"The idea of allowing the people of Puerto Rico to draft and approve their own constitution in a manner similar to the way the States do when they are first admitted, would be a tremendous step forward in principle, although in practice the amount of self-government would not be very different, as it is now substantial."
GOVERNOR LUIS MUNOZ MARIN
Report Of The Governor Of Puerto Rico
Before The Committee On Public Lands Of The House Of Representatives
July 12, 1949
Mr. Chairman and members of the committee, I want first to take this opportunity, upon my first visit to Washington since the election, to thank this committee for having instituted this new form of government for Puerto Rico, which is symbolized by the right of the people to elect their own chief executive after 453 years in which they had not been empowered to do so.
I would like to refer, before I end my remarks today, to this new form of government instituted in Puerto Rico by act of this Congress through this committee. If it is agreeable to the committee, I would like to express in general lines the problems that we face in Puerto Rico. After that, if the members would like to ask questions, I would be very happy to answer them to the best of my ability.
I think the best way of envisaging the general basic problem of Puerto Rico and the best way of expressing it is as the Chancellor of our University did some time ago in the following manner: If you can imagine the population of the whole world moving to the continental United States, then the population of the United States would be the same per square mile as the population of Puerto Rico is today. There would be about 640 inhabitants per square mile. If you further imagined that most industries are wiped out from the continental United States and that all petroleum and coal and iron and other minerals are eliminated, then you have the problem that the people of Puerto Rico are facing.
We have a population of 640 per square mile, based largely on an agricultural economy, which we are now trying to convert into an industrial economy. You can see that the task that we have is extremely difficult. I want to report to this committee, however, that the people of Puerto Rico are facing the task with courage, with initiative, and with real hope. In this hope they have been very greatly encouraged by the action of this Congress in granting this measure of self-government.
What do we have to do to solve the problem of so many people trying to live on an agricultural economy? Mainly, we do two things. One, we try to increase production. Two, we try to distribute what is produced as fairly as possible among the mass of the people. The main factor is the increase in production. Obviously, if you don't produce enough, it does not matter how fairly you distribute, there will not be enough. We have to make production increase in Puerto Rico at a much faster rate than it is increasing now, although it is increasing now at a faster rate than it was a number of years ago. We have to make it increase at about three speeds or four speeds, let us say.
One, of course, faster than population grows; two, faster still so as to take up the lag of unemployment; three, faster still so as to continue to raise the standard of living of the population as a whole; four, faster still so that we will not be permanently dependent on aid from the Congress.
We hope always to have such aid as the states have, but we would like it not to be a matter of life or death to the people of Puerto Rico. Of course, there are production goals, health, education, and so forth to be considered. With health go the services of pure water to the people. With education goes everything from elementary education to our university. All those things are good in themselves and part of the productive activity of Puerto Rico. The people know they have a hard job, but they are tackling it with great courage and great hope.
In the last few years we have abandoned what we might call the "operation lament" and are now in the midst of "operation bootstrap". We are trying to lift ourselves by our own bootstraps with the help that Congress has always given Puerto Rico. I want to say that the people there deserve all the help they can get because they are courageously helping themselves. They are not just lying back and waiting for somebody to lend them a hand. They are doing the utmost that they can to solve their problems. It is for that reason that they deserve all the help they can get from Congress.
Perhaps you would be interested to know one of the main things that we are doing to help the industrialization of the Island. We have a twelve-year tax-exemption program which I want to explain in some detail because there has been some misunderstanding about it up north. We exempt from taxation industries that are defined in the law as new industries, which number about 40 or 42. They are exempted from all taxation for twelve years. An industry that obtained its exemption two years ago will have twelve years. An industry that obtains it now would only
have ten years. An industry that [will obtain] it next year would only have nine years. That is because we want the exemptions to end at the same time for all industries so as not to establish competitive differences at the time the twelve-year period terminates.
Then there are three years more in which the taxes go on at the rate of 25 percent, 50 percent, and up to 100 percent. So it is a total of fifteen years, but the total tax exemption is twelve years, all ending in 1959. The law is two years old.
There has been some talk about inducing industries or shops or factories to close in the states and open in Puerto Rico on the basis of this exemption. I want to say that our executive council, which is the organism entrusted by the law to grant or withhold this tax exemption, will not grant it to any industry where it knows that it is going to close a factory in any state or territory of the Union in order to open it in Puerto Rico. We want expansion capital in Puerto Rico and not merely a transfer of industry from one part of the American economy to another part of the American economy.
There are billions of dollars of new capital produced by the American economy, of which we are a part, every year, and what we need is just a small part of that new capital to be invested in Puerto Rico so as to solve these difficult problems that I have been pointing out.
If we are to have even approximate full employment in normal times by 1960, let us say, we must have an investment of $40 or $50 million a year average during that period. Some of the investment comes from the Island itself. The Island itself produces some capital accumulation, but most of it cannot come from the Island. I am glad to have the opportunity of stating once more before the committee that it is no part of our policy to induce industries or shops to close in any state to open in Puerto Rico. There has been some misunderstanding about that; however, it has never happened. The attitude is embodied in a resolution by our executive council that it will not grant any tax exemption to an industry if that is going to be the case.
Education and health are a part not only of the right of any democratic community but also of any community that is battling to increase its own production. I would like to say to the committee that this year more than 50 percent of the budget approved by our Legislature is devoted to health and education. Even with a large appropriation for education, we still have about 40 or 42 percent of the children and youth of school age without access to schools. That is another thing that gives you a measure of the seriousness of the problem we face in Puerto Rico. Even spending such a large part of the budget on education, we have that remaining need.
Health has been considerably improved. The death rate from the beginning of the century has gone down from about 30 per thousand to 12 per thousand. In the last 10 years, since the 1940 census, it has gone down from 18 per thousand to 12 per thousand. That is getting near the general average for the states as a whole, which is about 10 point something per thousand.
Allow me to consider again the new form of government. In passing the law allowing the people of Puerto Rico to elect their own Governor for the first time, it is my view that Congress is practically giving shape to a new kind of State.
You find no dependency anywhere in the world that elects its own executive and legislative government. The step taken in Puerto Rico is tradition-shattering. It is a completely new departure which does a very high honor to the United States Congress and to the United States President. It does create a new kind of State. It is not an old kind of State, of course, but neither is it a dependency because it governs itself locally. It is not an old kind of State because it has no voting representation in Congress. Of course, it has no voting representation in Congress because it pays no federal taxes.
We have there the respected principle of no taxation without representation; but so far as local government is concerned, for all practical purposes it is like a new kind of State. It has something missing which I do not anticipate will be very difficult to correct. I want to submit it for the consideration of you, gentlemen, now.
What is missing to make Puerto Rico a new kind of State is that the people of Puerto Rico should have the right to make their own constitution. This is a matter of great importance as a principle. In practice, the constitution would probably be very similar, certainly along fundamental lines, to the one now ruling by Act of Congress.
In practice, the people of Puerto Rico know that the Congress of the United States would not impose a constitution upon the people of Puerto Rico against their objections.
The idea of allowing the people of Puerto Rico to draft and approve their own constitution in a manner similar to the way the States do when they are first admitted, would be a tremendous step forward in principle, although in practice the amount of self-government would not be very different, as it is now substantial.
The principle, however, would be very important not only for the people of Puerto Rico, but for the understanding of what the United States Congress and the Federal Government are doing in Puerto Rico throughout the world at large. I am not bringing that up as a proposal for the present session to act upon, as I know it is too late this year; but I would like to leave it with you, gentlemen, for your consideration for action during a future session.
There are many other points we could touch upon; but I think if you, gentlemen, wish to
ask questions, we might cover more ground.