Mr. ABBOTT. I say this, and not frivolously: One gentleman suggested, since you want a date fixed on an elective governor, that it be set on the hundredth anniversary of the acquisition of the islands from Denmark. I take it that is not what you have in mind.

Mr. HILL. Exactly not. Because as far as the people are concerned, we feel that at the present time we are able to take over that responsibility. Nevertheless, we feel that as responsible Members of Congress you would probably have some caution; therefore, within a reasonable time.

Mr. O'BRIEN. Perhaps the 40th anniversary?

Mr. HILL. Which would not be long from now.

Mr. TAYLOR. Before the meeting closes I would like to make a short statement.

This morning I had the pleasure and a very rare opportunity to speak at an assembly of the Charlotte Amalie High School. I talked to the youngsters for about an hour. They asked me questions for about 40 minutes, not only on this committee but on Congress in general. I do not know how many groups of one sort or another I have spoken to over the past 25 years or more, but I do not think that I ever had a more appreciative audience, a more ladylike and gentlemanlike group, in all that time than I had today. They asked some very fine questions.

I think it was a very fine tribute to them, to their families, and the people of the Virgin Islands.

I want to let it be known that I really appreciated the opportunity of speaking to that group, and I want to thank Mr. Scott and Miss Gabriel for inviting me to be present with them. You people of St. Thomas certainly have a fine group of high-school youngsters and I am sure you are justly proud of them.

Mr. AMBROSE. Mr. Chairman, do I understand we may submit documents within 15 days to the committee?

Mr. O'BRIEN. Yes.

Mr. AMBROSE. I want to submit the document I used, together with some attachments.

Mr. O'BRIEN. That may be done by anyone interested as long as it is pertinent material.

(Subsequently the Democratic Insular Committee submitted the following recommendations for considerations :)

Section 11. Executive branch Governor.-We favor the election of a Governor by the people of the Virgin Islands, with all the provisions necessary in this connection. Some provision should be made for greater authority in some officer in St. Croix by a Lieutenant Governor or establishment again of the office of the Administrator. St. Croix members of the Democratic organization will elaborate on this matter. In connection with the executive branch, provision should be made for a realistic treatment of the Office of the Government Secretary as the secretary of state and custodian of the seal with the other corresponding duties. We favor a Resident Commissioner or Delegate with the Congress from the Virgin Islands, as set forth in S. 2321, S. 2322, S. 2323, 1st session of the 83d Congress. The method by which chosen can be explored in accord with Territorial practices in relation to the Federal Government.

Mr. ABBOTT. And those should be submitted, care of the chairman of the House Interior and Insular Affairs Committee, 1324 New House Office Building, Washington, D. C. From the amount of mail we get with much more sketchy addresses, I am sure it will arrive with something less than that.

Mr. O'BRIEN. I think that we have reached the time

Mr. CLAUNCH. Mr. Chairman, may I have an opportunity to introduce into the record a summary of the Governor's veto messages? Mr. ABBOTT. I believe that was requested yesterday.

Mr. O'BRIEN. That will be taken care of. It will be placed in the record.

VETOED BILLS AND GISTS OF DISAPPROVAL

Bill No. 180, to provide for the expansion of the Knud-Hansen Hospital; May 15, 1956.

Gist. Not sufficient money available to permit expenditure.

Bill No. 181, to provide for the teaching of Spanish in the junior and senior high schools of the Virgin Islands; May 15, 1956.

Gist.-Power to adopt curricula and courses rests with the school board. Bill No. 188, to provide protection for female employees in the Virgin Islands; June 4, 1956.

Gist.-Usurps the prerogatives of labor unions.

Bill No. 198, to provide for the retirement of the officials and employees of the government of the Virgin Islands and its related agencies; July 5, 1956.

Gist.-Numerous omissions of provisions necessary to efficient retirement plan. One glaring omission is the failure to mention any provision for the employer's contribution to the proposed fund.

Bill No. 200, to provide annual leave with pay to wage earners in private enterprises in the Virgin Islands, and for other purposes; June 26, 1956.

Gist. Usurps the prerogatives of labor unions and the practice of collective bargaining.

Bill No. 206, to authorize the Governor of the Virgin Islands to sell to Mr. Carlos McGregor a plot of land matriculated as No. 2 old hospital ground, company quarter, Christiansted, St. Croix, V. I.; May 14, 1956.

Gist.-Bill states that property "cannot be of value to a separate owner" except Mr. McGregor. Government has on file five requests to purchase, and recommends sale at public auction.

Bill No. 209, to amend Act No. 9, approved March 28, 1955, "To authorize a special scholarship for students from the island of St. John attending classes at the Charlotte Amalie High School in St. Thomas, V. I."; May 29, 1956.

Gist.-Improper wording. Further, there is no handicap in wording of Act No. 9 to deserving students from St. John attending Charlotte Amalie High School.

Bill No. 222, to authorize the construction of improvements at the Manning's Bay racetrack in St. Croix, V. I., and for other purposes; June 1, 1956.

Gist.-Nonessential project.

Bill No. 232, to authorize certain improvements in approved FHA home subdivisions in the Virgin Islands, and for other purposes; June 28, 1956.

Gist.-Would obligate the government of the Virgin Islands and future legislatures to subsidize private industry.

Bill No. 257, to establish a new design of the flag of the Virgin Islands of the United States, and for other purposes; June 4, 1956.

Gist.-Would violate United States Code, title 36, section 176 (g).

Bill No. 277, to amend law to standardize leave of absence of employees of the government of the Virgin Islands of the United States, approved December 9, 1938; June 27, 1956.

Gist.-Amount of leave proposed is far in excess of that which Congress has recommended.

Bill No. 280, Judiciary; June 26, 1956.

Gist. Should await the revision of juridical procedure now in process and the promulgation of the new rules of court.

Bill No. 297, to fix the expenses of the bureau of tourism, office of the Governor, for the fiscal year July 1, 1956, to June 30, 1957, and for other purposes; June 20, 1956.

Gist.-Violates provisions of section 16 (b) of the Revised Organic Act of the Virgin Islands, July 22, 1954.

Bill No. 305, to continue an official lottery to be known as the Virgin Islands lottery; to provide funds for hospitalization, sanitation, education, poor relief; and for other purposes; July 3, 1956.

Gist.-Attempts to reorganize the executive branch of the government of the Virgin Islands.

Bill No. 311, to fix the regular expenses of the department of public safety for the period July 1, 1956, to Decmber 31, 1956, and for other purposes; June 14, 1956. Gist.-Appropriates funds for the department of public safety for a period of 6 months only.

Bill No. 314, to fix the regular expenses of the department of agriculture and labor for the period July 1, 1956, to December 31, 1956, and for other purposes; June 14, 1956.

Gist.-Appropriates funds for the department of agriculture and labor for a period of 6 months only.

Bill No. 348, to enact the Virgin Islands Code, and for other purposes; October 11, 1956.

Gist.-Contains distinct violations of the revised organic act and of Federal statutes.

Mr. O'BRIEN. We are about to terminate our final public hearing in St. Thomas. I just want to repeat what I said at the start of this hearing. The witnesses have been most cooperative, and the committee will return to Washington much better informed than when we arrived. We hope that if we cannot give you all you ask, that we can give you a great deal.

(Whereupon, at 1: 15 p. m., the subcommittee adjourned.)

(Subsequently Mr. W. H. D. Cox, of the Cox & Bornn law firm, submitted the following letter for consideration :)

Hon. LEO O'BRIEN,

Cox & BORNN,

St. Thomas, V. I., December 11, 1956.

Chairman, Territorial Subcommittee, Committee on Interior and Insular Affairs, House of Representatives, Washington, D. C.

GENTLEMEN: May I first compliment you upon the intelligent and constructive way in which your committee conducted the hearings in the Virgin Islands. Much information was brought out by the hearings, and I for one, feel that I have a much better understanding of the situation on these islands than I had before. I want to avail myself of the opportunity which you granted to residents of the Virgin Islands to make a written statement to your committee, to be considered by your committee in drafting any legislation to amend the Revised Organic Act. A point that has been made repeatedly to the people of the Virgin Islands by the Federal Government is that it is their duty to become economically selfsupporting before they are permitted to elect their own Governor and have greater self-government.

In my opinion, it is more important for these islands to become economically strong than it is for them to elect their own Governor. And I feel that to permit them to elect their own Governor at this time would delay by a period of years the day when these islands will become self-supporting.

As the members of your committee probably noticed, the local legislature is more interested in obtaining greater power for itself than it is in a constructiveeconomical program. There was little evidence on the part of the legislature that they have any overall plan by which these islands can become economically independent of financial assistance from the Federal Government.

I would like to state my views as to the tax exemption and subsidy plan which they have started in these islands, and the way that it is working out in practice. Before going into this, howoever, I would like to point out that in addition to raising funds on these islands which would be sufficient to operate the government, it is also necessary to raise funds to bring the islands more nearly up to date.

The roadway system on the islands is inadequate and is poorly maintained. The open gutters become filled with debris and are disease breeders. Although

a sewer system passes many buildings, they have not been equipped with toilet facilities, with the result that there is still night-soil collection on the islands. I could go on and mention many more antiquated systems on the islands, about which the local government is doing nothing.

To become economically self-sufficient will require money. The program of the government here should be a realistic one, to obtain money, rather than one giving tax exemptions and subsidies, thereby losing large sums which it otherwise would have to use in the improvement of the islands.

As was stated by your committee, the Organic Act is in effect the constitution of the Virgin Islands. For that reason, the same care should be exercised in drawing any legislation permitting the legislature to grant tax exemptions or tax subsidies, as would be used by the people of any State in writing such a program into their constitution.

Where tax exemptions are permitted by a State constitution, certain legal problems follow. See American Jurisprudence volume 51, paragraph 495, page 502, for a discussion of the effect of such a provision in a State constitution.

While many restrictions on the program were written into the bill presented to Congress last year, I do not feel that the bill goes far enough in limiting those to whom tax exemptions or tax subsidies can be granted. Nowhere in that bill is there any requirement which would make it necessary for a person or corporation, in order to obtain tax exemption or tax subsidy payments, to show that its operation would be of such great public benefit as to outweigh the benefit derived by the corporation or individual from such a program.

To give a concrete example, there have been several investment trusts set up on the islands which have applied for tax exemptions and tax subsidies under the local laws passed by the legislature. Some of these have invested in large tracts of real estate which they are selling to the public. To quote figures, these tracts comprise several thousand acres, having been purchased at the rate of about $500 per acre. Roadways have been put in, but no improvements other than clearing some of the land have been made. Building sites on these properties are being offered to the public at the rate of about $4,000 per acre. These investment trusts employ no local people, and it is hard to see what great benefit they are to the islands as a whole.

A simple mathematical calculation would indicate that if they spent another $500 per acre in improvements (which figure would be high), the land would cost them $1 million for each 1,000 acres, and sale of the land, even if they averaged only $3,000 per acre, would return to them $3 million for each $1 million invested. This would be a profit of $2 million on each 1,000 acres sold.

Certainly the tax on this $2 million profit would be of great value to these islands, and yet my reading of the bill proposed to Congress by the Department of the Interior and the Treasury Department would permit tax exemptions to be given upon the sale of real estate in the Virgin Islands.

A further examination of the local laws passed gives the right to apply for tax exemption to any person or corporation which has a demonstrable investment of $10,000 in any new business. Again, it is hard to see how an operation of that size could possibly be of great benefit to the islands.

· I feel that the whole tax-exemption structure set up by the legislature should be examined with the question in mind as to whether or not the provisions of the local law will result in any great benefits to these islands, and that any law passed by Congress authorizing a tax exemption or tax subsidy program in these islands should be more specific in its restrictions, to make sure that the public gains substantially from the business which is applying for such tax exemptions.

In conclusion, I would like to point out one additional fact which in my opinion was not brought out at the hearings. There is a shift of winter vacationers coming to the Caribbean area. The next 10 years are going to be critical years on these islands. If the islands do not establish themselves as a major winter resort in that period of time, they will lose a substantial opportunity to gain revenue which would make them economically self-supporting.

When one speaks of Florida today, people immediately think of Miami. That city, through its efforts, has drawn to itself the greatest number of people going to Florida for a winter vacation. Just so, certain Caribbean areas must become well known, if they are to attract and sell themselves to the winter vacationers. And this must be done within the next few years, for the Caribbean area is building up as a winter resort area.

If the Virgin Islands accomplishes its fair share of progress during the next 10 years, it will go a long way toward becoming economically self-sufficient. If it lets the opportunities slip through its fingers, it will not become economically self-sufficient in that period of time.

Much was said to indicate the thinking, both in the islands and in the United States, that these islands are a colony or a territory. While that is technically

true, there is no reason why the thinking should not be oriented to the position that we are an integrated part of the continental United States.

Each year many more people from the continental United States buy land and build residences on these islands. They, like myself, have lived for years in the continental United States and desire to see the Virgin Islands become an American community in fact as well as in name.

It is less important that we elect our own government than that the government which we have is intelligent and efficient.

I wish to thank you for this opportunity to put my thoughts before you.

Sincerely yours,

WILLIAM H. D. Cox.