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Senator HICKEY. Do you have a brother by the name of Dante de Castro?

Mr. DE CASTRO. Dante de Castro is not related to me, sir. I have had that problem. Dante de Castro is an assistant cashier of the West Indies Bank. And when people came to me and thought he was my brother I had to point out that Dante de Castro is of a de Castro family in the British Virgin Islands.

Senator HICKEY. I met him while I was there.

Mr. DE CASTRO. He is a fine fellow. He is a fine person. He was my assistant in the bank for many years.

Senator HICKEY. Thank you. Senator CARROLL. Mr. de Castro, are you a civil servant now? Mr. DE CASTRO. I am a retired Federal civil service employee. I am retired. When I became Governor I retained my civil service status which I had had for 30 years before.

Then I left the service as a retired Federal civil service employee. I returned to the service of the local government in 1959 at the request of Governor Merwin.

Senator CarroLL. Where did you put in that service? In the Virgin Islands? Mr. DE CASTRO. All my service has been in the Virgin Islands.

Senator CARROLL. So you have watched this territory grow then for 30 years? Mr. DE CASTRO. I have been a part of this growth for 38 years. Senator CARROLL. 38 years? Mr. DE CASTRO. Yes, sir.

Senator CARROLL. As you look at the medical situation with reference to these low-income families, can you see real improvement?

Mr. DE CASTRO. Tremendous improvement, sir.

Senator CARROLL. What is the mortality rate of the people in this low-income group? What is their life span? That is the better word.

How old do these people live to? Do they live a long time, or a short time? Is their life difficult ?

Mr. DE CASTRO. No, sir. Generally I would say they live a long time.

Senator CARROLL. How long is long? What do you mean by that? We have a life span in this country of about 69. How long do they live, these people? Mr. DE CASTRO. I would say about the same, 69, 70, 72, 75, 80.

Senator CARROLL. What about the mortality rate in childhood? Do you see any difference? Mr. DE CASTRO. Difference in what?

Senator CARROLL. In the death rate of the children of these low income groups.

Mr. DE CASTRO. The infant mortality rate has been greatly reduced in the past years by much better health measures and free medical examinations and there has been hospital improvement in the island; yes, sir.

Senator CARROLL. Do you have clinics for these people to come to?

Mr. DE CASTRO. Yes, sir. We have hospitals in all the islands. We have prenatal clinics. We have dental clinics. We have everything you have here in hospitalization and health of any modern American country, except there the government runs it because we have no private hospitals.

Senator CARROLL. But you pay the costs from your own local taxes as I understand it?

Mr. DE CASTRO. And those who can afford to pay it pay the fees of the hospital; yes, sir.

Senator CARROLL. That is very important. Thank you. You have adequate doctors and nurses?

Mr. DE CASTRO. Adequate, sir; yes, sir. We could always improve. We could spend more money. You could spend a lot more money, but you can't spend for everything you want. We could spend a lot more, but we are spending within what I think is a very good budget of $10 million; yes, sir.

Senator CARROLL. Thank you very much.
Senator GRUENING. Senator Long.

Senator LONG. I have two very brief questions that I would like to pursue later on. References have been made here to the democracy that exists there. In relation to that, thinking of education, the two questions are these:

Governor, approximately what percentage of the total government expenditures are devoted to education? Can you give that answer?

Mr. DE CASTRO. Lower in general than in the United States. Out of a total budget, Senator, of this year of $10,278,000, the Department of Education gets from the local government $2,183,000 or a little over 20 percent, between 20 and 25 percent.

Senator LONG. That is, as you have already suggested exceedingly Mr. DE CASTRO. It is exceedingly low; yes. It can be improved.

Senator Long. The other question is: The most important phase of any school program is the teacher. How about teachers' salaries or teachers' compensation? We have been talking about the income of other groups.

Mr. DE CASTRO. Teachers' salaries run now from a minimum I would say of $3,000 or $3,500 up to a maximum of $5,000 or $6,000. "Teachers salaries incidentally are higher than those in Puerto Rico. Our teachers's salaries are higher than the teachers' salaries in Puerto Rico.

Senator LONG. Thank you. That completes my questions.
Senator GRUENING. Senator Burdick.

Senator BURDICK. Governor, when you retired as Governor, then you became associated with what we call the Paiewonsky Bank; is that correct?

Mr. DE CASTRO. I became associated with the West Indies Bank & Trust Co. of which Mr. Paiewonsky was a stockholder and director; yes, sir.

Senator BURDICK. The reason I said that, I think, was that I seemed to get that in your exchange with the chairman.

Mr. DE CASTRO. Yes, sir.
Senator BURDICK. And thereafter you became president ?
Mr. DE CASTRO. Yes, sir.
Senator BURDICK. How long were you president?

Mr. DE CASTRO. I was president for 1 year. I was cashier when I joined the bank. I left the government service upon the inaugura

low.

tion of my successor on April 12, 1954, and became controller and cashier at once and I stayed controller and cashier until January 1, 1958.

I became president upon the departure of the former president and I left for the Government service at the request of Governor Merwin, the new Republican Governor, who was a Virgin Islander, who called me back on January 1 as his director of the budget and general consultant.

Sentor BURDICK. In other words, you were very conversant with the real estate department of the bank ?

Mr. DE CASTRO. Yes, sir.

Senator BURDICK. And you had considerable loans which were: made?

Mr. DE CASTRO. Yes, sir.
Senator BURDICK. That is the business of the bank, to make loans ?
Mr. DE CASTRO. Yes, sir.

Senator BURDICK. They didn't make any loans to these slum areas, did they?

Mr. DE CASTRO. Yes, sir. Many loans were made for individuals who lived in what you would call the slum area but who owned their own homes there; yes, sir.

Senator BURDICK. In good banking practice a man would have to: have some equity and character to borrow on?

Mr. DE CASTRO. Yes, sir. Under the law we can only make a loan up to about 50 or 60 percent of the appraised valuation of the house and the land, but we made many FHA loans.

Senator BURDICK. But you don't contend that the commercial banking institution is the solution to this problem in this housing, do you? Mr. DE CASTRO. No; you asked me if loans were made.

Senator BURDICK. What are the rates of interest down there on contracts? Mr. DE CASTRO. 6 percent as a maximum rate. Senator BURDICK. Thank you. Mr. DE CASTRO. Fixed by law. Senator GRUENING. Senator Metcalf. Senator METCALF. No questions.

Senator GRUENING. Does anybody else have any questions? I would like to say this, Governor de Castro. You recall some 30 years ago, about the time when the government of the Virgin Islands was transferred from the Navy to the Interior Department, President Hoover declared the Virgin Islands to be “an effective poorhouse." Mr. DE CASTRO. I have another name for it now. Senator GRUENING. That is no longer the case ?

Mr. DE CASTRO. No; it is now the "President's guesthouse.” Instead of being a poorhouse I stated on the 40th anniversary of the transfer of the islands that it had been transferred from President Hoover's poorhouse to the present President's guesthouse. It is the guesthouse for the people of the United States.

Senator GRUENING. My observation, through the years I was associated being with the Office of Territories and subsequently, is that there has been steady improvement, not always at a uniform pace, but in general conditions of all the people have improved since that statement of the Executive's poorhouse, and that they are improving

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and with an enlightened program and the kind of governorship that you gave them we can expect a continued improvement so that they may form an integral part of the American idea in which there will be opportunities for all people and those people will have a steadily rising standard of living.

Do you think that is beyond reach? Mr. DE CASTRO. I think I painted a quite rosy picture sometime in the earlier part of my testimony. May I say that the conditions improved so greatly from the time I left the Government service to when I went back that I wasn't sure when I went back and looked at the budget whether I was still in the bank or whether I was in the Government.

Senator GRUENING. The Virgin Islands get the same tax concession that Puerto Rico does, that is, they pay no Federal income taxes and whatever taxes are collected there are for the benefit of the islands; is that not correct? Mr. DE CASTRO. That is correct, sir.

Senator GRUENING. What about the customs revenues? In Puerto Rico all the Federal customs are collected by Uncle Sam but they are covered in the Puerto Rican treasury.

What is the situation there?

Mr. DE CASTRO. In the Virgin Islands by the treaty between the United States and Denmark and by the subsequent organic act the customs revenues in the islands are collected by the U.S. Customs Service. Their expenses are paid out of the local customs revenues and the balance is covered into the local treasury. The balance amounts to about $270,000 a year. But the expenses are first paid from the revenues.

Senator GRUENING. But you have not had those advantages as long as Puerto Rico; have you?

Mr. DE CASTRO. Customs revenues; yes, sir. If the income tax is to be considered an advantage, I hold it to be a local income tax law because we could have our local income tax law as a territory and as a territory the Federal tax might necessarily apply, so it is our local income tax law except we asked the Federal Government to apply it to us, but the grant of internal revenue taxes to Puerto Rico has been unlimited since 1917. We have had it on a matching dollar-fordollar basis only since 1954.

Senator GRUENING. So you have come into this situation much more recently? You have had it only for 6 years? Mr. DE CASTRO. That is correct, Senator.

Senator GRUENING. I notice that Puerto Rico is moving into all Federal grants. These grants pass to 50 States today, and Puerto Rico is included. Are the Virgin Islands included in all those grants?

Mr. DE CASTRO. In nearly all. We are included in all grants now that I can think of except public highway grants. We are not a part of the public highway grants program, but in order to do that we have to be quite alert because we don't have a representative in Congress.

Senator GRUENING. Do you think it would be advantageous for the Virgin Islands to have a Resident Commissioner?

Mr. DE CASTRO. Tremendously so.

Senator GRUENING. At the present time you feel that you are at a disadvantage in comparison with Puerto Rico in not having any representation in Congress?

Mr. DE CASTRO. We feel that there is considerable disadvantage, Senator. We feel we should have representation from the islands within the Halls of Congress and to keep up with the growing trends of improvement throughout the United States and its possessions and territories.

Senator GRUENING. Do you think that the time has come when such a Resident Commissioner, or Delegate as he was called from Alaska and Hawaii, should be elected by the people?

Mr. DE CASTRO. Without any hesitancy of any kind I would say the time is overdue.

Senator GRUENING. Mr. Paiewonsky, how do you feel on the subject of Resident Commissioner of the Virgin Islands?

Mr. PAIEWONSKY. Senator, I testified before the House committee, the O'Brien committee, earlier during the week-I think it was Tuesday morning-I have always been in favor of having the islands having representation in Congress, even if just to express their views and to keep pace with legislation that is being passed that might effect the Virgin Islands.

I have held these views for many years and I feel the people of the Virgin Islands should have this right or privilege.

Senator GRUENING. You feel that would be true of all the outlying remaining possessions of the United States, would you not?

Mr. PAIEWONSKY. Yes, sir. I feel as long as they are American citizens, and whether they are territories incorporated or not, they want to have a feeling of belonging and I think that the Virgin Islanders, especially, have grown up and become mature and they would like to feel that they are local American citizens and they would like to feel that they are a part and parcel of the United States.

Senator GRUENING. I think they are to be complimented on having that view.

Mr. PAIEWONSKY. Although you don't ask that question, may I say that the time has come also I believe that the people of the Virgin Islands can, and properly can, elect their own Governor.

Senator GRUENING. Thank you.

Are there any witnesses who will not be able to be here tomorrow and who want to testify at this time?

If not, and if there are no further questions now, we will stand adjourned until 10 o'clock tomorrow morning.

(Whereupon, at 1:30 p.m. the committee adjourned to reconvene at 10 a.m., Saturday, March 11, 1961.)

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