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TREASURY DEPARTMENT, UNITED STATES

Bureau of Internal Revenue, Alcohol Tax Unit Office, Federal Building, San
Juan; telephone S. J. 1087. Carlos M. Aguiar, inspector in charge.
Bureau of Internal Revenue, Office of Field Deputy Collector, Federal Building,
San Juan; telephone S. J. 1764.

Bureau of Internal Revenue, Office of Stamp Deputy Collector, Federal Building,
San Juan; telephone S. J. 1567. Jesús Palés Díaz, stamp deputy collector.
Collector of Customs, Customhouse, La Marina, San Juan; telephone S. J. 1410.
Jean S. Whittemore, collector of customs.

Coast Guard, United States, San Juan; telephone S. J. 2253 (now Tenth Naval District). Capt. John Vaylis, district Coast Guard officer.

Procurement Division, Stop 8, Puerto Rico Reconstruction Administration, Puerta de Tierra; telephone S. J. 2580. Lynn R. Rutter, procurement officer. Disbursing Office, Federal Building 210, San Juan; telephone S. J. 2191. H. G. Hough, assistant disbursing officer in charge.

UNITED STATES CIVIL SERVICE COMMISSION

Federal Building, San Juan; telephone S. J. 24. Charles E. Wager, special representative.

UNITED STATES EMPLOYEES' COMPENSATION COMMISSION

Stop 8, Puerto Rico Reconstruction Administrarion, Puerta de Tierra; telephone S. J. 712. Clarence M. Whipple, deputy commissioner.

UNITED STATES VETERANS' ADMINISTRATION

Federal Building, San Juan; telephone S. J. 1981. John S. Powell, insular attorney.

WAR AGENCIES

Office of Defense Transportation, Stop 8, Puerto Rico Reconstruction Administration, Puerta de Tierra; telephone S. J. 2490. C. G. Anthony, regional director.

Office of Price Administration, Stop 8, Puerto Rico Reconstruction Administration, Puerta de Tierra; telephone S. J. 2490. James P. Davis, acting director. War Production Board, Stop 8, Puerto Rico Reconstruction Administration, Puerta de Tierra; telephone S. J. 2490. Gordon Foote, executive director.

WAR DEPARTMENT

Antilles Department, Post of San Juan; telephone S. J. 2412. Maj. Gen. H. C. Pratt, commanding general.

District Engineer, United States, Fernández Juncos, Stop 8; telephone S. J. 2420. Lt. Col. W. J. Truss, district engineer.

WAR SHIPPING ADMINISTRATION

Federal Building, San Juan; telephone S. J. 1209. Walter L. Cope, representative.

WORK PROJECTS ADMINISTRATION

Stop 8, Puerto Rico Reconstruction Administration, Puerta de Tierra; telephone S. J. 2370. Roy Schroder, administrator.

[EDITOR'S NOTE.-The budget information referred to on pages 263 and 264 of the testimony of Gov. R. G. Tugwell is not included in this appendix for the reason that at best it could only be considered of passing interest to the committee in ascertaining the manner in which the current budget was being formulated.]

EXHIBIT No. 23

The statistical information regarding elections, referred to on page 265, is as follows:

Statistics of elections held in Puerto Rico Nov. 5, 1940

Potential voting population in Puerto Rico (1940 census).

Total number of registered electors..

858, 186

Total votes for parties..

714, 960

Percent total votes for parties to potential voting population.

Percent total number of registered electors to potential voting population___

568, 851

83. 31

66. 28

Percent total votes for parties to total number of registered electors___

79.56

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The names and official positions of the members of the Executive Council of Puerto Rico as of June 3, 1943, asked for on page 268, are shown in exhibit 22.

EXHIBIT NO. 25

The statistical data indicating the fiscal relationships between the United States and Puerto Rico referred to in the testimony of Governor Tugwell on page 270 is as follows:

Hon. FRED L. Crawford,

LA FORTALEZA,
San Juan, P. R., May 3, 1943.

House of Representatives, Washington, D. C. MY DEAR MR. CRAWFORD: In the belief that you and others might be interested, I am enclosing a summary of existing factual material dealing with the present fiscal relationship between the United States as a whole and Puerto Rico. I believe it indicates the practical limits within which the future fiscal balance can be manipulated. You will note that any change in the island's present status according to these figures would reduce Puerto Rico's income from approximately $90,000,000 a year as an "independent" country to $30,000,000 as a State. figures were gathered and the report prepared by the regional director of the National Resources Planning Board. It is not meant to indicate any preference for one status as against any other-merely to set out the facts involved in each.

Sincerely yours,

The

R. G. TUGWELL, Governor.

OUTLINE OF FISCAL FACTS IN THE RELATIONSHIP BETWEEN THE UNITED STATES AND PUERTO RICO

In spite of the years of discussion which have taken place both in the United States and Puerto Rico regarding the present and future status of Puerto Rico, there are unfortunately few facts upon which to base objective decisions. Such data as do exist have been summarized in this outline. In presenting these facts, only two different types of status are assumed—independence (A) and statehood (B). Independence (A) is defined as a position vis-à-vis the world and the United States similar to that of the Dominican Republic; statehood data (B) are based on figures for Alabama, Mississippi, and Georgia. Anyone can modify the final result by simply assuming different types of limited "independence" or by special conditions for admittance to statehood, but the final fiscal result from Puerto Rico's point of view will inevitably fall somewhere between A and B. For presumably the island could not under any form of limited "independence" hope to better its present position in relation to the United States; nor as a State could it expect to be admitted on more favorable terms than other States. A. If Puerto Rico were independent under the same conditions as those enjoyed by the Dominican Republic:

Puerto Rico would lose the benefit of direct Federal expendi-
tures or grants-in-aid. Even excluding all Army, Navy,
post office, customs, and similar expenditures, these
amounted in 1942 to..

Puerto Rico would lose the United States excise revenues
collected on Puerto Rican rum sold in the States and now
returned to it. These amounted in 1942 to..

$49, 501, 000

13, 940, 000

These definite losses would total..........

63, 441, 000

Puerto Rico would lose by having to sell its sugar, pineap-
ples, cotton, tobacco, rum, etc., in the world market___

45, 400, 000

and

Would gain by being able to buy its rice, beans, textiles, and
other imports in the cheaper world markets...

These last 2 figures are based on average prices and
quantities between 1927-36. They would be affected
by recent reciprocal trade agreements.
Puerto Rico might gain from buying such services as ship-
ping, commissions, loans, and insurance in the world mar-
keti

These indefinite gains and losses give a net loss of---

And the total definite and indefinite net losses become..
B. If Puerto Rico were a State paying the same per capita Federal
taxes and receiving the same per capita Federal expenditures
as the three southern, agricultural States of Alabama, Georgia,
and Mississippi:

Puerto Rico would lose the United States excise revenues on
its rum sold in the States as indicated above....
Puerto Rico would gain $1.39 more per person in Federal ex-
penditures on 1942 basis (excluding Army, Navy, post
office, customs, and other similar items) or.
Puerto Rico would have to pay Federal taxes and lose
thereby (on 1941 basis).

Puerto Rico would lose the United States Custom taxes col-
lected on foreign imports into Puerto Rico and now re-
turned to the insular treasury. These amounted in 1942

to..

The definite net loss would total....

6, 200, 000

8, 500, 000

30, 700, 000

94, 141, 000

$13, 940, 000

2, 616, 000

21, 692, 000

2,085, 000

35, 101, 000

These were estimated by Brookings Institution in 1928 at $19,000,000. It has been assumed that Puerto Rico could save 25 percent on shipping charges, 50 percent on commissions, 50 percent on interest payments, and 50 percent on premiums by securing these services outside the United States. No figures are available to support these assumptions, but the total amount is in any case relatively small.

If Puerto Rico were a State it would not be able to control for its own par ticular advantage, except insofar as any single State is able to do so, the following factors which affect its internal economy: Tariff; shipping rates and regulations; wage and labor regulations; agricultural conservation and sugar programs; interest and dividend payments; commissions, premiums, and similar charges.

These facts with their sources are described in more detail in the attached statement entitled: "Preliminary summary of possible gains and losses to Puerto Rico under two different statuses."

Preliminary summary of possible gains and losses to Puerto Rico under two different

statuses
Gain

I. If Puerto Rico were independent as the Dominican Republic:

1. Definite:

(a) Grants-in-aid and direct Federal expenditures for local benefit.
(b) Agricultural conservation program and sugar programs.
(c) Value of commodities distributed..

(d) Rivers, harbor, and flood control works.

(e) Veterans' Administration.

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3. Loans:

Net loss on indefinite items.

(m) Federal loans, farm credit, etc., net possible loss..

Grand total net possible loss..

II. If Puerto Rico were a State similar to Georgia, Alabama, and Miss-
issippi:

1. Items affected:
(n) United States internal revenue taxes not returned.
(0) Present Federal expenditures.

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(p) Federal expenditures increased to same per capita
amount as in Georgia, Alabama, and Mississippi.. $45, 591, 000

(9) Present tax payments to Federal Government.
(r) Tax payment to Federal Government based on same
per capita amount as in Georgia, Alabama, and
Mississippi..

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14,700,000

30, 700,000

6, 560,000

100, 701,000

21, 692, 000

45, 591,000 78,607,000

33,016,000

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(g) and (h)..

(i), (j), (k), (1).

1934.

(k).

Source

Average 1927-36. Dudley Smith, La Tarifa, in Revista Economica, Puerto Rico
Chamber of Commerce, June 1938.

1941..

Mr. Smith indicates that the average annual advantage to Puerto Rico in selling its products in the highly protected market of the United States for the period 1927-36 was $45,000,000 and its average loss from not being able to buy its imports in world markets was $6,200,000. The net advantage to Puerto Rico, therefore as calculated by Smith was $39,200,000. Smith in figuring imports from the United States to Puerto Rico used comparative import cost figures for Haiti, Dominican Republic, and Cuba; but in figuring exports from Puerto Rico to the United States he assumed, except for sugar apparently, that the world price would have been the United States, domestic price less the tariff. At least in part, therefore, Smith's study seems to be based on a better technique than the only other one apparently available. 1 Based on Brookings Study fiscal year 1928, from De Golia (p. 23). Reductions indicate how Puerto Rico might reduce payments to outside world for these services if it could buy and borrow, in cheapest world markets-whether goods. capital, or shipping services. These reductions are not based on estimates-they are simply assumptions, which much more study is required to convert to reasonable valuations.

Note Gayer. Sugar Economy of Puerto Rico: "Payments of
dividends and interest in 1927-28, if these figures are accu-
rate, were perhaps some $3,000,000 on account of absentee
sugar investments, and some $2,000,000 on account of
absentee investments in Puerto Rican government secur-
ities.' (p. 51.)

Or only from $22.99 (per capita for Puerto Rico) to $24.38 (per
capita amount for Georgia, Alabama, and Mississippi)
only Federal expenditures listed in table 102 of report
cited in (a) above are included in both "gain" and "loss"
columns. Items c, d, and e are, therefore, omitted in II.
Including social security employment taxes. Based on 1911
per capita internal tax revenues paid in Alabama, Georgia,
and Mississippi of $11 in comparison with United States
per capita of $55 or, one-fifth of total per capita tax revenue,
(i) total United States tax revenue for 1911 was $7,818,355,000
(ii) and per capita consequently $58, of which one-fifth=
$11.60. (i) 1911 Annual Report of the Secretary of the
Treasury, table 65; (ii) Bureau of Census, Financing Fed-
eral, State, and Local Governments, 1941, p. 22.
Not affected-because States with interests similar to Puerto
Rico's have not to date been able to change these instru-
mentalities from their present forms (which were adopted
by a majority of the Congress) and it is improbable that
Puerto Rico would be able to alter the situation with the
relatively few additional votes it would bring to the Con-
gress.

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(7).

(8) through (1)..

Mr. Darwin DeGolia in Problemas Tarifarios, p. 43, a study prepared for the Puerto Rico Reconstruction Administration for the one year 1933-1934, estimated that the gain to Puerto Rico from exporting the United States was $49,000,000 due to the tariff of the United States and its loss from not being able to import from world markets was $23,000,000. The great weakness of these figures is that they assume that the entire United States tariff on each item entering into Puerto Rico-United States trade multiplied by the amount of exports to the United States or imports for the United States in 1934 constitutes the total gain or loss to Puerto Rico over selling or buying the same item in the world market. This, of course, is not correct as world prices are determined by world supply and demand conditions and not by the United States tariff.

EXHIBIT A. Total and per capita comparison of direct Federal expenditures and Federal grants-in-aid in and for all States and Territories together in and for Puerto Rico, fiscal years 1941 and 1942 separately

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