P VkUAL REPO*2
GOVERNOR OF THE
TO THE SECRETARY OF
FOR THE FISCAL YEAR ENDED JUNE 30
UNITED STATES GOVERNMENT PRINTING OFFICE
WASHINGTON : 1938
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UNITED STATES DEPARTMENT OF THE INTERIOR
Harold L. Ickes, Secretary
TERRITORY OF THE VIRGIN ISLANDS
Lawrence W. Cramer, Governor
For sale by the
Superintendent of Documents, Washington, D. C.
Price 10 cents
Economic situation . . . . . . . . . 1
The sugar business ................. .1
The cattle business . . . . . . . . . 3
The shipping business . . . . . . . . 3
Tourist trade .... ................ . 4
Congressional legislation . . . . . . . ... 5
The Sugar Act of 1937 ...... ........... 5
St. Thomas Harbor improvement. .. . . . ... 5
Other legislation . . . .. . .. .. . . 5
Local legislation . .. . . . .. . .. .. . 6
Fiscal . . . . . . . . .. . . 9
Municipality of St. Thomas and St. John . . . . 9
Municipality of St. Croix . . . . . . .. 9
Cost of the municipal governments . . . . . 9
Reduction of Federal deficit contributions . . . .. 9
The St. Thomas Harbor Board. . . . . .. 10
The Federal appropriation. . . . . . . .. 10
Work Relief Program accomplishments . . . . .. 11
Bluebeard Castle Hotel . . . . . . . .. 11
R oads . . . . . . . . . . . . 11
Sanitary improvements . . . . . .... 11
Street surfacing and drainage . . . . . .... 12
W omen's projects . . . . . . . . . 12
Protestant Cay residence, St. Croix . . . . .. 12
Homesteads . .. . . . . . . . . 12
Low-cost housing.................... 13
Federal buildings... .. .............. .. 14
The Virgin Islands cooperative . . . . . . .. 15
Agricultural station and vocational school . . . .. 16
Municipal government activities . . . . . .. 16
Education . . . . . . . . . . 16
Health and sanitation. . . . . . . . 17
W welfare . . . . . . . . . . . 17
Public works ... . . . . . .. ... 18
H arbor . ... . . . . . . . 18
Public libraries . . . . . . . . . . 18
Police and prison. ..... . . . . . . . 18
Administration of United States immigration laws . .. 18
Civilian Conservation Corps . . . . . . . 19
Conclusion ... . . . . . . . . . 20
ANNUAL REPORT OF
THE GOVERNOR OF THE VIRGIN ISLANDS
Lawrence W. Cramer, Governor
CHARLOTTE, AMALIE, ST. THOMAS
August 30, 1938
The Honorable the SECRETARY OF THE INTERIOR,
Washington, D. C.
Sin: Pursuant to section 20 of the Organic Act of the Virgin Is-
lands of the United States, approved June 22, 1936, I have the honor
to submit the following annual report of the transactions of the
government of the Virgin Islands for the fiscal year ended June 30,
Definite improvements in the economic rehabilitation of the Virgin
Islands were recorded in previous annual reports. This improve-
ment continued to be apparent in both municipalities during the
present fiscal year until a prolonged and severe drought in the island
of St. Croix seriously affected the situation there.
The sugar business and the cattle business, which are the two basic
industries of that island, upon the former of which much of the
rehabilitation program is based, were struck staggering blows by the
drought at a time when sugar and cattle prices were at unprofitable
The sugar business.-The effects of the drought can be assessed
by comparing the relative returns for the year 1937 with those of the
past year of 298 homesteaders in the island of St. Croix who are
being assisted by the government to acquire and develop small farms.
In 1937 these small farmers produced 16,117 tons of cane valued at
$53,081 as compared with 6,121 tons valued at only $15,274 in 1938.
Their gross return in 1938 was only 29 percent of their 1937 income.
Sugar production in the island declined from 8,211 tons to 4,362
tons, while at the same time the sugar price fell more than 20 per-
cent-a loss of more than 47 percent in tonnage and approximately
60 percent in value. Hundreds of acres of drought-stunted cane were
uncut and plowed under. Plowing and planting costs that should
have been spread over 3 or 4 years of sugarcane production were
2 REPORT OF THE GOVERNOR OF THE VIRGIN ISLANDS
totally lost. Sugar factories with heavy investments in sugarcane
grown on so-called administration land were even more seriously
affected than were small farmers whose chief investment is their own
and their family's labor.
It is evident that thorough consideration must be given to the
possibility of reorganizing the sugar business so that it may continue
to furnish employment in the island of St. Croix. Many efforts
have been made during the Danish regime and subsequently to di-
versify agriculture and to find other profitable crops to replace sugar-
cane. These efforts have not been successful, and no agricultural
development which furnishes employment to so great a number of
agricultural laborers as does the sugar business has yet been found.
It would thus appear that different methods of organization other
than those now prevailing will need to be attempted if this important
industry is to be carried on with any degree of success in the Virgin
The homestead plan inaugurated in 1932 by the government points
the way to a possible solution of the problem. Experience indi-
cates that the agricultural laborers in St. Croix are competent to
take over small farms and to operate them if they are furnished ade-
quate supervision and cultivation aids. In fact, it is evident that the
average small farm of. approximately 7 acres is smaller than necessary
to meet the needs and potentialities of the small farmers. Small
ownership and large-scale mechanical operation under government
supervision have been notably successful during the years of adequate
rainfall and have left the small farmer better off during and after
a drought than he would have been as an agricultural laborer. It is
therefore recommended that steps be taken through the assistance
of such agencies as the Rural Resettlement Administration and the
Farm Security Administration to develop as widely as possible the
possibilities of leasing or selling small farms to be operated under
conditions similar to those established on the homestead areas.
The owners of a sugar factory in the island of St. Croix are willing
to cooperate in establishing such a plan. There is the possibility
of working out the subdivision of approximately 6,000 acres of land
in this way. Unless this or another equally effective plan is carried
out, it is probable that this sugar company will discontinue its op-
erations and thus add 800 people to the unemployment rolls.
If small farms are developed, they should be of sufficient size to
permit balanced agriculture by the small farmers. Their average size
should not be less than 30 acres, which should include sugarcane
land as well as cattle land, so that small farmers may produce a cash
crop, vegetables for their own use and for local sale, poultry, and
a few head of cattle. With mechanical cultivation aids, financial
assistance, and with farm management supplied by the government
REPORT OF THE GOVERNOR OF THE VIRGIN ISLANDS
through the agricultural station or agencies of the Department of
Agriculture, it is believed that small farmers can be established on
a sound basis and that their standard of living can be greatly im-
proved over their present standard as agricultural laborers.
The sugar grower in the Virgin Islands does not receive benefit
payments under the Sugar Act of 1937. Indeed, he not only does not
receive these benefit payments, but by act of Congress is compelled
to pay a special export tax of $6 per ton on all sugar produced in the
Virgin Islands and exported therefrom. This tax, which represents
10 percent or more of the gross return of the sugar grower at present
sugar prices, is paid by the grower of sugarcane under the practice
of local sugar factories which pay for sugarcane according to the
New York sugar price after deducting the tax. If other sugar pro-
ducing areas which have the benefit of irrigation and ample rainfall
require benefit payments, and drought and catastrophy payments,
sugar growers in the Virgin Islands who sell their product in the
same market require them also. Certainly, they cannot do without
them and, at the same time, pay an export tax of $6 per ton.
It is imperative that legislation be enacted to return to the Virgin
Islands sugar processing taxes levied in the United States and thus
to permit the repeal of this export tax. The Wages and Hours Act
applies to the sugar industry of the Virgin Islands. There is, there-
fore, no basis for continuing the export tax if the purpose of its
enactment was to equalize sugar production costs in the Virgin
Islands with those in continental United States.
The cattle business.-The cattle business, which is of second im-
portance in each of the municipalities of the Virgin Islands, requires
reorganization in order to meet new conditions imposed in the only
available market. Due to the vigorous prosecution of a tick eradi-
cation program in Puerto Rico conducted with Federal relief funds,
that important market for Virgin Islands' cattle will no longer be
available unless a similar program is carried on in the Virgin Islands,
or arrangements are made to ship meat to market rather than live
animals. Work bulls may no longer be shipped to Puerto Rico and
animals for slaughter must, therefore, be produced in the Virgin
Islands if the cattle business is to survive as an important industry.
A careful survey by an expert has been made during the past year
as a result of which numerous recommendations for the improvement
of this industry were made.
The shipping business.-The shipping industry in the port of St.
Thomas continued its improvement with resulting benefits to the
community at large. During the fiscal year 814 ships with a total
tonnage of 3,239,975 called at the port of St. Thomas, as compared
with 777 ships with a tonnage of 3,084,173 in 1937, and 647 ships
with a tonnage of 3,017,682 in 1936. There was inaugurated during
4 REPORT OF THE GOVERNOR OF THE VIRGIN ISLANDS
the year, for a trial period, an arrangement for the transhipment of
bauxite at the port of St. Thomas from small vessels of shallow
draught which transport it from British Guiana to the dock at St.
Thomas to ships of greater draught which transport it from St.
Thomas to Canada. This business increases the activity of the port
of St. Thomas, furnishes increased employment, and signalizes the
advantages of the port of St. Thomas over competing ports in the
The Army Engineer Corps has continued its engineering surveys
of the harbor with a view to beginning authorized harbor improve-
ment work in the new fiscal year. The prosecution of this project
is of first importance to St. Thomas whose entire economic life
depends on shipping.
An interdepartmental committee appointed by the Secretary of
the Interior to study and report on the relative advantages of the
ports of St. Thomas and of San Juan, P. R., as a site for a graving
dock made a report on November 7, 1937, and found that if a grav-
ing dock were to be constructed in the Caribbean area it should be
constructed in San Juan Harbor rather than in St. Thomas Harbor.
If a graving dock is established in San Juan, it will undoubtedly
have the effect of diverting shipping from the harbor of St. Thomas.
Since shipping is the only commercial activity of this island, any
decrease in the number of ships calling here will immediately reflect
itself in an increase in the number -of workmen in the community
who are without employment. Therefore, it will be a very serious
blow to St. Thomas to have a graving dock established in San Juan.
Tourist trade.-The development of the tourist trade continues
to make steady progress. During the year 13 tourist ships called at
the port of St. Thomas with a total of 6,487 tourists aboard. It is
interesting to note that two of these ships were not scheduled to call
at St. Thomas, but did so because rough seas prevented their calling
in San Juan Harbor.
Bluebeard Castle Hotel was taken over by a private operator under
a mutually satisfactory lease on December 1, 1937. It continues to
attract a growing number of visitors to the Virgin Islands and has
contributed substantially to the development of St. Thomas as a
winter resident center.
Extensive improvements in the sanitary facilities of the town of
Charlotte Amalie, the surfacing of streets, the reconstruction and
improvement of street drains, and the reconstruction and improve-
ment of highways during the year have greatly improved the oppor-
tunities for the development of St. Thomas as a tourist center.
Considerable demand exists for residential construction both to
meet local requirements and to increase the possibilities of winter
REPORT OF THE GOVERNOR OF THE VIRGIN ISLANDS
resident development. Plans are now under consideration to establish
Federal savings and loan associations through which the financial
assistance of the Federal Home Loan Bank Board can be secured
for this purpose.
Vigorous measures are necessary to keep the sugar industry and
the cattle industry alive, to improve the facilities of the harbor of
St. Thomas, to increase commercial shipping, and to develop the
tourist trade which, in their sum, represent all of the present im-
portant economic potentialities of the Virgin Islands.
The Sugar Act of 1937.-Under this act the sugar quota for the
Virgin Islands is fixed at 0.24 of 1 percent of the domestic allotment.
This figure represents an increase from approximately 5,400 tons
under the Jones-Costigan Act to 9,200 tons in the Virgin Islands'
quota and permits a return to a normal sugar crop for the Virgin
Islands based on recent years when production was not greatly
reduced by droughts. Under the law no refining operations may
be carried on in the Virgin Islands.
The Virgin Islands are excluded from the benefit payments of
title 3 of this act, and hold the unenviable position of being the only
sugar-producing area under the American flag which does not receive
these benefits. Sugar processing taxes are collected on Virgin Islands'
sugar when shipped to the United States and processed there, the
receipts from which are deposited in the United States Treasury.
Such relief as was anticipated from the increase of the Virgin
Islands sugar quota under this law has been lost by reason of the
severe and prolonged drought which has reduced sugar production
by 50 percent, but for which no benefit payments were made.
St. Thomas Harbor improvement.-Funds made available, under
the War Department civil appropriation bill, approved June 11,
1938, for river and harbor improvements, will make possible the
inauguration of work on the improvement of the harbor of St.
Thomas which was authorized in the Rivers and Harbors Act of
1935. Further engineering surveys have been carried on and a
contract for the construction of a breakwater from the eastern end
of the harbor to Rupert's Rock will be let in the new fiscal year.
Other legislation.-Several bills, including an amendment to the
organic act of the Virgin Islands; a bill to impose uniform excise
taxes in the Virgin Islands; a bill to amend the Liquor Taxing Act,
and a bill to authorize the appropriation to the Virgin Islands of
internal revenue taxes collected in the United States on Virgin Is-
lands products, were introduced in the Seventy-fifth Congress, but
failed of enactment.
6 REPORT OF THE GOVERNOR OF THE VIRGIN ISLANDS
The most important ordinances enacted by the two municipal
councils of the Virgin Islands were those providing for registration
and elections under that provision of the organic act which established
universal suffrage in the Virgin Islands beginning with January 1,
1938. Comprehensive laws were enacted in both municipalities to
implement this requirement of the organic act which marked an
important advance in the political organization of the Virgin Islands.
Registration under these laws is now taking place.
The municipality of St. Croix enacted legislation based on similar
laws in effect in Puerto Rico for the control and eradication of cattle
ticks. Plans are in preparation for carrying on a tick eradication
program in both of the municipalities of the Virgin Islands in the
new fiscal year with the assistance of W. P. A. funds and under the
technical supervision of the Bureau of Animal Industry of the
Department of Agriculture.
In addition to much routine legislation there was enacted by the
Municipal Council of St. Croix an ordinance authorizing the execu-
tion of a contract granting a franchise to a private power company
to operate an electric light and power service in the municipality. A
slight reduction in rates will be put into effect at the end of 1 year
and provision is made for a further reduction of rates as the consump-
tion of electricity increases during the life of the contract.
Approximately 3,000 acres of land at the east end of the island of
St. Croix were purchased under an ordinance which authorized the
afforestation and development of the area by the Civilian Conservation
The Municipal Council of St. Thomas and St. John enacted a num-
ber of important ordinances in addition to the electoral.ordinance
referred to above. Several ordinances were enacted which established
clearly defined rights-of-way for public roads and authorized a pro-
cedure for securing additional rights-of-way for roads whose con-
struction might be undertaken by Federal or municipal agencies. This
action has permitted the widening of many roads which formerly were
too narrow for safety. Property owners have cooperated in an excel-
lent manner in agreeing to donate land adjacent to roads so that this
work has been accomplished without cost to the government for the
acquisition of land.
Enabling legislation was enacted by the Municipal Council of St.
Thomas and St. John to provide for the operation of certain recrea-
tional facilities such as the municipal beach house and tennis courts,
and to provide for a method of operating them. Unfortunately no
municipal funds have so far been made available to conduct these
useful recreation centers. They have been operated and improved
REPORT OF THE GOVERNOR OF THE VIRGIN ISLANDS
through the use of funds collected as fees. There is great need for
development of additional recreational facilities in the community,
and it is hoped that the recognition of this need by the legislature
will later result in the substantial extension of such facilities.
By ordinance of November 8, 1937, there was created an official
lottery in the municipalities of St. Thomas and St. John. The ordi-
nance creating it was based on a similar Puerto Rican law. The
ordinance provides that the proceeds from the lottery shall be made
available for hospitalization, sanitation, education, and poor
relief in the municipality. There have been three drawings to
June 30, 1938. The first drawing resulted in a loss of $64, the second
drawing in a surplus of $2,850, and the third drawing in a loss of
$104. These figures do not include administrative expenses which
have so far been paid out of a loan fund authorized by the ordinance.
It is too early to determine whether or not the lottery will be successful
in bringing in very much needed funds to the municipality for the
purposes for which it was created.
Authority was granted by resolution of the Municipal Council of
St. Thomas and St. John to carry on reforestation work on estates
Calabashboom and Julia De Koning in the island of St. John. These
estates, comprising an area of approximately 150 acres, have been in
the possession of the municipality for many years, but have not been
developed. The Civilian Conservation Corps personnel is now under-
taking reforestation activities with a view to establishing a stand of
hardwood trees on it. It is reported that logwood, sandalwood, ebony,
lignum vitae, and other valuable woods were once found in abundance
on the island of St. John. If seeds or seedlings of these varieties can
be found, they will be propagated and planted.
Several important tax measures were enacted by the Municipal
Council of St. Thomas and St. John during the year. A gasoline tax
imposing a tax at the rate of 4 cents a gallon was enacted on May 16,
1938. Collections from this tax and from an automobile license tax,
which was amended to impose license fees in accordance with the
weight of automobile vehicles to increase the revenue therefrom, are
to be segregated in a special road fund for use in maintaining the road
system of the municipality. As a result of this action by the munici-
pality of St. Thomas and St. John, there is now a uniform gasoline
tax of 4 cents a gallon in effect throughout the Virgin Islands. Auto-
mobile license taxes in both municipalities are now at practically the
same level. The enactment of this legislation is of special importance
because it makes available funds to maintain the increasing mileage of
roads in the municipality which have been improved through the
expenditure of Federal relief funds.
A trade and lamp tax which has been in effect in the municipality
since its enactment in 1855 was repealed and a new trade tax levying
8 REPORT OF THE GOVERNOR OF THE VIRGIN ISLANDS
a tax of 1 percent of the business turnover of merchants engaged in
certain classes of business, and one-half of percent on the annual
turnover of merchants engaged in certain other classes of business
was enacted by ordinance of May 16, 1938. Under a companion ordi-
nance the suspension of ships' dues on vessels calling at the port of St.
Thomas for coal and oil bunkering was continued during the life of
the trade tax.
Appropriations were made by the Municipal Council of St. Thomas
and St. John of funds necessary for the construction of a hospital
kitchen at the Municipal Hospital at Charlotte Amalie and for the
construction of a country school in the Mafolie district. Both of these
structures were urgently required for the proper functioning of mu-
nicipal medical and school services. Through the generosity of an
estate owner an excellent site was donated for the construction of the
school, which is now under way. Funds were also appropriated to
pay a portion of the cost of the reconstruction of the Municipal Build-
ing in Charlotte Amalie, which was purchased last year to house the
legislature, the public library, and other municipal offices.
In accordance with the provisions of section 7 of the Organic Act,
the Governor convened the first meeting of the newly created Legis-
lative Assembly of the Virgin Islands on November 22, 1937. Num-
erous important items of legislation, which were included in the
message of the Governor calling the session of the legislative assem-
bly, were not considered by this body because of technical objections,
raised when the assembly met, against the introduction by the Gov-
ernor of bills for the consideration of that body. This practice was
followed throughout the Danish regime, and has been continued so
far as meetings of the municipal councils of the Virgin Islands are
concerned by specific provision of the organic act. Although the
power to introduce measures in the legislative assembly is not granted
in specific words in the Organic Act, a reasonable interpretation of
its wording would justify the practice. The members of the legis-
lative assembly, however, denied the Governor the opportunity to
introduce measures, with the result that only one measure was held
to be properly before that body. Because of the possibility of estab-
lishing a precedent which was clearly not intended to be established
by the Congress of the United States when it enacted the Organic
Act, the Governor withdrew from the legislative assembly when the
ruling was finally made that measures could not be introduced by
him. .The meeting of the legislative assembly was therefore without
result, and many important measures, including a uniform electoral
law for the Virgin Islands, were dismissed without consideration.
An amendment to the Organic Act specifically granting power to
the Governor to introduce legislation in the legislative assembly was
introduced in the Seventy-fifth Congress and was favorably reported
REPORT OF THE GOVERNOR OF THE VIRGIN ISLANDS
in both the Senate and the House. Unfortunately, the bill failed
of enactment in the closing days of the session. As a consequence
there will continue to exist two opposite interpretations of the
Organic Act on this point which may temporarily hinder the
consideration of legislation needed for the Virgin Islands as a whole.
The revenues of the municipal governments again show substantial
increases over previous years. In the case of St. Croix, however, col-
lections were greatly less than estimated at the beginning of the fiscal
year due to a considerable loss of sugar-export taxes and other taxes
falling on the sugar business. It is feared that substantial decreases
in municipal revenues for the municipality of St. Croix will result
in the fiscal year 1939 because of sugarcane crop losses in the years
1938 and 1939.
Municipality of St. Thomas and St. John.-The actual revenues of
the municipality of St. Thomas and St. John were $213,981.94 which
represents an increase of 19 percent over the revenues of the preced-
ing fiscal year. Income-tax collections were $81,776, an increase of
130 percent over the preceding fiscal year, and an increase of 461
percent over the fiscal year ending June 30, 1935. Receipts from
customs dues were $17,137, an increase of 17 percent over the fiscal
Municipality of St. Croix.-The actual revenues of the municipal-
ity of St. Croix were $191,816.03, an increase of 7 percent over the
preceding year. Income tax collections were $16,365, an increase
of 36 percent over the fiscal year 1937. Export duty of sugar
brought in $37,303, an increase of 24.5 percent over the preceding
Cost of the municipal governments.-The total expenditures of the
municipal government of St. Thomas and St. John were budgeted
at $276,792.80. The United States contributed a deficit appropria-
tion of $60,000, $10,000 less than the preceding year.
Expenditures of the municipal government of St. Croix were
budgeted at $264,032.53. The United States contributed a deficit
appropriation of $50,000, $10,000 less than the preceding fiscal year.
Reduction of Federal deficit contributions.-The continuation of
the policy of the Congress of the United States in reducing annually
the Federal contribution to the cost of operating the municipal gov-
ernments of the Virgin Islands has now proceeded to a point where
a relatively small appropriation is being made. In the fiscal year
1938 the total deficit contributions were $110,000. In the 1939 Ap-
propriation Act this amount has been reduced to $75,000. It is prob-
able that the municipality of- St. Thomas and St. John will not re-
quire a deficit contribution for the fiscal year 1940. On the other
10 REPORT OF THE GOVERNOR OF THE VIRGIN ISLANDS
hand, St. Croix will require assistance in one form or another in
carrying the costs of its municipal services for the next fiscal year
because of serious losses of revenue resulting from drought, whose
effects will be apparent in municipal revenues for at least 3 years.
The St. Thomas Harbor Board.-The revenues of the St. Thomas
Harbor Board amounted to $30,869, a decrease of 4.5 percent from
the preceding year. Against these revenues were charged operating
expenses of $24,722, leaving an operating surplus of $6,147. Collec-
tion of ships' dues in 1938 was $8,784, an increase of 2 per cent over
the preceding fiscal year. Pilotage fees totalled $15,826, a decrease
of 5 percent from the preceding year.
THE FEDERAL APPROPRIATION
The appropriation, "Government of the Virgin Islands, 1938," was
Central administration-----------_------------ ------$116, 000
Agricultural experiment station and vocational school--------- 35, 000
Deficit, municipality of St. Thomas and St. John------------------ 60,000
Deficit, municipality of St. Croix------------------------ --- 50,000
Total ---------- ----- ----------------- 261,000
The Third Deficiency Appropriation Act, fiscal year 1937, appro-
priated $4,250 to provide for additional expenses of the government
of the Virgin Islands, primarily in connection with the enforcement
of the United States immigration laws.
After several months' delay at the beginning of the fiscal year, the
following work relief projects, which were carried on as WPA
projects, were authorized, all of which were completed by June 30,
Continuation of reconstruction and renovation of tourist hotel and
Bluebeard Castle----------------- ---------------- ----
Improvement to public highways, St. Thomas and St. John ------
Improvement to sewage disposal and sanitary water supply systems,
and surface drains, St. Thomas-------------------------------
Improvement to streets within the city limits of Charlotte Amalie, St.
Mattress-making and sewing projects for women at Charlotte Amalie,
St. Thomas, and Christiansted and Frederiksted, St. Croix ___---
Road construction, St. Croix _------------------------
Installation of toilet systems at grammar schools and high school,
repair and extension of water and sewer systems, and construction
of cisterns at municipal hospitals, St. Croix---- ------------
Construction of concrete gutters at Christiansted and construction of
hard-surfaced streets at Christiansted and Frederiksted, St. Croix-_
Construction work at Protestant Cay residence, St. Croix----
Administrative expenses----- ---------------------
Total ------------,---------------------- ----- ----- 392, 800
REPORT OF THE GOVERNOR OF THE VIRGIN ISLANDS
WORK RELIEF PROGRAM ACCOMPLISHMENTS
Bluebeard Castle Hotel.-Numerous improvements were effected at
Bluebeard Castle which proved to be necessary after a preliminary
period of operation. Special attention was given to water supply,
sanitary installations, electric wiring, kitchen facilities and other
service units of the hotel. An attractive dining porch was erected
on the west elevation of the main building which has increased the
dining-room space and which greatly adds to the comfort of the
guests. The temporary operation of the hotel by the government
during the period of construction was concluded on November 30,
1937, when a private operator took over the operation of the hotel
under a lease. The operation of the hotel by the government, paying
all costs of operation from income, ended with a slight profit which
has been deposited in the United States Treasury. The hotel has
proved to be a useful means of attracting visitors to the Virgin
Islands and has adequately fulfilled the purposes for which it was
Roads.-Further progress was made in improving the road system
of the Virgin Islands in accordance with a master plan approved
by the local authorities. A total of 17 miles of road were improved
during the fiscal year. Of these 31/3 miles were asphalt penetration
roads in St. Thomas and 113/, miles were asphalt-surfaced roads on
a water-bound macadam base in St. Croix. The completion of the
program laid down for the present fiscal year in spite of delays in
the allocation of funds and in spite of the difficulties of procurement
due to the great distance of the Virgin Islands from supply points,
represents a highly creditable achievement.
For different reasons the local authorities in each municipality are
especially desirous of continuing the road-improvement program
which has been a basic part of all relief programs. In St. Thomas
this program is intimately connected with the development of this
island as a tourist center. Already the improvement of certain roads
has led to the purchase of land in hitherto inaccessible areas by those
who are interested in constructing residences for their own use or for
rental to winter residents. In St. Croix road improvement is of
especial importance to the sugar industry because sugarcane is at the
present time brought to weigh houses in animal-drawn carts or in
motor trucks, and from there is transported to the factories by motor-
truck. Reduced transportation costs because of the improvement of
roads will benefit all classes of sugar growers.
Sanitary improvements.-Much progress can be reported in the
improvement of sanitary facilities in the town of Charlotte Amalie.
Due to limitations of water supply, sanitation facilities. and sewage
disposal have historically constituted a serious problem in the towns
12 REPORT OF THE GOVERNOR OF THE VIRGIN ISLANDS
of the Virgin Islands. In 1922 a beginning was made in each of
the towns of the Virgin Islands in laying sewers and, in Charlotte
Amalie, in establishing a salt-water supply system for sanitary
flushing purposes. Substantial improvements to the salt-water sup-
ply system and sewer system in Charlotte Amalie were accomplished
in the fiscal year 1937 with some slight extension of the service
to sections of the town which had previously, not been served. In
the past fiscal year sewer and water mains were constructed to serv-
ice all sections of the town. Additional funds are necessary to in-
stall laterals and secondary sewer and water lines to make possible.
the complete substitution of sanitary flushing systems for the primi-
tive arrangements which have previously been in use. In St. Croix:
sanitary toilet facilities were installed in numerous municipal school
Street surfacing and drainage.-Much progress was made during
the year in surfacing streets and improving surface drains in each of
the three towns of the Virgin Islands. This program which has
been prosecuted with successful results over a number of years has
added greatly to the cleanliness and attractiveness of the towns and
to the health and comfort of those living in them or visiting them.
Women's projects.-A mattress-making project has been conducted
with success in St. Thomas and a sewing project has been conducted
in both St. Thomas and in St. Croix during the year. These proj-
ects are intended to give employment to women and have greatly
aided many persons who are without other means of support. Ar-
ticles produced have been distributed to relief clients and have thus
served the double purpose of furnishing employment and direct
Protestant Cay residence, St. Croix.-The reconstruction of this
attractively located and interesting structure was completed except
for certain minor details and except for the reconstruction of adjacent
outbuildings. This residence will be made available as quarters for
an officer of the government of the Virgin Islands.
No appropriation was available during the fiscal year for the
further development of the homestead projects which have consti-
tuted an important element of the rehabilitation program of the
Virgin Islands. After many difficulties and delays a small admin-
istrative allotment was made available to pay for the administra-
tive costs of supervising 400 or more homesteaders who have been
established on the land and to maintain clerical records of collec-
tions made from them. The local authorities in the municipality
of St. Croix cooperated wisely and effectively in advancing cultiva-
REPORT OF THE GOVERNOR OF THE VIRGIN ISLANDS
tion loans to homesteaders from the meager resources of the munic-
ipality. The success of this program depends greatly on continuous
and careful supervision, and on the establishment of loan funds
for cultivation aids. The program was established on a 20-year
rental-purchase basis and requires continuing administrative super-
vision during that time. Partial provision is made to carry this
administrative expense in the appropriation for the government of
the Virgin Islands for the fiscal year 1939. The program cannot
be developed to its fullest potentialities unless additional funds
are made available for administrative purposes on a relatively per-
manent basis and for cultivation aids.
Repayments in a total amount of $12,970 were made to the United
States Treasury by homesteaders and from homestead sources dur-
ing the year. The excellent record established by the homesteaders
in previous years in meeting their amortizing rentals and cultivation
loans when due will, unfortunately, not be maintained during the
coming fiscal year. As indicated elsewhere in this report, the great
majority of homesteaders, who are located in the island of St. Croix,
have received a gross return from their cash crop of only 29 per-
cent of their income for the preceding fiscal year as a result of
drought and low sugar prices. At the same time, it is reported that
of 298 homesteaders in St. Croix not more than 15 will default en-
tirely in meeting rental payments or cultivation loan payments when
due. The record established by homesteaders in previous years gives
ample evidence of the wisdom of establishing field laborers in St.'
Croix on small farms. This program should not only be fully sup-
ported by making permanent provision for meeting administra-
tive costs and by establishing permanent arrangements for financ-
ing small farms, but should also be greatly extended so that the
sugar business may continue to furnish employment to agricultur-
ists in the island of St. Croix who would otheriwse be destitute.
By arrangement with the United States Housing Authority, the
administration of the three low-cost housing projects erected in the
Virgin Islands by the PWA Housing Division has been turned over
to the government of the Virgin Islands. This arrangement has
made it unnecessary to establish an expensive management organi-
zation and has therefore permitted the establishment and maintenance
of low rentals at these projects.
Both housing projects in St. Croix have been fully occupied almost
from the date when they were made available for occupancy. Of
the 58 units in the Charlotte Amalie project there are as yet only 41
occupied. The organization of a community club at this project
14 REPORT OF THE GOVERNOR OF THE VIRGIN ISLANDS
has been instrumental in arousing greater interest and understand-
ing on the part of prospective tenants. It is anticipated that all
of the units of the St. Thomas project will soon be occupied.
The following figures set forth the status of rental collections:
Earned in- Cash collec-
H. H. Berg Homes -..... .--------. -_- - -----.. $905. 48 $800.33
Bassin Triangle ---- ------ -------- ------- ----- --_ 1,175.94 1, 027.98
Marley Homes -------------------------------.... ............ .. 1, 373.04 1, 208.88
3, 454. 46 3, 037. 19
The local housing advisory committee in each island has main-
tained an active interest in these projects and has made numerous
valuable suggestions for their better management, and for physical
improvements which have proved to b& necessary since these units
have been occupied. It is hoped that arrangements can be made
whereby a greater proportion of rental income can be made avail-
able than is now the case to make needed improvements.
The office of the General Counsel of the United States Housing
Authority has cooperated generously in preparing drafts of legisla-
tion for enactment by the municipal councils of the Virgin Islands
to create local housing authorities. These measures have been in-
troduced in the local legislatures and are now under consideration.
If they are enacted, they will permit the construction of additional
low-cost housing to replace low-standard, unsafe, and insanitary
Thirteen structures which formerly were owned by the Danish
State were transferred to the United States at the time of the execu-
tion of the Treaty of Cession between Denmark and the United States
under which the Virgin Islands were transferred to the United
States. A number of these structures are historically and architec-
turally interesting. It has not been possible to maintain them ade-
quately for lack of funds and for lack of adequate architectural and
planning personnel. As a result of a request by the Secretary of the
Interior to the Secretary of the Treasury, an agreement has been
reached under which the Treasury Procurement Division of the
Treasury Department will undertake major repairs and reconstruc-
tion of these buildings. Plans are nearing completion for the major
repair of government house and the administration building in St.
Thomas, and of government house in St. Croix. Plans are also in
preparation for the major repair of all other Federal buildings used
by the government of the Virgin Islands. Construction work will
REPORT OF THE GOVERNOR OF THE VIRGIN ISLANDS
be undertaken in the new fiscal year which will preserve and im-
prove these structures whose condition has not been satisfactory in
The Treasury Procurement Division has, during the year, com-
pleted the Federal building at Charlotte Amalie which houses the
post office, the customs department, and the United States Public
Health Service. This handsome structure which is located on a
commanding site in Charlotte Amalie has won universal praise.
THE VIRGIN ISLANDS COOPERATIVE
The steady progress of the cooperative has continued during the
fiscal year under review. The organization has.carried on entirely
on its own resources. Despite the fact that no financial aid has
been received from any Federal agency, it has been possible to
employ a greater number of people and give them increased
During the fiscal year 1937-38, 742 persons have worked for the
handcraft division of the cooperatives making baskets, hats, and
other straw goods, sewing and embroidering linen, making dolls and
other novelties, making jams and preserves and a variety of other
hand-made articles. More than 200 persons are steady workers.
Nearly 100 have been on every weekly pay roll. The production
pay rolls for the year carried 8,287 persons for a total of $20,635.49,.
as compared with 5,578 persons for a total of $14,386.78 for the fiscal
year 1936-37. Individual production has increased during the fiscal
year just closed over the average production per worker in past
As a result of this increase in production, the cooperative has been
in a position to take better advantage of the increased tourist trade
that was experienced this year.
The export trade fell off slightly but mail-order business im-
proved so that the aggregate of sales to the United States still shows
In August 1936, the workers received a 3 percent bonus on their
earnings for the fiscal year 1935-36. In December 1937 they re-
ceived a 2 percent bonus on the earnings of 1936-37. The decrease
in the percentage of bonus was due to the fact that since July 1,
1936, the organization has received no Federal aid and has been
carrying all its overhead expenses. It is expected that the board of
directors will find it possible to authorize a larger bonus for 1937-38.
The cabinet-makers cooperative operating as a subsidiary unit of
the Virgin Islands Cooperative have been active throughout the year
furnishing work for a number of young men and boys.
16 REPORT OF THE GOVERNOR OF THE VIRGIN ISLANDS
The rural division of the cooperative, known as the Rural Coop-
erative Association, has also carried on successfully. This organi-
zation now has 63 members including practically all the small
farmers of any importance.
In order to encourage more and better production of poultry for
which there is a great demand in this market, the Rural Cooperative
has established a demonstration poultry farm at the agricultural
experiment station at Lindbergh Bay. The farmer-members have
evinced much interest in the project and many of them are planning
to go in for poultry raising.
AGRICULTURAL STATION AND VOCATIONAL SCHOOL
Efforts have been concentrated in the latter part of the fiscal year
in the direction of extension work. In the past, extension work has
not been emphasized as forcibly as it might have been and a reorgan-
ization is in process which should show definite and concrete results
in the improvement of agriculture in all its local phases. A definite
program of extension activities has been outlined for the new fiscal
year. In St. Thomas, bench-terracing is being experimented with
in the hope of inaugurating a system of constructive agriculture.
Although much has been accomplished by the vocational school in
formulating sound principles and practices, there was under con-
sideration at the end of the fiscal year a reorganization of vocational-
school activities on a cooperative basis with the municipal department
of education to provide for the carrying on of academic work at
the Christiansted High School for the vocational-school students,
and agricultural and related courses at the vocational school for
the ninth, tenth and eleventh and twelfth grades of the high school.
This change is planned for the beginning of the new school year.
MUNICIPAL GOVERNMENT ACTIVITIES
Education.-Unfortunately, nothing was accomplished during the
year on the two vital needs of educational activities, a revision of
the antiquated school law and preparation of new courses of study.
Marked interest has been displayed by the teachers in all facilities
for self-improvement in professional training. Many teachers at-
tended summer school at the University of Puerto Rico, some as-
sisted by funds appropriated by the municipal councils; and many
others pursued courses for professional advancement or secondary
credit in the Teachers Institute in Charlotte Amalie.
A Jeanes teacher came to the municipality of St. Thomas and
St. John during the year through the interest of Dr. Arthur D.
Wright of the Southern Education Foundation. The Jeanes pro-
gram was extended to this municipality' but was somewhat retarded
REPORT OF THE GOVERNOR OF THE VIRGIN ISLANDS
due to the fact that the Jeanes teacher was required to supervise
elementary instruction. A rearrangement of personnel will eliminate
this factor in the new school year so that the Jeanes teacher may
direct her attention wholly to the education-in-living program which
has been highly successful in the municipality of St. Croix. Total
enrollment in all public schools was 3,374 as compared with 3,249
in the previous year.
Health and sanitation.-The general health of the communities
has been good and there were no epidemics. In St. Thomas nearly
1,500 school children were examined and treated for correction of
conditions other than malnutrition. The examination showed a
large percentage of malnutrition due to lack of proper and varied
diet. There was a severe outbreak of whooping cough in St. Thomas
late in the fiscal year.
The insanitary nightsoil removal service continues to be a poten-
tial menace to the health of the islands. The abandonment of the
service by compulsory installation of sanitary automatic flushing
toilets would be a great aid in the prevention of infectious and con-
In St. Croix research work on elephantiasis was continued. Oper-
ating and bandaging procedures were worked out. This work has
been so successful that the chief municipal physician was invited to
lecture on elephantiasis before the School of Tropical Medicine in
San Juan, P. R.
Inadequate funds have made it impossible, particularly in St.
Croix, to further improve and strengthen the medical services and
to do needed public-health work. There are needed in both munici-
palities new, modern hospital buildings, with up-to-date equipment,
designed to fit the needs of the communities they serve. The present
hospital facilities, even though greatly improved in the past two
decades, have served their useful lives and must be replaced with
new and modern structures as soon as possible.
Welfare.-Tenant selections for the three housing projects of the
United States Housing Authority, viz., the 58-unit, 106-room, H. H.
Berg Homes at St. Thomas; the 38-unit, 70-room Bassin Triangle
at Christiansted, and the 30-unit, 54-room Marley Homes at Fred-
eriksted, greatly increased the volume of activities of the welfare
Mattress-making and sewing projects for women were conducted
from W. P. A. funds. The welfare departments also acted as em-
ployment offices for the assignment of persons from the relief rolls
to work projects.
In St. Thomas, recreational activities have been sponsored on
public tennis courts and at a public beach house. A community
chest was organized.
18 REPORT OF THE GOVERNOR OF THE VIRGIN ISLANDS
In St. Croix special emphasis was placed on public-health nursing
service in the schools and in the homes of the underprivileged.
Public works.-The routine activities of the municipal public works
departments were accomplished without interruption of the public
services within the limitations of appropriated funds and' available
transportation facilities. Important public works projects, such as
improvements to public highways, street improvements, repairs and
-extensions of water and sewer systems were carried on from WPA
funds under the supervision of the public-works departments. These
are detailed elsewhere in this report.
Harbor.-814 ships with a gross tonnage of 3,239,975 entered the
harbor of St. Thomas. Of this number, 70, with a tonnage of
285,512, were Government ships and 744, with a tonnage of 2,954,463,
were merchant ships. This was the best shipping year of the port
of St. Thomas for the past 20 years.
Public libraries.-The three public libraries continued their con-
tribution to juvenile and adult improvement within the limitation
-of the public appropriations for their support. The circulation in
the Frederiksted Library increased due to the addition of a children's
room. The St. Thomas Public Library acquired through a private
*subscription of funds a valuable collection of books, manuscripts, and
woodcuts of the late Dr. Charles Edwin Taylor, author of Leaflets of
the D. W. I.
Police and prison.-There has been in progress a decided effort
to improve law-enforcement activities. There were no unusual oc-
currences, but the routine work of the departments has been increased
considerably as a result of new tax, automotive, and disease-control
ADMINISTRATION OF UNITED STATES IMMIGRATION LAWS
Further studies of the immigration laws and of questions relating
to their application and enforcement in the Virgin Islands were made
by representatives of the State Department, the Labor Department,
and the Interior Department, due to the fact that deportation pro-
ceedings conducted in accordance with the findings of earlier studies
were found to be legally defective. As a result of these studies, it
was held that the Immigration Act of 1917 applies to the Virgin
Islands and that the Labor Department is responsible for the admin-
istration of the United States immigration laws in the Virgin Islands.
Procedures were worked out for the appointment of officers of
the government of the Virgin Islands as immigration officers who
will administer the immigration laws under the direction of the
:Secretary of Labor. Many difficult problems of interpretation of
REPORT OF THE GOVERNOR OF THE VIRGIN ISLANDS
law and of its application to individual cases have arisen. Espe-
cially difficult are the cases of persons who entered the Virgin Islands
prior to June 1925, when efforts were first made by the officers of
the government of the Virgin Islands to enforce the immigration
laws. In many of these cases there is no record of entry because
of the inadequacy of records.
The new procedures for the administration of the immigration laws
became operative on July 1, 1938, and have thrown a great additional
burden of responsibility upon the officers of the government of the
Virgin Islands. Request has been made for further assistance from
the Department of Labor to secure a determination as to the status
of the many persons who appear at the present time to be "hardship
cases." The requirement contained in recent relief acts debarring
aliens from employment on relief projects has been rigorously en-
forced with the result that, in many cases, all possibility of employ-
ment has been denied to persons who were not even aware of the fact
that they had not acquired United States citizenship as a result of
various enactments by the Congress which accorded that status to
natives of the Virgin Islands.
CIVILIAN CONSERVATION CORPS
The outstanding achievement of the CCC was the completion of
drainage work at Frederiksted swamps, St. Croix. This area, which
was a breeding place for malaria mosquitoes, because of its situation
immediately adjacent to the town of Frederiksted, constituted a per-
ennial menace and on several occasions was responsible for malaria
epidemics of considerable proportions. Since the completion of
drainage work by the CCC, the malaria epidemic has subsided and
only a few sporadic cases developed during the year. All low-cost
housing projects were graded and landscaped with success. Blue-
beard Castle Hill was likewise graded and landscaped. A number
of afforestation projects were begun during the year by the CCC
organization including the planting of hardwood trees at Calabash-
boom, St. John; planting of cocoanut palms at Sandy Point, St. Croix;
and the development of approximately 4,000 acres at the east end
of St. Croix as a mahogany forest.
The Civilian Conservation Corps likewise carried on a substantial
road program of which the St. Peters Mountain Road improvement
constitutes the most important achievement. This scenic drive is
being extended at the present time with a view to developing a cir-
cular drive in an area whose scenic attractions are outstanding.
Much progress has been made in developing a farm-to-market road
linking the northside estates on which 70 families have been estab-
20 REPORT OF THE GOVERNOR OF THE VIRGIN ISLANDS
listed on small farms with the Bethlehem Sugar Factory in St.
Croix. Notable progress has been made in developing government
house gardens in St. Thomas.
At the request of the Secretary of the Interior, Mr. Frank H.
Knapp, of the Soil Conservation Service of the Department of Agri-
culture, made a study and report on the possibilities of water conser-
vation with special reference to conservation work which might be
carried on by the Civilian Conservation Corps organization. Mr.
Knapp prepared an excellent report in which numerous helpful rec-
ommendations were made which will be used as a guide for the future
activities of the Civilian Conservation Corps.
During the year a side camp was established in the island of St.
John where there are now 20 persons enrolled in the senior camp.
The senior camp in St. Thomas has maintained an enrollment of
approximately 75 persons, and the junior camps in St. Thomas and
St. Croix have maintained their authorized enrollment of 100 men
each. In the next fiscal year it is proposed to increase the enroll-
ment of the St. Croix Camp from 100 to 150 men.
The unexpected and unfortunately prolonged delay in securing
relief allotments after the conclusion of the 1937-38 work-relief pro-
gram on June 30, 1938, has revealed the great dependence of the
Virgin Islands on the aid given them from this source. This is espe-
cially true in St. Croix where the program of economic rehabilitation
was dealt a severe blow by drought and low sugar prices.
The sugar business is in serious jeopardy and must be reorganized
if it is to survive in the island of St. Croix. Definite measures must
be taken promptly to relieve that business of the special disabilities
imposed on it and to modify the basis on which it has been organ-
ized in the past.
The cattle business must be assisted to prevent the loss of its only
market. A change in the type of animal produced must be effected,
a tick-eradication program must be carried through to a successful
conclusion, and better marketing facilities must be developed if the
great potentialities of this business in the Virgin Islands are to be
The harbor of St. Thomas must be improved in order to maintain
its present outstanding position in the Caribbean area. Continued
emphasis must be given to the development of the tourist trade which
has proved to be an important factor in the economic rehabilitation
of the island of St. Thomas. Great fear has been expressed locally
that the enforcement of the immigration laws and the navigation
laws will hinder the shipping business of the island of St. Thomas.
REPORT OF THE GOVERNOR OF THE VIRGIN ISLANDS 21
It cannot be determined at this time whether or not this apprehen-
sion is well-founded. Some adjustments will undoubtedly have to
be made and some loss of shipping business may finally result.
Although much progress can be recorded in the improvement of
the basic services in both the municipalities of the Virgin Islands,
there is, at the same time, obvious need for substantial improvements.
One of the outstanding needs of the municipalities is the reconstruc-
tion and improvement of the municipal hospitals. It is imperative
that means be found in the very near future to carry through a pro-
gram of hospital construction so that the steady improvement of the
medical service in the Virgin Islands which has been characteristic
during the past generation may be continued.
LAWRENCE W. CRAMER, Governor.