the University.

The most important piece of legislation during the year was the Land Authority bill, signed by Governor Swope on April 12. The Land Authority, composed of seven members, is charged with carrying out the Congressional resolution of 1900, limiting corporate land holdings to 500 acres. Land is to be purchased, as corporate estates are liquidated, and redistributed to purchasers on a long-term basis in parcels of from ten to not over 100 acres. Expropriated owners may appeal the prices set for their lands but may not enjoin the expropriation procedure. An appropriation of $2,000,000 is made for the initial financing; the proceeds of a subsequent bond issue and other specified funds are set aside for future costs. The large sugar companies will be principally affected by this new attack on latifundia. In July, Russell and Company, owning 21,000 acres of sugar lands valued at $3,000,000 and growing crops valued at $2,000,000, sought an injunction against enforcement of the law.

The Land Authority Act asserts that 'land in Puerto Rico is to be considered as a source of life, dignity and economic freedom for the men and women who till it.' In this may be seen the guiding hand of Luis Muñoz Marin, President of the Senate and head of the Popular Democratic party (the Populares), which won control of the Insular legislature by a tiny margin, late in 1940, on the slogan 'bread, land and liberty.' He called the law a fundamental step towards Puerto Rico's rehabilitation. Another step is the diversification of crops, advocated by the retiring Governor as essential if the natives' dependence on sugar is to be reduced and the heavy importation of foodstuffs to be avoided. This last evidence of an unbalanced economy is particularly serious in wartime, when transportation of the island's food supply becomes precarious. Encouragement of the production of many tropical products, among them vanilla, spices and quinine, is found in the WPA fund of $41,000 for field experimentation and in the research of the Puerto Rican Agricultural Experiment Station. Other important legislation enacted by the Puerto Rican legislature this year includes a minimum wage law, with a wage board to fix wage scales; a drastic increase in income tax rates; and a law prohibiting nepotism. Governor Swope reported improvement in the island's productivity, with general economic conditions more favorable as sugar, coffee and tobacco prices have risen and as the disappearance of many foreign sources of supply has increased the demand for Puerto Rican needlework.

The key position of Puerto Rico in hemisphere defense was indicated by Governor Swope in his inaugural address. The increasing world crisis has caused a speeding up of the three-year defense program for the island, and rapid progress has been made towards the completion of the Isla Grande naval air base in San Juan harbor and of the eight army air bases and emergency fields. The new Puerto Rican bases push the defense front more than 500 miles east of Guantánamo, Cuba, which for over forty years has been the Navy's only base in the Caribbean. Puerto Rico has, thus, become a key link in the chain of Caribbean bases now guarding the Atlantic approach to the Panama Canal. The number of troops on the island has been vastly increased.

In a message to President Roosevelt on Dec. 8, Senator Muñoz Marin pledged Puerto Rico's support to the United States 'in defense against treacherous aggression.' The leader of the Populares, though long an independence advocate, asserted early in the year that the question of the island's political status is not an issue at present. The Coalition party of the Resident Commissioner, Bolívar Pagán, and of the minority leader, Senator Rafael Martínez Nadel, who died this year, expressed the intention to continue working for statehood. Ramón Medina Ramírez, acting president of the Nationalists, whose chief party plank is unconditional independence, was found guilty of conspiring to prevent operation of the Selective Service Act because of a proclamation calling on Puerto Ricans not to register. Eleven Nationalists failed to register in January, on the ground that they were 'citizens of the Republic of Puerto Rico' and the United States was a 'military usurper.'

1940: Puerto Rico

Political Matters.

Admiral William D. Leahy left Puerto Rico on Nov. 28 after an active governorship of little over a year, to become United States Ambassador to France. Dr. José Miguel Gallardo, a native Puerto Rican and Commissioner of Education since 1937, was appointed Acting-Governor to be succeeded early in 1941 by the island's auditor, Guy J. Swope. The local press expressed widespread regret over Admiral Leahy's departure and praised his administrative ability as well as his capacity for work, but leaders of the Coalitionists who, until the November elections, controlled the legislature, rejoiced at his appointment to Vichy. In these elections the new Popular Democratic Party of Luis Muñoz Marín won the majority of seats in the Senate, entitling it to elect its leader President of that body, and ran a close second in the Lower House. The new party is the party of the 'jíbaros' or small farmers. Its platform advocated independence for Puerto Rico but placed statehood as of 'equal dignity,' if that should be the people's choice in a special plebiscite. Its slogan is 'bread, land, liberty.' Another new tri-partite Unification Party broke away from the Coalitionists under the leadership of Miguel García Méndez, Speaker of the House, in July, and proclaimed statehood as its platform. This last political grouping united the labor and liberal groups and part of the Union Republicans. Bolívar Pagán, a Coalitionist, was elected Resident Commissioner in Washington.

Defense Preparations.

In spite of the appeal made by the Nationalist Party, independence advocate and not politically active, over 200,000 Puerto Ricans registered for military service under the Selective Service Act. A greatly expanded defense program for Puerto Rico, which is being transformed into a 'Gibraltar' of the Caribbean, removes all shadow of possibility of independence for the island. Naval and army air bases at San Juan and Punta Borinquen and the West Indian bases leased from Great Britain will constitute a strategic network in the Caribbean deemed highly essential to hemisphere defense. Admiral Leahy had recommended, furthermore, the acquisition of bases in the French and Dutch island possessions in the Caribbean.

After a three-week conference in Washington, in October, on island defense and the financing of the WPA in Puerto Rico, Admiral Leahy reported that an additional 10,000 workers would be added to the WPA rolls, bringing the total to 30,000, more than 40 per cent of whom would be employed in constructing a naval submarine and sea base and an army air base, to cost about $100,000,000. Early in the year the Governor had urged liberal Federal aid for the island's unemployed. The unemployment figure in December was reported by him to be about 150,000, of whom 40,000 were in the needlework trades.

Industrial Situation.

In the Governor's first message to the legislature on Feb. 13, distressing industrial conditions were attributed to the restricted sugar industry, which is hampered by the drastic quota system, and to the application of Continental wages and hours legislation to the very different local conditions existing on the island, adversely affecting Puerto Rico's second industry. An Industries Committee, instructed to investigate labor conditions preliminary to recommending a possible lower wages and hours scale than the present statutory minimum of 30 cents per hour, started proceedings on Sept. 23. Its report to Col. Philip B. Fleming, Federal Wages and Hours Administrator, recommended a minimum of 12½ cents an hour for home workers and 20 to 22½ cents for shop and factory workers. The committee maintained that a substantial wage increase, which was necessary if the malnutrition and poor health of the working population were to be alleviated, should be given, however, only if tariff aid, such as an adequate import duty, were imposed on products of all competing countries. Otherwise, shutdown and increased unemployment of needleworkers would result. When work is plentiful in this industry, the number of employed runs as high as 75,000 (including home and factory workers), and in its biggest year, 1938, goods processed in the island had an estimated value of $21,000,000.

Finance, Education, Legislation.

Although the Governor's predictions in February for the next year's departmental budget were pessimistic, estimating revenues not to exceed $14,000,000, the general improvement in the Insular government revenues resulted in collections for the year ending in June as high as $16,867,932, exceeding the treasury's original estimates by $4,567,932, and the closing treasury balance showed a gain of $1,344,628 over the previous year. Temporary suspension of the quota system during the latter part of 1939, permitting the sale of 170,000 tons of surplus sugar, increased the volume of sugar exports and was a factor in this improvement. Defense payrolls constituted another factor. The marketing quota for 1941 allotted to Puerto Rico is 797,982 short tons, raw value, out of a total established by the United States Department of Agriculture of 6,616,817 short tons.

Public school enrollment in the island totalled 286,089 in the year ending in June, which is the largest ever recorded. Expansion of the health program under the Social Security Act resulted in the lowest death rate of 17.8 per thousand.

The United States Supreme Court decision upheld the law limiting to 500 acres the amount of land permitted agricultural corporations, in the case of Rubert Hermanos, Inc., which owned 12,188 acres and is the property chiefly of Manuel Gonzáles, who is the island's largest landowner. Senator Luis Muñoz Marín led the fight for enforcement of this law, which is designed to end some of the worst features of absentee landlordism. It does not apply to individual ownership.

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.

1938: Puerto Rico

Political Disturbances.

Evidence of a terroristic element in the Nationalist party, in spite of the party's resolution of a year ago opposing acts of violence, was manifested in the unsuccessful attempt, on July 25, to assassinate Governor Blanton A. Winship. Three of the Governor's assailants, all Nationalists, have been given a life sentence; one of these had earlier been acquitted on a murder charge following the Ponce Palm Sunday massacre. Ten other Nationalists, also indicted for the Ponce killings, have been acquitted. Arthur Garfield Hays, counsel for the American Civil Liberties Union, challenged the Governor to take action against the Insular police responsible for twenty-one deaths in the Ponce demonstration. Plans to arouse American support for civil rights on the island are being prepared by a Committee for Fair Play for Puerto Rico, created by the Union. Eight Nationalists were convicted on Jan. 10 of an attempt on the life of Judge R. A. Cooper in June 1937. A ten-year prison sentence has been upheld by the Insular Supreme Court for a Puerto Rican who tried to assassinate Resident Commissioner Santiago Iglesias during his defense of the régime in the 1936 campaign.

Such incidents indicate the unsatisfactory status of this island possession of the United States. The heads of two of the three major political parties, the Union Republican and the Liberal, petitioned Congress, through the Senatorial sub-committee, headed by Senator Edward R. Burke of Nebraska, which was in Puerto Rico in January to look into the question of increasing the number of Supreme Court judges, for a liberalization of the Organic Act, in the direction of an elective governor without veto power, and for a plebiscite as to Puerto Rico's ultimate status. The Union Republican party aims at statehood; the Liberal party at independence. The death during the year of Senator Antonio R. Barcelo, who had led the Liberal party for twenty-two years, necessitated the choice of a successor. In November José Ramirez Santibañez was unanimously elected president of the party. At the same time Puerto Rico's only woman Senator, Sra. Maria Prez de Almiroty, was chosen vice-president.

Population Question.

A test case involving a fundamental approach to the island's serious problem of over-population came up in the indictment on Dec. 16 of six directors of the Child Health Association for violation of the Federal birth control law of 1873 which prohibited traffic in contraceptive devices. Although Puerto Rican law had been amended two years before to permit the dissemination of birth control information and materials, under medical direction, a later law directed the Insular Health Department to close birth control clinics. There have been recurring demands, also, stimulated chiefly by the Catholic Church, that the Child Health Association's activities be stopped.

Agriculture.

Far-reaching implications for Puerto Rican economy may result from a decision of the Insular Supreme Court, handed down Aug. 1, upholding the land law limiting to 500 acres the lands held by agricultural corporations. This provision was incorporated in the Organic Act of 1917 and was implemented in 1935, but it has been generally ignored or evaded. The decision applies immediately to the San Vicente Central, a company owning 12,188 acres, against which suit was brought last year. Since most of the sugar land in Puerto Rico is owned or controlled by a few large continental companies, this case, which is subject to appeal to the Federal courts, is of extraordinary significance. Government intervention on behalf of the farmers growing sugar cane was sustained in a decision rendered by the San Juan District Court at the close of 1937, denying an injunction to the Plata Sugar Company to restrain the enforcement of a law assuring the farmers, in their contracts with the sugar centrals, 65 per cent of the sugar produced from their cane. Domination of the island's sugar industry by some forty centrals has frequently worked injustice to the farmers. By an agreement signed Jan. 12, a 10-per cent wage increase was granted to field workers and a 5-per cent increase to factory workers in the sugar industry. Other provisions of the agreement include a minimum wage, an eight-hour day and no piecework.

Labor Situation.

The sugar workers, like most of Puerto Rican labor, belong to the A.F. of L., but the successful outcome to Labor of the longshoremen's strike, which, lasting from Jan. 3 to Feb. 10, isolated Puerto Rico for six weeks, has greatly increased the influence of the C.I.O. in the island. This orderly strike was effected through the cooperation of the rival North-American labor organizations. The peace proposal, accepted in February, granted a 25 per cent wage increase pending further negotiations, a permanent rate to be fixed by an arbitration board appointed by the Governor. As an aftermath of the strike, the Puerto Rican House of Representatives unanimously voted to appoint a committee to consider government ownership of the docks. Renewal of the strike in April, this time for complete unionization of all shipping workers not covered in the stevedores' union, was ended by an order of the arbitration board warning that another unauthorized strike would terminate efforts to reach a new wage agreement. Shipping conditions are so vital to Puerto Rico, which imports most of its food, and whose industrial life is dependent on the smooth flow of exports, that serious economic consequences resulted from these disturbed conditions. Unemployment was increased as, during the strike, almost all the workshops and industrial establishments, except the sugar mills, closed down. Due to inability of the farmers to export their produce, agricultural losses were very heavy. A decline in public revenue of over $1,000,000 has been attributed to the strike.

Industry.

Puerto Rican industry, particularly the needlework trade, has been affected by the Federal Wages and Hours Law, applicable to Puerto Rico. Production in this second industry of the island is reported to have dropped 65 per cent, partly in consequence of this measure, since it is maintained by employers that neither the needlework nor the tobacco industries can pay the minimum wage of twenty-five cents an hour. The Labor Commissioner, Prudencio Rivera Martinez, suggested the exemption of Puerto Rico from the Act. On the other hand, the Federacion Libre, affiliated with the A.F. of L., requested that it be enforced. One estimate puts at 107,865 the workers who would presumably be affected by the law, at least 70,000 of them needleworkers, most of whom are employed at home.

Finance.

A permanent credit agency has been proposed for Puerto Rico and the Virgin Islands in a plan, approved in principle by the Secretary of the Interior, for the creation of an agricultural and industrial credit corporation, modelled after the Farm Credit Administration. This body, to be known as the Insular Reconstruction Authority, with an initial capital of $50,000,000, to be contributed chiefly by the Federal Government but, in part, through local participation, would attempt a more basic reconstruction than it has been possible to effect through relief funds; some $125,000,000 having been spent in this way in the last five years with disappointing results. Congressional action on the proposal will be attempted in 1939.

The 'Little TVA' bill, passed at a special session of the Insular Legislature in September, was pocket-vetoed by Governor Winship, presumably because in its amended form it would have placed the Water Resources Authority under 'inadvisable' local political control. The original bill, which had the approval of the Interior Department, created a Puerto Rican Water Resources Authority, a $10,000,000 insular government corporation, which would take over and operate the island's water resources and undertakings such as the irrigation services, hydroelectric power, and distribution systems. In June, President Roosevelt signed a bill authorizing the establishment of a Puerto Rican Housing Authority, which, in September, petitioned for $15,000,000 for slum clearance and low-cost housing. The United States Housing Authority has already earmarked $3,000,000 for Puerto Rican housing.

Strong representations have been made to the United States State Department against the proposed tariff reductions on Cuban sugar and rum (see CUBA) as harmful to Puerto Rico's chief industry, which is already suffering from a reduced quota, resulting in production greatly under the island's capacity. The quotas for Puerto Rico provided under the 1937 Sugar Control Act are: for raw sugar, 819,344 short tons; for refined, 126,933 tons. Since Puerto Rico would like to expand its refining operations, the latter is particularly distasteful to the sugar interests. Benefit payments annually to Puerto Rico from the proceeds of the processing levy on raw sugar amount to about $9,000,000.