Bread (foreign), Land (wasted), Liberty (denied)
Badillo-Veiga, Americo
Major General Nelson A. Miles, Commander-in-Chief of the United States military forces that invaded the island in 1898, gave a message to the people of Puerto Rico, declaring "[We] come...
...Proportional-profit farms ranged from 100 to 500 acres, owned by the Land Authority but operated through management contracts that required farms be managed "for the benefit of each and every worker employed . . . representing their interest [as that] of partners in the enterprise...
...Ibid., p. 189...
...As early as 1963 an editorial in El Imparcial, one of the main newspapers in the country, observed: The wealth and the economy of the island are being hoarded in all areas...
...When Negron Lopez declared his candidacy for the PPD nomination two years before the 1968 elections, the party's divisions were exposed...
...During 1942-46 Puerto Rican bank deposits grew from $76 million to $298 million, while Puerto Ricans had invested nearly $380 million in U.S...
...By 1928, the tonnage of coffee exports was roughly one-sixth of what it had been in 1914...
...The commonwealth won 60% of the votes to the statehood's 40...
...All this could be accomplished without any reduction in the level of sugar production...
...Gayer, et al., The Sugar Economy ofPuerto Rico (New York: Columbia University Press, 1938), p. 112...
...market...
...REVERSAL FOR COFFEE EXPORTERS In the mountainous coffee regions, the combined results of Puerto Rico's shift of colonial masters had a different, nearly opposite effect...
...tariff walls in 1900 protected U.S...
...The means by which expropriated lands were distributed included the creation of family farms and proportional-profit farms, and the rural settlement of agregados (sharecroppers) -of which the last two were most significant...
...Yet answers to these questions were increasingly articulated not by the PPD leadership but by the semiindependent groups within its ranks, the CPI and the GCT...
...A similar situation occurred in the tobacco industry...
...Hundreds of coffee hacendados were bankrupted between 1926 and 1933, when the value of coffee exports declined from $7.1 million to $125 thousand., A study in 1936 found that 67% of the coffee farms surveyed were mortgaged and the average debt represented 82% of the actual value of the farm...
...Jaffee, People, Jobs and Economic Development: A Case History of Puerto Rico Supplemented by Recent Mexican Experiences (New York: The Free Press, 1959), p. 18...
...Cambio y desarrollo en Puerto Rico: La transformacion de la orientacion hacia el desarrollo del PPD (Rio Piedras: Editorial Universitaria, 1980), p. 128...
...The U.S...
...hardly an alternate source of employment in the sugar region during the "dead season...
...Some of these countries were able to offer a labor force at one-third the minimum wage paid in Puerto Rico...
...U.S...
...The PPD and its expanding bureaucracy became the representative, protector and defender of the public's interests...
...Puerto Rico Planning Board, Economic Development, p. 61...
...Rexford G. Tugwell was named governor of Puerto Rico, and the United States entered the war on the side of the Allies...
...But most important was the Land Law of 1941, which was, in the words of one commentator, "the voice of a landless people...
...unions and employers who hoped it would undercut unfair competition and the growth of runaway plants...
...In the private sector it functioned mainly to reinforce the local banking system...
...Moreover, by the 20s, intensive cultivation had depleted the land, requiring increased use of fertilizers to maintain yields...
...The colonos' precarious situation was further threatened by the Jones-Costigan Act of 1934, which limited the production and marketing of sugar from all areas supplying the U.S...
...These attacks were abetted by the enormous acceleration of labor migration in the late '40s...
...The increasingly capitalist-minded coffee growers had expelled the traditional sharecroppers from their lands, turning them into wage laborers...
...Once the choice was forced, the CPI leadership organized its members into a political party, the Puerto Rican Independence Party (PIP...
...He was not only familiar with the island, he also had well defined ideas about how its long-term reconstruction should be organized...
...TUGWELL AND THE WAR The end of 1941 saw two events which would have important ramifications for the PPD's consolidation of political power and for the path they would choose...
...It could be construed as an attack on colonialism, as an outright demand for independence, even as an oblique reference to socialism...
...The same wartime mentality meant that limitations imposed on industrial growth, obligatory service in the U.S...
...The economic situation was far from encouraging...
...The intraparty struggle took shape as a confrontation between the legislature and the executive, between the "old-guard" headed by Senator Luis Negron Lopez and backed by Munoz, and the "young Turks" headed by Sanchez Vilella and part of his cabinet (though a few legislators backed this reformist group...
...The first two options required full sovereignty, both to allow the island to establish its control over capital movements and to develop a trade policy consistent with its fiscal policy...
...Profits were not reinvested in the island, and in any decision the benefit of the corporation was the only criterion involved...
...Employed in commerce, services, etc., this group was (and is) extremely large in Puerto Rico and saw itself as the government's only economic base-since the poor don't have enough income to pay taxes and the corporations are exempt...
...The new policy was as convenient to the sugar corporations as the old...
...industrial investment by granting corporate tax holidays, but Tugwell vetoed the idea...
...r 0 U Idled machinery room of a small sugar mill...
...Employment levels in manufacturing and agriculture had remained practically stagnant since 1940...
...The party controlled the Senate by one vote but lacked a majority in the House...
...Any political option would be acceptable only if it protected the markets for the island's sugar crop...
...As Roberto Sanchez Vilella, a founder of the PPD and later governor of Puerto Rico, stated: The PPD never maintained a very strong pledge to use the government to promote economic development...
...The leveling off of employment in the sugar and tobacco export enclaves, and the inability of Puerto Rico to develop other productive sectors in competition with U.S...
...Puerto Rico Planning Board, Economic Development of Puerto Rico: 1940-1950, 1951-1960 (February 1951), p. 78...
...While they thus appealed to nationalist sentiments for allies, their critique never went beyond a denunciation of the U.S...
...officials of a union leadership concerned with local conditions...
...In the coastal areas affected by sugar's expansion, tens of thousands of small farmers were displaced by the burgeoning plantations, obliged either to migrate out of the region, or to work for wages on land they once owned...
...THE PACIFICATION PRICE TAG The government's obsession with employment brought new strategies-and new problems...
...3. A.D...
...The authority had the power to expropriate, purchase, hold and dispose of lands in excess of 500 acres, borrow money on its own securities, and use its lands and properties as it might determine necessary...
...Between 1961 and 1968, U.S...
...As Munoz Marin would note some years later, "In order to have these military defenses in a very populated country like Puerto Rico, it seems to me we must be surrounded by a spirit of good will of the people...
...Ironically, it was during the Sanchez-Vilella administration, the defenders of Puerto Rican autonomy, that this policy got its real impetus...
...And, for the better part of the 1950s, these conditions held true...
...tariff...
...With the passage of the Land Law it had fulfilled its main campaign promise, proved that it had the power and ability to push its reform program through the legislature, and managed to present itself as the corporations' adversary and a benefactor to the landless...
...direct investment on the island was three times higher than its total for the previous decade...
...NEW LOOK OR OLD GUARD...
...The protests of these conservative interests merely heightened popular support for the Tugwell administration and the PPD...
...After nearly a decade in government, the PPD hurried to test its solutions for the island's economic problems - solutions that would soon be known as Operation Bootstrap...
...Despite the fabulous injection of federal funds between 1943 and 1946--more than $460 million-at the end of 1945 more than 215,000 people were unemployed...
...Congress, in a style perfected later during the Panama Canal treaty revision, took the liberty of unilaterally amending Puerto Rico's new constitution before giving its seal of approval...
...7. Thomas Mathews, Puerto Rican Politics and the New Deal (Gainesville: University of Florida Press, 1960), p. 155...
...others--the peasantry and the rural proletariat--were liquidated...
...capital was that of tobacco, another export...
...3) promote vegetable crops...
...Nevertheless, in the period prior to the 1944 elections, the PPD's leadership could not afford to challenge the most radical sectors of the party...
...First, it sealed the fate of the governmentowned factories, which had been a headache *By 1965 one-third of all women of reproductive age along with 1% of the men had been sterilizated...
...Congress approved the project, thereafter to be known as Public Law 600...
...Unlike the corporate plantations which still had some marginal lands in reserve, this group had none...
...military presence in Puerto Rico, and the war in Vietnam were all targets of a growing broadbased movement...
...8. Gayer, The Sugar Economy, p. 49...
...Conversely, it hindered the commercial participation of Puerto Rican production in the international markets...
...In less than three decades, the "poorhouse of the Caribbean"had became "profit island,"' generating approximately a third of all the profits earned by U.S...
...Between 1958 and 1967, employment went up 70%, almost doubling in the apparel industry...
...I cannot foresee a time when free trade between Puerto Rico and the United States would not be necessary...
...In fact, the considerable increase in import quotas for crude which Congress granted to Puerto Rico in 1959 and 1965 did begin to attract the desired new breed of operations...
...2) establish light domestic industries...
...It therefore agreed to submit the question of political status to a referendum- after the war...
...The touchstone for this second stage of industrializaton would be the petrochemical industry...
...Thus, unlike the case of sugar, they had no incentive to assist this sector through loans or investments or to negotiate preferential trade agreements on their behalf...
...It is now Uncle Sam's second largest sweatshop...
...In 1964 Munoz decided not to run again and named Roberto Sanchez Vilella, secretary of state, as the PPD candidate...
...Juan A. Silen, Historia de la nacion puertorriquena (San Juan: Editorial Edil, 1973), p. 271...
...But its response was slow and ineffective, encouraging the growth of an opposition force first inside and then outside of the PPD...
...In 1950 the local production of food, on a per capita basis, was a little less than half of what it had been in 1910.34 The PPD's skewed agrarian policy arose as a consequence of various factors: the influence of rural political interests which were a major support of the party...
...But fundamental to any future proposal were maintenance of the common market between the United States and Puerto Rico and continuation of the sugar quotas for the colonos...
...The colonos condemned corporate latifundios whose expansion had reduced the rural propertied class...
...the defenders of "autonomy" were the main architects of Puerto Rico's economic and political integration into the United States...
...THE SPLIT WIDENS The split reverberated at a local level, intensifying the social struggles that had developed over the course of the decade...
...On the other hand, finding that the new rural electrification agency remained in private hands in major urban centers, Tugwell, using the War Powers Act, expropriated the private electric companies and centralized the island's entire electric system under the control of a public corporation in 1942...
...Architects of a "third way," these intellectuals would fight "savage" capitalism with social programs and socialism with social justice...
...Together with the Land Law and the industrialization plan, this provoked virulent conservative reaction...
...The PPD trajectory was bringing forth its logical consequences...
...banks and transnational corporations...
...capital inflows pushed another sector of the PPD into opposition...
...The PPD feared this potential, especially in view of the CGT's increasingly active support for the island's independence...
...Opposition to continued exemption was growing, directed against its inherent inequity, the firms' relatively high profits and the "suspicion that mainland investors received a greater benefit from the program than did Puerto Rico...
...Thus industrialization as pursued by the PPD had several consequences...
...Tugwell was convinced that the organization and thrust of capitalist development could not be left in the hands of market forces...
...The PPD won the elections of 1944, sweeping not only a huge majority of seats in the legislature but also the majority of the municipal contests...
...Welfare and rehabilitation projects, costing $85 million from 1933 to 1938, were extended to the jibaros...
...For example, a cardboard factory would use local bagasse (the cane refuse after sugar is extracted) as its primary input...
...It resolved the need for revenue by increasing taxes and raising the public debt (already $910 million, almost one-third of total GNP by 1965...
...it was a clear political choice, and represented the main economic interests of the PPD...
...According to a Fomento study 350 industrial establishments closed between 1940 and 1948 due to foreign competition...
...This would reduce imports and provide an adequate, low-cost diet for the entire population, with enough left over for some exports...
...The PPD, ruling in the name of the people, thus successfully absorbed the opposition of the popular sectors, especially in the rural areas...
...Free trade" brought large-scale market penetration of U.S...
...Awilda Palau-Lopez, "Analisis historico de la figura de Teodoro Moscosco," in Navas, ed., Cambio y desarrollo, p. 155...
...The program did not create a class of independent smallholders, as intended, but one totally dependent on the Land Authority for a place to live and work-thus strengthening the government bureaucracy...
...Both were necessary, Munoz argued, because "the main thing behind the poverty of Puerto Rico is that Puerto Rico was made poor by nature...
...production and markets...
...Martin's Press, 1973), p. 6. 17...
...Land," the cry of the expropriated or increasingly dispossessed, was a denunciation of 78 NACLA Report the "excesses" of capitalism and a commitment to recreate an idealized past of a society of small landowners...
...The industry had been practically paralyzed since the start of the decade because of the extension of the Fair Labor Standards Act--restricting the excess exploitation on which it was based-to Puerto Rico...
...In their eyes, the city and industrialization represented progress...
...First, there was the massive outflow of jibaros from the mountains to San Juan...
...In this scheme, raw materials or semi-finished products are imported for assembly or finishing on the island and are then exported...
...During the Depression, for the first time in the 20th century, an outside force reached out to thejibaro with a political program promising access to land...
...The PPD viewed the proportional-profit farms as a pragmatic combination of efficiency derived from economies of scale and the "greatest diffusion possible of the economic benefits of the land...
...Those hacendados who were not actually bankrupted were faced with a major crisis, MarlApr 1981 34 exacerbated by the flight of their labor force to the more highly paid jobs on sugar plantations...
...Like the colonos, they favored controls over the "excesses" of capitalism, but abhored open class struggle, the elimination of private property and the rise of collectivism...
...Writing about the crisis of unemployment in the late 20s, Luis Munoz Marin, a rising political figure, stated: The development of large absentee-owned estates, the rapid curtailment in the planting of coffee and the concentration of cigar manufacture into the hands of the American trust have combined to make Puerto Rico a land of beggars and millionaires, of flattering statistics and distressing realities...
...It wants to fight hunger . . .with social justice, operating within an economy that shall be as far as possible planned and autonomous...
...The insular economy had become an extension of U.S...
...It wants to give dignity and purpose to political action.' This cadre of U.S...
...Devised to break the hold of corporate landholding interests, it placed no restrictions on individual landholdings...
...Politics-as-usual, Munoz touted its step toward self government at home while privately assuring the Departments of State and the Interior that this would not threaten the island's relationship to the United States...
...The symbols aptly synthesized the critical questions which had galvanized the militant political struggle during the previous decade, a struggle which the PPD would harness in this populist alliance and, eventually, subvert...
...Despite Fomento's rhetoric of economic planning to "attract" investment, a 1951 report by the Puerto Rico Planning Board noted that "industries migrating to the island have been chosen on the basis of 'selfselection.' These industries have been largely low-capital, highly mobile and low-wage concerns...
...Bolivar Pagan, Historia de los partidos politicos puertorriquenos: 1898-1956, Vol...
...Mathews, Puerto Rican Politics, p. 163...
...BREAD, LAND AND LIBERTY In 1938, Luis Munoz Marin, and the more progressive wing of his Liberal Party, unable to steer the party toward new objectives, founded the Popular Democratic Party (PPD...
...In the late 1950s, certain elements of the Industrial Incentive Act came up for review...
...The immediate consequence was the repression of the movement, but its strategic goal had been achieved...
...Thus they blocked Sanchez Vilella's proposals to protect local merchants and increase the capital gains tax, along with his plan to allow U.S...
...2 Ownership of land was rapidly concentrated so that by the mid-20s, 59 farms held three-fifths of the total cane acreage in the island...
...Fomento's modest industrialization program was practically stagnant, adding little in terms of job opportunities, production or income...
...The expansion of sugar engulfed the best agricultural lands on the coast, eliminating the potential area which could be devoted to food production for domestic consumption...
...Lacking additional good and inexpensive lands to expand production, the corporations increased their productivity by increased capital inputs, especially for mechanization of the manufacturing process...
...And U.S...
...They also acquired existing mills and small sugar farms...
...At the same time, the labor movement was becoming more independent of the PPD...
...The largest number of those remaining were in apparel, employing one-fourth of all manufacturing workers...
...Employment was seasonal, the increased capacity of the mills had reduced the harvest to 51h months, and given the extension of the industry there was *The expansion of sugar had not entirely eliminated the small farms...
...The radicalized social program was politically useful to Munoz and the PPD, who gained in popular support at the same time as they allowed members of the agro-export oligarchy and the urban bourgeoisie to direct the new public agencies...
...MarlApr 1981 1112 NACLA Report The PPD saw continuation of the existing market relationship with the United States as inevitable because it feared the economic disruptions such changes would cause, even had there been some productive sectors on which to base alternative economic development...
...capital in Latin America...
...Silen, Historia, p. 392...
...l 9 The PPD agreed...
...Tugwell, a distinguished member of the first New Deal administration, was in a good position to do just that...
...Why, then, stand in the way of anything which would ease it...
...Decisions on how to deal with the immediate problems were tied to a resolution of the island's long-term political status controversy and its ultimate economic destiny, issues the PPD saw as its own...
...II (San Juan: Liberria Campos, 1959), p. 255...
...Boycotted by the great majority of pro-independence forces, the plebicite became a battlefield between the PPD (again led by Munoz) defending commonwealth and a breakaway group from the Republican Statehood Party, led by Luis Ferre, that pushed statehood...
...Puerto Rico was central to the U.S...
...It also cast its support, reluctantly, to a CGT strike that paralyzed the sugar industry...
...The tragic error which these bourgeois sectors made--like the PPD they dominated--was to believe they could use the power and resources of foreign capital to support their domination of the country without thereby losing their precarious independence...
...government bonds...
...MarlApr 1981 13'4 NACLA Report for the PPD from the start...
...After 28 years of PPD government, Puerto Rican society had been radically transformed...
...6. Gayer, The Sugar Economy, p. 40...
...3 During the 1940s, land for sugar cane production had grown by more than 100,000 acres...
...Koening, A Comprehensive Agricultural Program, p. 258...
...James O'Connor, The Fiscal Crisis of the State (New York: St...
...While the number of large, capital-intensive plants showed steady growth, there was a sharp decline in the rate of new small, laborintensive manufacturing firms coming to the island after 1965...
...Through the first three decades of U.S...
...3 Four U.S...
...In the 1960s, with its fears that high wages would make the island less attractive to foreign capital, the party grew increasingly unwilling to support workers' wage demands...
...The expansion of the federal government in Puerto Rican affairs increasingly paralleled that in market and financial affairs, so that today the federal government has become the principal prop of a bankrupt government...
...TIGHTENING THE RANKS Munoz himself led the attack on the CPI, pressuring the PPD leadership to postpone the decision on the island's political status...
...capital investment on the island also increased dramatically- directed exclusively to the expansion of agricultural production for export to the U.S...
...9. Enrique Lugo-Silva, The Tugwell Administration in Puerto Rico, 1941-1946 (Mexico: Editorial 10...
...They further condemned the policy on the grounds that it worsened income distribution of the country and encouraged rapid integration of the insular economy to that of the United States...
...market...
...In four out of ten cases the mortgage exceeded the total value of the farm...
...2 7 At the same time, the PPD discouraged any truly independent union organizing outside the unions they controlled...
...President Johnson's "Great Society" programs and the substantial increase in U.S...
...By 1947 it had purchased only about 46% of all such corporate landholdings...
...unions on the island, new Puerto Rican leaders began to replace organizers and U.S...
...corporations, the PPD, lacking an alternative development model, extended the Industrial Incentives Act...
...At the end of 1967 Sanchez Vilella announced that he would go after the party's nomination for the 1968 election, and launched a campaign to broaden party rank-and-file participation in the selection of official candidates...
...At the end of the fifties, then, the PPD decided to attract "industrializing industries" to Puerto Rico...
...Puerto Rico's case for independence was on the international agenda...
...monopolies and an element of hope for the rural dispossessed...
...And with this, the two issues which the PPD had tried in vain to overcome returned to center stage: Puerto Rico's political status and its economic future...
...If these programs were able to capture the support of the popular sectors, they also contributed significantly to the depoliticization of both the broad struggles and the class-specific demands of these sectors...
...Enrique Bird-Pinero, "The Politics of Puerto Rican Land Reform: A Study in the Dynamics of Legislation," (Masters essay, University of Chicago, 1950), p. 277...
...These two blessings of enlightened civilization had immediate and devastating effects on the Puerto Rican economy...
...An important aspect of these social reforms was their effect on the nature of political struggle...
...For U.S...
...runaway manufacturers, this increased the attraction of other countries, particularly 1718 NACLA Report in Asia, which were beginning to develop similar programs...
...The PPD in 1967 sponsored a plebicite on political status...
...and both a cement factory and a ceramics plant would be geared to the growth of the local construction industry...
...The elections behind them, the PPD saw the ability of these groups to mobilize popular support for these issues not as an asset but as a threat...
...Along with these developments were significant changes in the manufacturing sector...
...bonds and savings deposits placed in banks in the United States...
...But the war destroyed its most serious competitors in the Pacific and Asia...
...A few years later not only had Cuba and Java substantially increased production, but even the European producers were making a comeback, lowering the market price...
...Emilio Gonzalez-Diaz, "Ideologia populista y estrategia de desarrollo en Puerto Rico, 1940-50," unpublished mss...
...What had been a threat within the party's ranks became an opposition party, and as such easier to deal with...
...It advocated a union of the island's workers in a single federation, indicating its potential ability to unify the working class...
...Ironically, Puerto Rico's government-decreed minimum wage increases came not so much from local economic pressures as from U.S...
...The actions of the CPI, which counted a considerable number of PPD leaders among its members, pressured the party to define itself on the question...
...And the repression mounted by U.S...
...But this optimism was belied by the new trend hidden in the figures...
...Instead, Puerto Rico became a colony of the United States: the banner of freedom became that of "free trade" and the protection was that of the U.S...
...MarlApr 1981 56 Their "anticapitalist" critique was basically a defense of classic capitalism, in which every entrepreneur has an equal chance to succeed...
...20MarlApr 1981 21 the candidate of the party machine and Munoz Marin...
...Yet what was portrayed as "natural" was not inevitable...
...U.S...
...32 This five-and-ten-cent industrialization turned Puerto Rico into little more than a point for the assembly of merchandise and the intensive exploitation of workers, a character which it has maintained to the present...
...The PPD victory in 1940 was a narrow one...
...WHITHER BOOTSTRAP...
...Robert S. Holbrook, "A Study of the Characteristics, Behavior, and Implications of 'Possessions Corporations' in Puerto Rico," Report to the Office of Tax Analysis, U.S...
...As the governing party, it had to define its course on a more thorny issue: the need for high-level and sus10 NACLA ReportMarlApr 1981 11 tained economic growth...
...Overall, the growth of the manufacturing sector could not reduce the unemployment rate, even though about 40% of the labor force had emigrated to the United States in the same period...
...At the same time, the war became a bonanza for the expansion of national income and government revenues, increasing the PPD's capacity to provide jobs and services...
...Clearly, private capital interests did not intend to suport an industrialization program financially, yet they counted on receiving the benefits of such a program...
...It is familiar and sympathetic with the best American life...
...Many interpreted this as a commitment to the long-awaited independence of the island, for four centuries a colony of the Spanish crown...
...Perhaps the best example is the Government Development Bank, set up to provide loans for industrial development...
...The insular market was rapidly organized as an extension of the U.S...
...2 4 The new industrialization program, like the earlier one, responded to an immediate set of needs, thus rejecting the possibility of a comprehensive development plan around some clearly defined social objectives...
...At the end of FY1946, "of the $725,000 granted for private undertakings, less than 12% were for manufactures, the rest was for real estate and commercial operations...
...It wants to break the stranglehold of land monopoly and restore the soil to the people who work it...
...As early as 1928, food imports amounted to $30 million, about one-third of all imports to the island...
...Among the newly established operations, 12 were in the petrochemical field, including refineries...
...But the PPD needed the support of these sectors in the face of a unified conservative opposition...
...Yet while it viewed the subsidies and services given to the poor as the reason for its own high taxes, it failed to apply the same scrutiny to the corporations...
...Such struggle that did take place, then, did so within the party itself...
...According to a 1953 report by Nathan Koening, assistant to the U.S...
...At the same time, attracted by the government's longstanding tax holidays and its manifest indifference to environmental protection, a number of energy-intensive, high technology industries moved to the island, such as chemicals, pharmaceuticals, electronics, metal products and scientific equipment...
...Puerto Rico found itself threatened by their cheaper imports and their ability to offer more favorable conditions to investors...
...Given the importance of Puerto Rico for U.S...
...The PPD government found an answer: Puerto Rico should write its own consitution...
...On the coast, by contrast, the future looked bright in 1920, especially for the sugar industry...
...Tugwell's proposal would base the island's development on the expansion and diversification of agricultural production, thereby supporting an industrialization program designed for the internal market...
...While these tendencies differed in the options they favored, they agreed that a quick solution to the existing colonial situation was needed...
...And, with the return of the veterans from the war, the picture could only worsen...
...More and more it becomes a factory worked by peons, fought over by lawyers, bossed by absentee industrialists, and clerked by politicians...
...As far as rural-urban migration was concerned, a do-nothing policy was consistent with their critique of living standards in the countryside, where peonage and poverty, misery and sickness thrived...
...They also criticized the skyrocketing public debt, increased primarily to finance the infrastructure (from education to roads) required to attract these firms which paid no taxes...
...ensure discipline and efficiency...
...What had been an interim measure had now become a permanent feature of the economic program...
...Bread," the popular demand of the proletariat, represented the promise of a better life, an end to destitution and employment...
...Instead, Fomento and the PPD bet that over the next few decades the price of imported food and agricultural raw materials would remain relatively low and that there would be no decline in the prevailing terms of trade or increase in the relative costs of ocean shipping...
...transnational capital into commerce and finance--once the privileged refuge of local capital--ironically brought about the eclipse of that part of the Puerto Rican bourgeoisie which was at the helm of the PPD...
...It wants to foster industrial development...
...4 This also encouraged market dependence by once self-sufficient farmers...
...metropolitan market and development of the financial, commercial and transportation networks required by the export sector...
...Ibid., p. 301...
...22 Only industrialization via private foreign capital did not threaten the interests which cohabited in the PPD...
...Given its experience with sugar, it was ironic (not to say totally mistaken) that the PPD decided to go with petrochemicals, whose steady growth depended on two factors outside government control...
...Some moved with the harvests, supplementing the product of family labor on small plots with the pittance received on coffee or sugar farms...
...The PPD drew its strength from this...
...It wants to diversify crops, plant food...
...Senate, Hearings on S.227, p. 386...
...The war stimulated economic development beyond the expansion of public employment and services...
...Increasing competition of foreign tobacco in the U.S...
...They both favored a continuation of the common market...
...military and the transfer of more than 80,000 cuerdas (78,000 acres) of prime agricultural land to U.S...
...references BREAD, LAND, LIBERTY 1. A. Rodriguez-Vera, Agrarismo colonialy trabajo a domicilio (San Juan: Imprenta La Democracia, 1929), p. 10...
...Harvey Perloff, Puerto Rico's Economic Future: A Study in Planned Development (Chicago: University of Chicago Press, 1950), p. 222...
...Absentee owners have taken the land, industries, factories, commerce, hotels, newspapers, radio, construction, insurance, food packing, and the cultivation of certain fruit, milk production, fertilizer, soft drinks, jewelry, bread and crackers, parking logs, bowling alleys...
...Munoz' continuing influence (and resistance to reforms) meant SanchezVilella could not get reforms through the legislature...
...In rural areas, four out of five were landless peasants, the NACLA ReportMar/Apr 1981 Luis Munoz Marin addressing crowd during 1940 campaign...
...Meanwhile the PPD was embroiled in ongoing internal power struggles...
...market and a change in consumer tastes from cigar smoking to cigarettes threatened the survival of the Puerto Rican American Tobacco Company, the U.S...
...Between FY1942 and FY1946, revenue from this source totaled $164 million...
...All this elicited renewed optimism in Fomento, convinced that they could have their cake and eat it too...
...domestic sugar producers against foreign imports of raw and refined sugar...
...At the same time, a potential political giant was stirring in the countryside...
...The pro-statehood movement, surprised by the results, formed the New Progressive Party (PNP) and announced their intention of participating in the upcoming elections...
...On its white flag the PPD brandished the image of a red jibaro and the slogan "Bread, Land and Liberty...
...The expansion of U.S...
...The Depression provided the modernizing intellectual--until then far removed from both the rural laboring classes and the seats of power- with a base of operations: the New Deal programs emanating from the United States...
...So much for free trade...
...Only this could drive down energy prices on the island and justify the cost of storage and refining for export to the U.S...
...A third of the eligible voters did not go to the polls...
...The plots, hardly large enough to build a house and grow some subsistance crops, remained the property of the Land Authority...
...Their aspirations were tailored to some measure of selfgovernment and the continuation of the common market for their sugar...
...2 9 It was clear that the common market between the two countries was a common market in Puerto Rican labor as well...
...The red peasant image represented the convergence within the PPD of two powerful political traditions in the agrarian world, that of the rural proletariat and that of the propertied classes...
...Despite popular assumptions to the contrary, U.S...
...The political weight of the colonos was clear, above all...
...In a similar fashion, although to a lesser degree, U.S...
...2 INDUSTRIALIZE, BUT HOW...
...As one author observed, "Puerto Rico must import the very food products it once produced in abundance: rice, beans, potatoes, and corn...
...The PPD would govern over the destinies of the island for the next three decades...
...investors, particularly large retail chains, began to buy up local concerns, monopolize the new commercial centers and set up their own distribution networks...
...Army draft (of Puerto Ricans), the U.S...
...Puerto Rico, they believed, could weather the attack of foreign competition, compensating any loss of small, marginal firms with rapid growth once the second stage was firmly in place...
...From 1897 to 1928, as U.S...
...corporations raised close to one-third of all the cane produced in Puerto Rico...
...investment - as well as the PPD's own tenure...
...In addition to skyrocketing administrative costs, the government had to increase public investment in economic and social infrastructure in order to direct the second stage of industrialization...
...the rest, after deductions for a contingency fund, were distributed among the workers...
...While the situation was not desperate, due to increased production and income during the war combined with a release of spending at its close, it was evident that both the high level of demand for the island's exports and the relatively high level of consumption were products of a purely temporary situation...
...WHERE NOW...
...Between 1899 and 1929 the area devoted to tobacco increased from 6,000 to 30,000 acres...
...Over the decade the government increased direct taxes on personal income by about 20%, winning the dislike (and eventual repudiation) of the salaried petty bourgeoisie...
...II (Washington, D.C.: Government Printing Office, December 1979), p. 74...
...This constraint had drastic consequences for coffee, the island's principal export crop...
...Tugwell's support permitted the party leadership to use the government increasingly as a political base and so lessen its need for mobilized popular support...
...4) encourage population control...
...educated professionals, mostly sons and daughters of the sugar and coffee planters, had returned to the island imbued with dreams of social reforms and experimentation...
...Two years later, the draft constitution was approved by Puerto Rico's constituent assembly, including Munoz' proposal for a future commonwealth...
...Women--labor reserves engaged in cottage industries at the beginning of the period-now were more than half of the industrial proletariat...
...Department of the Treasury, October 1, 1977, p. 6. 36...
...On moving to Puerto Rico, Textron shut down six of its plants in the New England region, throwing some 3,500 employees out of work, which prompted the first accusations that Fomento's industrialization program was a systematic attempt to lure runaway plants...
...Most remained in one place, laboring on a land as exhausted and starved as their hope and existence...
...But the party leadership did not rush to do so...
...In spite of decades of getting results by being in power, the party's inability to propose new solutions to current problems--problems which people increasingly saw as resulting from the party's own policies and actions- weakened its popular support...
...defense of the Panama Canal and the U.S...
...The meteoric rise in employment related to the construction of military installations absorbed a considerable sector of the unemployed labor force, as did the recruitment of more than 60,000 Puerto Ricans into the U.S...
...Indeed they were the more "dangerous" by the fact that, not being political parties themselves, their members could join the ranks of the PPD or even become part of its leadership...
...Convinced that population growth was undermining these efforts, the PPD supplemented this program with population control (through a large-scale female sterilization campaign)* and encouraging workers to emigrate in search of jobs in the United States...
...Finally, while the industrialization program offered a lot of benefits to labor leaders concerned with jobs, it was not without conditions...
...agricultural and food exports impaired the expansion of existing agricultural production for domestic consumption...
...Moreover, the GDB's own loan policy mirrored that of the private banks...
...WAR ENDS-PROBLEMS BEGIN By delaying any decision on political status during the war, the PPD had permitted diverse political tendencies within its own ranks...
...Fred Block, The Origins of International Economic Disorder (Berkeley: University of California Press, 1979), p. 40...
...5. Ibid., p. 45...
...The bulk of this revenue was made up of direct taxes on partnerships and corporations even though, by the end of the war, individual income taxes were increasing faster than corporate taxes...
...PUSHED INTO OPPOSITION Some within the PPD criticized an in18 NACLA ReportMarlApr 1981 dustrialization program that depended on ever higher inputs of U.S...
...Indeed, it even failed to provide a clear direction to industrialization...
...COLONOS CHANGE ALLIES As long as the sugar plantations continued to expand through the 20s, the colonos, with their limited resources, could persevere...
...Rather than relating food shortages to expansion of agroexport capitalism, they could be blamed on German submarines which were attempting to cut off the island, or on the decision to use ships to supply European and Pacific war zones...
...sugar trusts, as was seen in their opposition to a 1937 independence bill...
...The CGT by 1945 included more than 350 member unions, and some of the most active members of the Communist Party in its leadership...
...You must look to foreign markets...
...STATUS ON THE AGENDA The party had another, more contentious problem anyway: the perennial question of 14 NACLA ReportS" "C, C uV ozu tmpuS, comoatLve ivartonaust rarty island in 1948 sharpened the party's search for President.NACLA Report a more substantive solution...
...Rather than shift to new crops or sell out to others who would, the majority of the hacendados offered land parcels to the rural laborers, recreating the old sharecropper arrangement, and headed to the city, their new existence cushioned with rent and status as absentee landlords...
...The Puerto Rican Industrial Development Corporation (Fomento) was directed to develop and operate state-owned factories with production oriented to the island's markets and supported by local inputs...
...During the next four years Munoz and the PPD leadership pursued this goal through an impressive program of social reforms and the adroit use of political patronage...
...Department of Commerce, Economic Study of Puerto Rico ("Krepps Report"), Vol...
...New social classes--an urban proletariat and the bureaucratic pettybourgeoisie, emerged...
...The independence forces successfully brought together broad sectors of the population that had been separated, and forced the political struggle outside of the narrow bounds of electoral campaigns, weakening the power of the traditional parties...
...rule, the plantations with their milling facilities remained encircled by independent farmers who cultivated cane on plots averaging 25 acres or less (in 1935, 86% of all sugar growers held plots of this size...
...Though not stated as such, this implied political independence...
...Moreover, the party shrank from a battle that required that it mobilize, organize and support itself on the popular sectors, above all the workers...
...Jose Vazquez-Calzada, "La esterilizacion feminina en Puerto Rico," unpublished mss...
...Lending policies further favored personal consumption, the purchase of real estate and the expansion of construction and commerce -a direction followed by private capital as well...
...And purchase of new lands was foreclosed by the prevailing excessive interest on investment loans...
...They also began a tenacious campaign against the communists in the labor unions, calling on the TaftHartley law and a local version of the Smith Act to repress the opposition...
...5) promote fishing, forestry and crops such as cotton, quinine and rubber.' 6 Through Tugwell's prodding, the legislative session of 1942 created the necessary agencies to generate the physical and social infrastructure required for "planned" industrial development- the complementary state investments without which private capital projects would be unprofitable...
...2) to use fiscal policy and state banking regulations to gain access to private capital and direct its investment...
...As an employer, Fomento had to contend with a series of strikes and confrontations standing with the workers, while the private sector clamored about state meddling in the economy, denouncing the PPD's "socialism...
...corporation which controlled almost 85% of all the tobacco business in the island...
...During the first half of the decade, the PPD concentrated on controlling the CGT by coopting its leaders, eventually forcing a split in the ranks...
...While not organized as such, these groups were in effect the only leftwing political opposition...
...This new confederation would eventually constitute an important base of support for the PPD...
...This was in large part due to the PPD's social legislation program...
...The rest of the money to cover administrative costs and investment programs would come from the federal government...
...The government's decision to create employment (and stability) at the expense of a more comprehensive industrialization plan was perhaps most quickly and clearly felt in the PPD's policies regarding agricultural production and land use...
...In the early '40s the corporations were less interested in controlling land than in guaranteeing their access to raw materials, namely cane...
...For the PPD, dependent on its control of the government to maintain an explosive coalition of interests, any disruption of the country's narrow economic base was a threat...
...Cultura, 1955), p. 40...
...Joined to these economic boosts was the increased demand for Puerto Rican rum, due to the scarcity of whiskey in the States...
...The incorporation of the insular economy within U.S...
...In July 1950, the U.S...
...While the reform program was not new, Munoz promised to implement it, claiming the party was a new thing in Puerto Rico in being "completely free of the domination of large economic interests...
...Colonos feared, justifiably, that the corporate mills would grind their own cane before accepting colono cane...
...Not only did the government pay compensation, they also assumed the costs of cultivation...
...1 The resettlement program provided for the establishment of rural communities in which small plots were made available in usufruct to the agregados...
...The sugar corporations, large merchants and import firms affected by federal guidelines on the price and distribution of foodstuffs found allies in the bipartisan opposition (the Coalicion), and together they found supporters in Washington...
...Together with the revision of the tax structure in 1941, the expansion in personal inMarlApr 1981 910 NACLA Report come generated by federal war activities brought about an increase in tax revenues from $2.8 million in Fiscal Year 1941 to $19.1 million in FY1946...
...Without the support of his party, both he and the reforms were doomed to failure...
...Sanchez Vilella, in his inaugural speech, insisted on the need to innovate, to reform, to develop a new style and concept of government...
...Many of them identified with the styles and values of what they recognized as the United States, leading them to support the prostatehood movement...
...Faced with the drastic drop in sugar prices and unable to compensate by expanding their planting area, in 1934 these small farmers organized the Asociacion de Colonos in Mayaguez...
...By 1958, of the 579 factories Fomento attracted to the island, 133 had closed...
...By 1930, the wage for most sugar cane workers was less than one dollar per day...
...They would also give a direction to this development...
...authorities against the Nationalist Party exacerbated the patriotic and antiimperialist sentiment in the island...
...Since the cost of living continued to rise, the unions were compelled to mount an independent struggle...
...But the PPD ignored this project...
...Where is this island going to go if the leaders who have taken charge of its destiny do not give battle in order to stop the exodus of that which is ours?31 Groups of small merchants and others unable to compete with the large invaders initially looked to the government for support and protection...
...Thus, after more than 10 years of Bootstrap, and despite its expansive propaganda campaign, a number of serious problems threatened the entire development strategy...
...Ibid., p. 62...
...NACLA ReportMarlApr 1981 S Part of the tobacco manufacturing process was rapidly mechanized, reducing the levels of employment and allowing the corporation to substitute unskilled female workers for skilled male workers...
...capital without being able to resolve or even minimize unemployment...
...The General Electric strike of 1967 represented a watershed in this movement, as workers, supported by proindependence sectors and students, faced off with the corporation and the government and broke with earlier collaborationist policies...
...The PPD made up for the lack of jobs in manufacturing by opening up jobs in the public sector and expanding the public education system...
...San Juan: Escuela de Medicina, Universidad de Puerto Rico, 1973...
...First, it would be contingent on the quota of foreign crude imports which the U.S...
...Thus, the future opposition nurtured itself in the midst of the PPD...
...a history of market price increases favoring agroexporters...
...These firms in general represented intermediate stages in a technological and productive process originating in and controlled by the metropolitan headquarters...
...capital investments, failed to solve the problems it had set out to confront, while mortgaging the future and reducing the real options of the Puerto Rican people--even while the PPD hailed it as an "economic miracle...
...imports began to undercut private manufacturing where small workshops had flourished during the first years of the war...
...Between 1946 and 1950, some 100,000 Puerto Rican workers left the island...
...capitalists were reluctant to invest in Puerto Rico...
...The resultant expansion of the city's reserve labor pool undercut worker strength vis a vis employers...
...Even the workers' union confederation, the Free Federation of Workers (FLT), linked to the Socialist Party, was primarily concerned with maintaining "industrial peace" and cementing a political alliance with the ruling Republicans...
...But the vision was an illusion, produced by the artificially high price of sugar on the international market due to World War I demand...
...Ibid., p. 250...
...Between 1928 and 1933, the export price of sugar declined by more than 33%, that of tobacco by more than 49%.6 While the island's sugar industry survived the fall in prices by further increasing production, the crisis unleashed the growing opposition of its two subordinated classes--the sugar workers and the small farmers, known as colonos...
...financial interests were already heavily invested in the highly competitive Brazilian product...
...Yet there were alternatives...
...The United States, which had become a fervent defender of free trade, created another obstacle...
...sugar corporation on the island paid stock dividends of 115...
...By 1945 there were two different government-level views of economic growth and how to attain it...
...domestic sugar producers forced the government to increase the tariff surcharges on sugar in 1921 and 1922, again protecting Puerto Rico's sugar corporations from foreign competition...
...Toward this end, the PPD proposed the Industrial Incentives Act (IIA), viewing it as an interim measure to expire in 1962...
...U.S...
...Thus Dean Acheson stated at a 1944 congressional hearing: "We have got to see that what the country produces is used and sold under financial arrangements which make its production possible...
...PPD practices rapidly eroded the limited politic-l autonomy of the commonwealth status...
...By the time PL 600 was passed in mid-June 1950, the results of Fomento's three-year-old industrialization program were, at best, mediocre...
...The defeated though increasingly militant and united sugar workers joined with other disaffected labor sectors who formed a new labor federation in 1940, the General Workers' Confederation (CGT...
...Secretary of Agriculture, "the Land Authority's acquisition of land from corporations under the 500-acre limitation has repesented little more than a transfer of land from one big owner to another...
...Huge increases in output, services and income were due almost entirely to expansion of federal government activities connected to the war...
...Firmly consolidated in power, the party faced a new period of struggle...
...Pursuing this plan implied going against the party supporters: it would reduce the number of colonos, establish controls on land use by the large farmers, eliminate the purchasing and hoarding of land for speculative purposes, and undermine the interests of importers, merchants and the banks...
...At the end of the '30s, any of these interpretations seemed plausible...
...The other migrant stream - from Puerto Rico to New York and other U.S...
...These included pro-independence forces which had recently formed the ProIndependence Congress (CPI) and, above all, the CGT...
...Even at harvest time, "steady work" was limited, on the average, to four of every six working days...
...The cost of producing sugar in Puerto Rico, given the depressed value of land and low wage rates, was less than that of its chief rivals, Java, Hawaii, Louisiana, or Cuba...
...More important, the educational system turned out professionals faster than the government could create jobs, with the result that a large number of these petty bourgeois professionals could not find public sector employment, especially outside San Juan...
...INVESTORS TAKE ISLAND SUGAR The island's outmoded and nearly bankrupt sugar industry attracted the bulk of these investments...
...The war, of course, caused hardships, notably the reduction in imports of foodstuffs and other consumer goods...
...The only significant area of growth, besides the public sector and construction, was in commerce...
...military and intelligence expenses on the island during the '60s indicated the growing political and economic importance of the United States...
...At the same time, the federal government penetrated ever more directly into insular affairs, setting up its own programs, providing funds for joint projects and increasing personal transfer payments such as food stamps...
...Those who once produced most of their food, perhaps exchanging a small market surplus for non-food needs, now had to resort to at least occasional wage labor for cash...
...Atlantic coast...
...4. Bailey Diffie and Justine Diffie, 'Porto Rico: A Broken Pledge (New York: Vanguard Press, 1931), p. 88...
...2 " Once before, in 1943, the PPD tried to attract U.S...
...colonial rule had been popularly identified as the main cause of the people's sufferings...
...a bottle factory would be suited to the needs of the local rum industry...
...The industrialization program, Operation Bootstrap, a house of cards supported by huge U.S...
...industrial goods-with which local 2 NACLA ReportMarlApr 1981 3 manufacturing could not hope to compete...
...According to Koening's 1953 plan, by reorganizing and improving production and distribution systems and by adhering to a strict plan of land use, food production could be expected to rise by 192...
...This was subject to federal duty and the revenue returned to the Puerto Rican government...
...And of the four largest corporations, Eastern Sugar, a Rockefeller property, remained practically intact, and Aquirre did not lose any land at all...
...Second, it depended on there being a significant difference between the price of crude oil in the international market and that refined in the United States...
...This conviction was not shared by the PPD, which reduced his planning board to a minor agency in charge of zoning, statistics and proposal formulation...
...sugar corporations as their immediate adversaries, if not enemies...
...Liberty" was the fulcrum of the populist slogan...
...Three factors sweetened the 12 NACLA ReportMarlApr 1981 13 Sixty percent of jobs created by Fomento went to women...
...sugar" colonies, Hawaii and the Philippines.' By 1930, the sugar crop absorbed 44% of the cultivated area, employed almost half of all agricultural laborers and accounted directly for one-third of the total volume of economic activity on the island...
...The needle trades, which employed more than 80,000, also recovered...
...To clinch Puerto Rico's competitive advantage, the new colony was now inside the protective tariff walls secured by U.S...
...Following its inevitable approval in a this-or-nothing referendum, the U.S...
...But when the crisis hit, they could not counter the decline in price with an increase in production...
...capitalism...
...This not only provided exemptions from income, property and municipal taxes, it offered subsidies to new industries in the form of outright cash grants to offset startup costs, real estate facilities, worker training programs and low interest loans...
...cities - siphoned off many who likely did have a trade union consciousness...
...Both landowners and laborers saw the U.S...
...0 The Land Law created the Land Authority, which had wide powers to "take the necessary action in order to end corporate latifundia" and "block their reappearance in the future...
...And with its division, so began the CGT's decline...
...But coffee haciendos were in disarray, and in the urban areas the entrenched commercial interests were too tied to the sugar corporations...
...In their view, the state was a "neutral" instrument, the social institution which could shape the "eternal" conflict between capital and labor for the benefit of the whole society...
...Similarly, they denounced the evil of absentee ownership, with confusingly radical vehemence...
...Agro-export enclaves had given way to far more dynamic and complex industrial-export enclaves integrated into U.S...
...The old guard defended not only their own perogatives in the party, but also those of U.S...
...But the 1921 crisis was a sign of things to come, as the industry would have to depend more and more on tariff protection to survive...
...They pointed out correctly that the wealth produced by the people was drained off by the corporations...
...Nevertheless, the law was welcomed by the country's popular sectors, who saw it as a victory over 8 NACLA ReportMarIApr 1981 9 U.S...
...In terms of employment, the driving goal of the PPD, the increase of 26,000 manufacturing workers in the 1950s could not compensate the loss of 120,000 jobs in agriculture...
...corporations...
...But this increased public expenditures without a corresponding increase in revenues...
...Though armed with this critique, by themselves the colonos could not muster enough power to prevail over the sugar corporations...
...In order to attract such capital, the party had to compensate for costs of locating on the island, particularly transport costs...
...And while bank investments had increased from $4.1 million to $136 million over 1940-45, the bulk of this was also invested in U.S...
...Furthermore, manufacturing wages in Puerto Rico had increased over the 1950s at a more rapid rate than in the United States...
...Teodoro Moscosco, director of Fomento, spelled these out in his 1947 speech to the Fifth Congress of the CGT, outlining a proposal whereby the labor movement could contribute to the development of the industrial plan...
...But the U.S...
...This was because cultivation accounted for 75% of all production costs...
...It thus destroyed nascent manufactures and thriving artisan production on the island, thwarting the possibilities of any significant national industrial development...
...Centro de Estudio de la Realidad Puertorriquena), n.d...
...This combined various methods of struggle, from passive resistance to armed actions against the government and U.S...
...And while the male workforce was most affected by the contraction of farm employment, the new factories tended to employ lower paid women, bringing sectors into the workforce that had previously been marginal...
...Never mind if the country lost skilled workers at the precise moment that it began an industrialization program...
...By 1947, however, the process of economic development had begun to affect land values, increasing the value of the lands the corporations still owned...
...or 3) to allow local capital to follow its own course and "attract" foreign capital...
...But this merely added to a sense of moral sacrifice which supported the PPD program...
...Among the U.S...
...NOW WHERE...
...Since the corporations owned the mills, and since both proportionalprofit farms and colonos thus brought their cane to the corporation mills, the loss of lands to proportional-profit farms was to their advantage...
...His attempt to democratize party structures failed;* the PPD assembly chose Luis Negron Lopez, *Sanchez Vilella left the PPD with a group of followers and, as the candidate of a new Party of the People, ran for governor...
...They demanded greater economic and political autonomy for the island...
...Theoretically, these new industries would generate yet other industrial activities through their demand for inputs, machinery and services, or by their capacity to provide inputs required by other industries...
...The emerging urban petty bourgeoisie concentrated in government programs, however, had compatible interests: the colonos regarded government as the only instrument of power which could impose controls over the corporations, and the petty bourgeois intellectuals were searching for a power base and a social class to serve...
...The decade had registered the emergence of a militant nationalism and U.S...
...5 INTERNATIONAL COLLAPSE UNLEASHES OPPOSITION Then in 1929 the international crisis of overproduction climaxed in a complete collapse of the world market...
...Given the shortage of local capital for investment in productive activities, the PPD had three options: 1) to directly expropriate private capital and invest in a state-financed industrialization program...
...In 1934, the sugar workers, in protest against working conditions and an FLTnegotiated contract for wages even lower than the previous season, called an independent strike...
...The PPD emerged as a populist alliance forged on the back of hitherto subordinated rural social classes contesting for political power, nurtured by the insurgent critique of colonial rule advanced by radicalized intellectuals...
...And unionization began to spread from the most stagnant economic sectors--such as 19NACLA Report agriculture-to the most dynamic sectors, where the organizing drive was opposed by the multinational corporations and the local government...
...U.S...
...tariff wall weakened the hacendados' position in their export markets...
...Paralleling sugar's meteoric growth under the stimulus of U.S...
...interests from the competition of rival nations in the Puerto Rican market...
...but he only heightened the opposition of those who profited from the existing arrangements...
...21 Moreover, Fomento's program did not encourage any local capital to invest in industry, despite the fact that a large amount of liquid capital had accumulated on the island...
...Senate, Committee on Territories andInsular Affairs, Hearings on S.227, 79th Congress, 1st Sess., March-May 1945, p. 386...
...armed forces during World War II...
...The PNP, only two years old, won the 1968 elections, drawing to a close the period of PPD hegemony...
...In addition to support, he encouraged the workers to accept and share "the risks and limits inherent in this stage of development...
...In addition, the fact that the numbers of sugar producing colonos was increasing added to the steady supply of cane...
...The party chose the third, closing its options by rejecting independence...
...The coup de grace for many coffee growers came with World War I and the disruption of their remaining European markets...
...In Munoz' words: "The best economic position for a small country is to have free access for its products in the largest, most powerful market in the world...
...For this reason the Land Authority also stopped expropriating estates over 500 acres...
...exports, it was illusory to think that it would give up that market without a fight...
...Twenty-one new corporations employing 2,336 workers had set up shop in Puerto Rico, including Textron, whose factory had cost Fomento $4 million...
...and resolve labor disputes on the basis of established procedures, "avoiding all potential interruptions to production...
...At the time of the U.S...
...These voices were getting louder (and the PPD more attentive) as foreign capital became a possible prize...
...Other than the slight increase in employment, these industries have little ability to promote complementary economic activities...
...This growing strata began to see that their opportunity for permanent jobs would come only with a change in the party in government...
...It represented the bulk of organized workers and had become independently politically conscious...
...To this alliance of small farmers and urban petty bourgeois intellectuals was joined a third group, comprising both owners and laborers from the devastated coffee sector...
...2 A fixed percentage of the net profits from the operation went to the administrator...
...While increasing profits, mechanization and centralization also leveled off the demand for labor...
...metropolitan market...
...invasion, the coffee hacendados were enjoying a healthy export market in Cuba and Europe...
...Some of the most important struggles were led by the Pro-Independence Movement (MPI) and the Federation of Pro-Independence University Students (FUPI...
...By 1968 the investment of $344 million had generated about 3,000 jobs...
...So too was that of the commercial and financial sectors, who had managed a notable climb up the rungs of the party's leadership...
...Major General Nelson A. Miles, Commander-in-Chief of the United States military forces that invaded the island in 1898, gave a message to the people of Puerto Rico, declaring "[We] come bearing the banner of freedom...
...The initial investment, so the scenario went, would be on refineries, but the success of the program would be counted in the number of satellite industries attracted by low-cost energy sources, or set up to produce petrol-based industrial byproducts...
...And as far as outright emigration was concerned, the PPD saw unemployment as the country's major problem...
...Concurently, U.S...
...9 During the first session of the legislature in 1941, the PPD put through a minimum wage board, worker-protection laws, higher teacher and police salaries, the new Water Resources Authority and an agency to provide electricity to the rural areas...
...It came to a head in 1965...
...2 8 Among the emigrants interviewed in a 1950 New York City census, 47% had been employed in manufacturing in Puerto Rico, 18% were skilled workers and only 5% had been engaged in farming...
...Concentrated in the coffee area of the mountains, they depended on the landowner for a place to live, raise a garden and keep some animals...
...jibaros who whould soon become a distinctive emblem of a quarter century of Puerto Rican politics...
...The PPD did nothing to block the emigrant stream...
...Their brand of nationalism, laden with romantic references to "their" past, "their" land, "their" people and "their" liberty never soared higher than "their" sugar cane...
...capital to exploit the island's untouched copper deposits on the condition that copper must be refined in Puerto Rico...
...Finally, with the suspension of Puerto Rico's sugar quotas, employment in that sector also recovered some stability...
...Nathan Koening, A Comprehensive Agricultural Program for Puerto Rico (Washington, D.C.: United States Department of Agriculture, Government Printing Office, 1953), p. 252...
...But as soon as an alternative approach appeared, the PPD easily changed directions.25 Above all, industrialization was seen as a way to ease the PPD's continuing unemployment nightmare...
...Barely one-third of the land under cultivation was used for the production of foodstuffs, almost all in less fertile mountainous regions or on dry coastal lands...
...Concurrently, the Nationalist Party had taken its campaign to the recently formed United Nations, discomfiting the United States...
...Congress would assign to Puerto Rico...
...and a narrow industrialization policy that neglected the development of agriculture for use as industrial raw material...
...Ibid., p.222...
...Munoz' notions were much more vague...
...Value added rose 243%, surpassing $1 billion for the first time...
...An essentially political document, the Land Law addressed just one issue, that of land ownership as the base of economic and political power...
...That year the largest U.S...
...The farce was denounced by all independence forces, prompting a revolt organized by the Nationalist Party...
...At the same time he accused the CPI of being the nucleus of a new political party, forcing members to belong either to the CPI or the PPD...
...2. Esteban A. Bird, Report of the Sugar Industry in Relation to the Social and Economic System of Puerto Rico (Senate of Puerto Rico, January 23, 1937), p. 24...
...The CGT had grown rapidly over the course of the decade, in numbers as well as militancy...
...The plan even contemplated the production of agricultural materials for industrial use...
...By 1947, Jesus T. Pinero had succeeded Tugwell and approved the bill's passage...
...Thus, the large colonos and the island's landed oligarchy were spared, and stood to be the main beneficiaries of the law...
...By no longer taking the land, the government permitted them to begin to pull land out of agricultural production in hopes of better returns in a new game of real estate speculation...
...If it began in that manner, it was only forced to do so by temporary circumstances such as the private sector's lack of interest...
...In a 1934 report to Roosevelt he recommended the government: 1) socialize the sugar industry along the lines of a Soviet collective farm, possibly through a government corporation...
...In order to survive as a viable political formation it had to consolidate gains and increase its political power...
...Eliezer Curet-Cuevas, El desarrollo economico de Puerto Rico: 1940s a 1972 (San Juan: Management Aid Center, 1976), p. 96...
...Miguel Guerra-Mondragon, "The Legal Background of Agrarian Reform in Puerto Rico," in Caribbean Commission, Caribbean Land Tenure Symposium (Washington, D.C., 1946), p. 178...
...military installations, were also accepted with general good will...
...imports came into serious contradiction with a growing labor force swelled by the ranks of expropriated peasantry and small farmers...
...2 6 Underlying these policies was an attempt to secure political stability - the basic condition for U.S...
...Yet industry grew only moderately...
...But while Negron Lopez might have controlled party delegates, he could not arouse the enthusiasm of the voters, particularly in the metropolitan areas...
...Given the high unemployment on the island, the power of the sugar corporations over their workers was formidable...
...In 1954, under pressure by the banks, merchants and U.S...
...We come] not to make war upon the people of a country that for centuries has been oppressed, but to bring you protection...
...INDUSTRIALIZATION: A CLOSER LOOK Even without sovereignty, however, the PPD, as the governing party, had resources and powers which it either didn't use or used for other ends...
...investors consolidated their control, sugar production grew by 908%, compared to 245% and 120% for the two other U.S...
...In fact this forced a production cut on the island from 1.1 million short tons in 1934 to 870,000 million short tons by 1935...
...In fact, Puerto Rico had very little to export in the postwar period...
...Because of the small size of the plots, most smallholders went to work for large sugar farmers--a "choice" made easier by their resettlement right next to these farms...
...pot: 1) cheap and abundant labor, 2) exemption from taxes, and 3) a government pledge to pick up the costs of development of the productive infrastructure...
...In 1950, eight years after the Land Law 16MarlApr 1981 went into effect, the pattern of land ownership in the country had not been significantly altered...
...At the same time, the jibaros brought with them radically different experiences and conceptions of struggle that could not be easily integrated with the urban workers' political practice...
...Worse still, even with a high rate of growth in the export sectors, the economy was unable to absorb the workforce...
...In a letter to Eleanor Roosevelt in 1933, Luis Munoz Marin profiled this emerging petty bourgeoisie in the following terms: There is in Puerto Rico a generation coming to power in all political parties . . . that has been educated in the United States...
...They needed allies...
...Robert Sanchez Vilella, "La transformacion de la orientacion hacia el desarrollo del PPD en la decada del 1940: Sus implicaciones para el presente y futuro de la sociedad puertorriquena," in G. Navas, ed...
Vol. 15 • March 1981 • No. 2
