During the year 1941 the Virgin Islands Co. developed a rural-electrification project designated as the Rural Electric Division. This project provides electric energy to the rural areas of St. Croix between the towns of Christiansted and Frederiksted, including the United States Army airbase in St. Croix.

The company cultivates approximately 3,000 acres of sugarcane, maintains approximately 1,000 acres of pasturage and grinds in its mills, in addition to its own cane, that of about 525 independent growers. It has built and maintains homes for laborers in its employ, also furnishing them with subsistence plots; rents out tractors and other equipment; operates a rock crusher used in local road construction; supervises operation of an abattoir; provides community houses used as nurseries during the day and recreation centers in the evening; and operates a mail-, cargo-, and passenger-carrying schooner plying between St. Thomas and St. Croix.

The Virgin Islands Co. consolidated balance sheet, June 30, 1945

The Virgin Islands Co. consolidated balance sheet, June 30, 1945—Continued

If the committee will permit me, I should like to give a general outline of our islands and their condition, as a preliminary to justifying our 1947 estimates.

Of course, you know that our island group consisting of the islands of St. Thomas, St. Croix, and St. John were purchased by the United States from Denmark in 1917 for strategic purposes. I think the

price which the United States paid for these islands has been amply justified. The extensive military preparations which were made there during the war indicated the importance of the islands, as the easternmost outpost of the United States, in the plan of hemispheric defense. St. Thomas, the capital, is 28 square miles, St. Croix is 84 square miles, and St. John 20 square miles, or a total acreage of 132 square miles. St. Thomas' interests are purely commercial. It has one of the finest harbors in the West Indies. St. Croix is, of course, agricultural with sugarcane as the only crop. The little island of St. John is undeveloped. The population of the islands is now about 26,000, with about 13,000 in St. Thomas, 12,400 in St. Croix, and about 600 in St. John. The population is over 90 percent Negro. The 1940 census shows a literacy of 87 percent. Education is compulsory.

The islands import everything from soup to nuts, and export only sugar, rum, and cattle. Total imports in 1943-44 were $4,844,000. Total exports in 1943-44 were $6,062,008. However, 10 years ago, when rum exports were nil, our total exports were only $586,000 and our imports were $1,375,000. St. Thomas, in prewar years, depended for its income on its harbor and excellent bunkering facilities for ships. With war conditions the tourist cruise-ship business was disrupted and the bunkering business declined sharply. Fortunately, the rum industry expanded by leaps and bounds, due to the shortage of liquor in the United States. But this business has now declined with the resumption of distillation of beverage spirits in the United States. During the calendar year 1945, St. Thomas exported 979,000 proof gallons of rum.

St. Croix, with 13,500 acres of arable land, 6,300 acres of cultivated land, and 21,000 acres of pasture land, produces only about 4,000 tons of sugar annually. Weather, marginal low-yield land, and sugar prices, make this industry a perilous one for St. Croix's economy. During 1945, St. Croix exported 4,040 tons of raw sugar and 72,256.32 proof gallons of rum.

The assessed value of all real property in St. Croix is a little over $4,000,000, in St. Thomas close to $5,000,000, and in St. John $171,000. The estimated agricultural income of St. Croix in 1945 was $600,000 and in St. Thomas $106,000. The estimated income from rum in St. Croix was $273,000 and in St. Thomas $4,800,000: Total revenues raised in St. Croix in the fiscal year 1945 were $515,000 and in St. Thomas $1,200,000.

The total road mileage of St. Croix is 140 with 108 of dirt or gravel and 32 miles of hard-surfaced roads. In St. Thomas there are 50 miles of roads of which 18 miles are hard surfaced and 32 miles dirt roads. St. Thomas has 500 telephones, 1,000 radio receivers, and 470 automobiles and trucks. We have 3 rum distilleries in St. Thomas. Our large dock, owned by a Danish corporation, is 2,234 feet long and can accommodate vessels drawing up to 32 feet, with modern bunkering facilities. In St. Croix there are 250 telephones, 2 sugar mills, 2 rum distilleries, a modern abattoir, 600 radio receivers, and 335 automobiles and trucks. The minimum wage is 20 cents per hour for unskilled labor as well as field labor. For industries in interstate commerce, the minimum wage is 25 cents per hour. Skilled workers range from 40 cents per hour upwards. Our total bank deposits are close to $4,000,000. Electric current in St. Thomas is 220 volts direct current; 110 volts direct current in the two towns of St. Croix, and

110 volts alternating current in the rural districts of St. Croix. Rates are high, the lowest being 6 cents per kilowatt hour for power and 10 cents for light in St. Thomas. St. Croix's government-owned abattoir sells Federal inspected meat to St. Thomas and Puerto Rico. Over 1,000 head of cattle, sheep, and hogs were slaughtered in 1945 for export.

GOVERNMENT

The Governor of the Virgin Islands is the governing authority of the insular possession as well as of the two municipalities. Unlike the States, our so-called municipalities are not independent government entities. They come directly under the control of the Governor, subject to full law-making powers of two municipal councils.

The cost of the general government of the islands is paid by direct Federal appropriation. That is the estimate of $208,000 now before the committee. We also have an agricultural station for which there is an appropriation of $39,800 before you. The municipality of St. Thomas and St. John has not needed a deficit appropriation since 1942 because of increased local revenues due to the stimulation of business by defense activities and the income tax on rum. The municipality of St. Croix still cannot finance itself and there is an estimate for an appropriation of $142,400 to defray its deficit.

The government of the islands has all the problems of general Government operations; in miniature it is true, but nonetheless pressing, vexing, and difficult of solution. The Governor's staff is paid from Federal funds while the assistant department heads are mostly municipal employees. We have health departments, police departments, prison and penitentiary, police courts, hospitals, a leper asylum, public works, welfare departments, public libraries, education departments and last, but by no means least, legislative activities.

LEGISLATURES

There are two legislatures sitting through the year, a seven-member body in St. Thomas and St. John and a nine-member body in St. Croix. These two legislatures have full and complete legislative authority for their respective islands subject to the Governor's veto. They may override such veto and the President becomes the final arbiter. They are elected every second year by popular vote. In 1944 there were 1,500 registered voters in St. Thomas and 2,200 in St. Croix. These two legislatures sit once a year as a general assembly for the insular possessions.

HEALTH AND EDUCATION

The health of the islands is good despite shockingly offensive open sewers and dilapidated hospitals, medical institutions, and disgraceful local slaughterhouses. Probably 80 percent of our homes are without modern toilet facilities. These will be replaced by modern facilities from the appropritions made and to be made under the $10,000,000-dollar appropriation of Public Law 510. We have a 90bed old hosiptal in St. Thomas and two in St. Croix, with total bed capacity of 135. We maintain 50 lepers and 170 indigent aged. Our school population is 4,000 and we maintain 26 public schools up to senior high-school level. Our 150 public school teachers are mostly

natives, a growing number of whom have attended college in the United States.

LOCAL REVENUE LAW

Our local revenues include a real property tax at the rate of 1.25 percent of assesed which is generally equivalent to full valuation; the Federal income tax, which is applicable there by special act of Congress and whose proceeds we retain; a 4-cents-per-gallon gasoline tax; automobile license fees; customs revenues, including a flat 6percent duty on all foreign imports; inheritance taxes which, interestingly enough, are still collected under a Danish law of 1876 with rates of 1 percent on inheritance falling from husband to wife, parent to child and vice versa, 4 percent from brothers to sisters, and 7 percent to distant relatives and strangers; license fees, corporation fees, trade taxes equivalent to sales taxes in St. Thomas, excise taxes in St. Croix and miscellaneous revenue. Income taxes are the major revenues representing in this fiscal year 60 percent of St. Thomas' revenues, and 30 percent of St. Croix revenues. Real property taxes are next with 12 percent of St. Croix' and 7 percent of St. Thomas revenues. They are all locally enacted laws except the income taxes.

LOCAL EXPENDITURES

Our local expenditures, estimated this year to be $900,000 in St. Thomas and $431,000 in St. Croix are for the purpose of operating our municipal institutions. These expenditures are enacted into annual budgets by our two municipal councils. We estimate that our funds this year are spent, in percentages, for the following major purposes:

SALARIES AND EXPENSES, GOVERNMENT OF THE VIRGIN ISLANDS

Mr. JOHNSON of Oklahoma. The committee will next consider the item for salaries and expenses. The estimate for 1947 is $208,000, a decrease of $373 under the appropriations for the fiscal year 1946. The statement appearing on page 36 of the justifications showing the increases and decreases will be included in the record at this point.

(The statement referred to follows:)