THE United States purchased the Virgin Islands from Denmark in 1917 for $25,000,000. The purpose of our government--as high naval officers frankly admit -- was to prevent Germany from obtaining the islands and establishing a base from which to threaten Porto Rico and the Panama Canal. In acquiring them we assumed the considerable responsibility of their administration. Now some of the problems involved are being brought to public attention by the proposal to send a committee of islanders to Washington to seek the replacement of the naval government by a civil government.

There have been six American governors of the Virgin Islands since 1917. Most persons agree that the frequent changes in authority have been detrimental to the progress of the Islands, and there can be little doubt that government by an American business man, which is favored by many if not most of the native leaders, would have better economic effects than a continuance of the present system. It is not usually claimed that naval officers are especially fitted by training for participation in civil government, although those on duty in the Virgin Islands are able in their profession and worthy representatives of the navy.

Also, an independent judiciary would be more in accord with American methods than is the present judicial system, in which the naval officer at the head of the government has the power of veto over the court's decisions, and also the power of removal. It is this situation which led to the charge made recently by a former judge that he was arbitrarily removed because he refused to allow one of the governors to dictate a certain decision. The judiciary should be made Federal.

One question stirring the people to-day is fear of an administrative union with Porto Rico and the consequent over-running of the Virgin Islands with Porto Ricans, for whom the islanders harbor a deep dislike. The newspapers have joined in a campaign, and carry capital-letter scareheads such as: "Annexation to Porto Rico would be worse than death to the Virgin Islands -- Therefore let us prefer death and the grave to annexation." And: "Chained to Porto Rico! St. Croix, St. John, St. Thomas say NEVER!!" (the latter in letters an inch and a quarter high). When the Secretary of the Navy assured the governor that no such union was being contemplated in Washington, the papers replied: "No smoke without fire -- St. Thomas says, No chains to Porto Rico!" Congress probably will be asked to investigate and determine whether such an alliance is really contemplated. Meanwhile, mass meetings are being held at which the radical leaders exhort to a fight for independence.

Another demand of the islanders, probably their principal one, is that their citizenship status be improved. They ask that they be declared citizens of the United States, with the right of franchise, instead of "Virgin Islanders," who cannot be naturalized even if they so desire.

Other gradual improvements asked for by the natives are the adoption of a new organic act (the colonial council has appointed a committee to draft one); the stabilization of the currency; the extension of the coastwise shipping laws; the erection of technical schools; the establishment of workmen's compensation and civil service acts; the enactment of a more equitable taxation system; the modification of the Volstead Act; and other changes less important.

The price at which the Virgin Islands were bought from Denmark ($295 an acre) compares with two cents an acre for Alaska, 27 cents an acre for the Philippines, and $35.80 for the Canal Zone. The total population is 25,950, of whom 97 percent are negroid; the language spoken is English; and illiteracy is approximately 20 percent. The colonial councils which govern the islands may initiate any legislation for local government which they see fit, but it is subject to the approval of the naval governor before it becomes law. Further, the governor may dissolve a council if he feels there is cause. The Danish laws in effect at the time of the transfer to American sovereignty have been continued by treaty until Congress may order otherwise. So far the only important steps taken by Congress affecting the islands have been the introduction of the income tax and prohibition. The latter became fully effective in July, 1922.

The inhabited islands include St. Thomas, which is the seat of government and has the finest harbor in the West Indies, fully equipped for coaling and oiling ships; the agricultural island of St. Croix, where sugar cane is raised, cattle grown, and sugar made in three factories controlled by Danish capital; and the smaller island of St. John, on which live one white man and 950 negroes. St. John is the real home of the bay tree, which produces the oil which the world-famous bay rum of the Virgin Islands is manufactured. The only industries of St. Thomas are bay rum and those centering about the harbor.

St. Thomas was settled in the seventeenth century. Even fifty years ago it was a metropolis, with schooners and ships calling from all the islands and carrying away cargoes that often amounted in value to several hundreds of thousands of dollars. It was in these days that gold coin, the medium of exchange, was carried through the streets in wheelbarrows. This prosperity extended back beyond the days when Alexander Hamilton came to St. Thomas from St. Croix to buy silk dresses for his mother's sister. To-day, the solidly built warehouses that once were filled with mountains of merchandise are merely stores; it is a town of shop-keepers instead of a city of merchants. This is usually explained by saying that the wireless has obviated the necessity of ships stopping at St. Thomas for their cabled orders, or that the prohibition law is driving ships of foreign register away and is ruining the bay rum industry.

Before discussing the economic factors of the prosperity or poverty of the islands, it should be explained that the monetary system of the islands is made up of Danish francs and bits, the franc amounting roughly to twenty cents American, the rate of exchange being $1.05 Danish for one dollar American. The money is issued by "Det Danske Vestindske National Bank" which controls the financial situation until 1924, by virtue of the treaty with the Danes which allowed it to continue as a monopoly until that date. It naturally does not make long-time loans, and the United States Government cannot establish a land bank or other institution to relieve the tightness of money until 1934. It is not irrelevant to point out here also that Danish capital controls, in addition to the bank, the coaling and docking company, the apothecary (whose monopoly expired this year), and the electricity plant, and that an English company controls the cable company, from which an annual subsidy of $8,000 was withdrawn recently by the American Government. There is little American capital invested in the islands.

We shall now examine the cry of failing business.

Prior to the transfer of the islands to American control, the largest amount of bay rum sold and exported during any fiscal year was the 32,839 gallons sold in 1915-1916. The smallest amount sold since the transfer was 28,719 gallons, in 1917-1918. And in 1919-1920 the amount sold and exported was 89,105 gallons, between two and a half and three times the amount sold in any year during the Danish régime. During the fiscal year ended last June, 79,630 gallons were sold. One of the four dealers in bay rum in St. Thomas now has two orders aggregating 140,000 gallons. There are many other smaller orders, but these two alone will exceed by 50,000 gallons the greatest previous annual export for all of the islands.

Thus it can be seen that prohibition has not killed the bay rum industry. The prohibition law did, however, cause the loss of thousands of dollars to persons who had been manufacturing the famous St. Croix rum. In the fiscal year ended June 30, 1916, the sale and export of rum was 69,900 gallons. Since the law became operative, thousands of gallons of molasses, the by-product left after the sugar is manufactured, and from which rum was made, have been allowed to waste. A group of American business men now proposes to use the sugar cane on St. Croix in the manufacture of alcohol. This syndicate would guarantee to buy the whole sugar cane crop for the manufacture of alcohol for export, a tax of $2.20 a gallon being paid into the colonial treasury. This money alone would come near to making the Virgin Islands self-supporting.

Economists (and collectors of customs) tell us that a community in a condition of healthy prosperity should show a trade balance in its favor. In other words, exports should exceed imports. This condition does not exist in the Virgin Islands, to judge only by the statistics, which show imports last year to the value of $2,061,358 for all the islands and exports to the value of $400,152. But these import figures include bunker coal and fuel oil, the former amounting last year to 61,325 tons and valued at $295,441, the latter amounting to 2,051,374 gallons and valued at $149,993. Were this coal and oil, which are sold to ships that stop at St. Thomas only for fuel, to be figured as exports, that item would more nearly equal the imports and we would have a fairer criterion to the prosperity of the islands. In addition, a quantity of ships stores, charcoal, etc., are sold to sloops and schooners and not counted as exports.

St. Thomas harbor unquestionably is one of the best and most beautiful in the world. The entrance is 900 feet wide at its narrowest point, while within lies the landlocked and perfectly protected bay, a mile in diameter. Here, during the fiscal year ended June 30, 1925, there called 428 ships, possessing a tonnage of 1,472,262 tons (ships of less than 100 tons not counted). The average per month was slightly more than thirty-five. A drydock has now been bought from the United States Shipping Board and is to be brought to St. Thomas. With the arrival of the dock an increase in prosperity is predicted, as additional ships will come to the port for overhauling. There is no dock at San Juan, the nearest being at Fort-de-France, Martinique.

To the writer, who has visited other islands under American government, as well as the West Indian colonies of several European countries, the natives of the Virgin Islands seem on the average more intelligent, more cheerful and of a better class generally than those of the other islands of the Caribbean. Also, they are far cleaner and better-dressed (compare the number who wear shoes). They are personally loyal, but show a tendency to go where they are led rather than to form their own policies. This explains the size of the following of the chief so-called radical of the islands, the editor of a newspaper which constantly attacks the government for alleged maladministration. He does not conceal that he is supported through the American Civil Liberties Union. However, most of the sober-minded citizens, and there are a number such, are quietly accepting American rule, and are waiting to see how Uncle Sam will treat his "new nephew" when he begins to realize the full measure of the responsibilities he has assumed.

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