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a great deal of difference between that and the conditions that exist at present.

The CHAIRMAN. Will you permit an interruption?

Governor TowNER. Certainly.

The CHAIRMAN. It seems to me that there is quite a difference in this. In the one case the governor is appointed by the President. There would not be any reflection at all upon the people if the President should decide that he wanted some other governor. But, on the other hand, if the governor that was removed should be a governor appointed or elected by the people, would not the people regard that as a pretty serious reflection upon their capacities and would not that arouse a great deal of hostile criticism?

Governor TOWNER. Of course, it might, Mr. Chairman. Of course, there is no question but what that might be the case. I think, however, that the people of Porto Rico would approve the act of the President in any case where the removal was justified. What they want is a good governor; that is, a governor who deals fairly and acts justly with the people.

We must consider this matter as a part of our general policy, I think, with regard to all of our insular possessions. We ought to give them the largest measure of self-government of which they are reasonably capable of exercising. I don't think anyone would take exception to that proposition.

Now, it occurs to me that the record that has been made so far by the Porto Rican people and their legislation and their general relations to the United States Government, which have been increasingly friendly, increasingly harmonious, increasingly advantageous to the mutual interests both of the United States and of Porto Rico, I think perhaps in view of this record Porto Rico is justified in asking that we do something to indicate to them that we appreciate what they have done and that we are not going to stop conferring rights upon them until they have acquired self-government.

Now, if this elective governor is given to them, Porto Rico will be in a position that is very satisfactory and defensible. The United States could not possibly be criticised. Any administration that takes this action, I think I am justified in saying, will do so with the approval of the American people. I think I am justified in saying that they will feel that the United States is doing what it ought to do and what justly is its obligation, if it does extend to our insular possessions such a measure of self-government as they are justly entitled to.

Now, that does not mean in the case of Porto Rico that it shall leave it independent, because Porto Rico does not desire independence. They understand that it is a great deal better for them to be a part of the United States; and I think that if they have an elective governor given to them they will be satisfied for years and years to Of course, they might say that their ultimate ambition is to by a State of the Union, but they recognize the fact that that is at least away off in the dim distance. If they have an elective governor they at least will be able to have what might be called as complete a system of State government as even the States of the Union have. So, it seems to me that that objection is hardly sufficient to overcome what might be considered our obligation to the people of Porto Rico for what they have accomplished in the past.

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Then, besides that, we have also, and will have under this new arrangement if it becomes a law-we will have the right of appointing the auditor, which is, under the extensive powers that he will have, a very great check. We will also have the appointment of the attorney general, which takes care of the legal situation with regard to these matters. All of the new offices of the National Government, such as the Post Office Department, are operated entirely by the United States. Our monetary system is that of the United States. Our commercial system and commercial usages are all those of the United States. The collection of the internal revenue of the United States will be under United States officers. The collection of customs dues will be under United States officers. So there will not be a very great material change in the relations between the two countries, if you choose to call them two countries, under the elective government and that of the present system.

Senator BAYARD. The same relations as far as the Federal Government is concerned exist between the Federal Government and the States of the Union as exist between the Federal Government and Porto Rico. So, even if Porto Rico were made a State, that change would not occur.

Governor TowNER. No, sir; and I am trying to show that there is not such a great change as it is anticipated might occur, because we would have very much the same relation.

Perhaps I might be justified in adding this, which I sincerely believe to be true: If this law could be passed now, its consideration by the Porto Rican people would not be in a spasmodic, excited campaign; but the question of who in 1932, is to be chosen as Governor of Porto Rico would be one upon which they would deliberate. I feel quite sure that there are men in Porto Rico-and I could name them if it were necessary to do so that would make just as good a governor as we have reason to expect will be elected by the people here in the United States in the States. In other words, it would not be a politician; it would be the best man. The politician's desire and ambition would have a hard time in existing for six years before they were brought to fruition. So I think that their judgment would be one of wisdom rather than of politics.

Let me suggest another matter or two that I think are very pertinent to be considered.

Where a change of administration is made, then there is a change in the Governor of Porto Rico. That ought not to be, because it is a political change and the appointments are made for political reasons. Happily they might be good, but unhappily they might and have been and perhaps sometimes will be bad. In other words, the selection is not made of the person who is best qualified to serve in Porto Rico but is made because of the fact that some good man is supposed to be adapted for service in Porto Rico, perhaps without ever having been there and without knowing anything about the people their characteristics, their habits, their methods of thought and of life-that he is going to serve. I really believe that it would be the wiser and juster course to let the selection be made in this way, subject to the right of removal, than that it should be made by political appointments with every change of administration up in the States.

Now, if there are any gentlemen who have any questions to ask or any objections in their mind, I would be very glad indeed to have you express them and would be glad to refer to them if you think best.

Senator BAYARD. Is there anything particularly in your annual report that you want to stress?

Governor TowNER. I was just going to call your attention to another thing. It is not necessary to put in here the record of progress, but I want to call your attention to a few items, just press items from our own newspapers. They report the weekly financial transactions of business in the Government.

Of course, you know that the price of sugar is very low. Notwithstanding the fact that the price of sugar is low, the shipments of sugar that have been made since January 1, from the commencement of this year, were 193,845 tons. These are the shipments of this year with the price at least a cent lower than it was last year. The shipments last year for the same period were 123,440 tons. So, the excess of this year over last year, notwithstanding the fact that the price is a cent lower per pound than it was last year, is about 70,000 tons. A ton of sugar is quite a good deal of sweetening.

I want to call your attention also to this fact: The San Juan Bank clearings--and that almost means the clearings for the island, because the banks there have branch banks in other parts of the island and most of the financial transactions that are transacted in the island are finally transacted in some one of them-the San Juan Bank clearings for the week-this is just for one week-ending Saturday, April 10, were $8,819,786, as compared with $4,482,487 for the corresponding week of the preceding year. So, you see, this week's total of bank clearings in San Juan is nearly twice as much as it was last year.

Now, of course, I think that that proportion is greater than it was during any other week; but I do not think that you can find a single week's report during this year that does not show a large increase over the preceding year. The financial condition and the progress, especially in the production of sugar, which last year was by far the greatest production, amounting to about 500,000 tons greater than had ever been produced before, a larger production of coffee, which is probably the largest production that has been made, at least for 10 or 15 and perhaps 20 years, with an increase in the production of fruits and the increase in the production of tobacco; all those indicate a prosperous condition.

Of course, gentlemen, we have poverty in the same way in our island that you have poverty in the United States. But we are trying to bring about better conditions. There has been a marked improvement and increase in the price of labor and the wages of the laboring people. There is room for a great deal of improvement there. We have a dense population and during parts of the year we have unemployment. But you do not find among the people of Porto Rico the discontent that exists in almost every country and in some parts of our own country.

It has been suggested that various immigration projects should be proposed and carried out. But when you come to try to induce these people to leave, although they live, many of them, in little one-room houses up on the sides of the mountains, you will find that

they do not want to leave Porto Rico. Porto Rico is a beautiful place to live, an easy place to live, a place where if you can eradicate some of the things now that seriously afflict the people, for instance, such as diseases and we are opening and have opened in every large town in the island three clinics for the people who are diseased and who are too poor to purchase service; we have three dispensaries also, so that they can have medicine. We provide physicians in these municipalities for the service of the poor without charge to them.

We are every day enlarging the school facilities of the island. I think we can say, without the statement being challenged, that the progress of the Government of Porto Rico is such that it ought to make the people of the United States feel that the people of Porto Rico are taking good care of themselves and that they are using to good advantage the freedom that has been given to them and the privileges that have been given to them.

They appreciate the fact that they are people of the United States and a part of it. They are rapidly adjusting themselves to American conditions and American usages. American textbooks are used in the schools. English is taught throughout the entire course of our public school system, and exclusively after the fourth year English textbooks and English methods of teaching are used in the grades and throughout the high schools and in the universities. If there are any further questions I should be glad to answer them.

Senator BAYARD. You say there has been a material increase in the production of sugar and coffee in the past year?

Governor TOWNER. Yes.

Senator BAYARD. Is that increase in the production of coffee due to a better crop or to better methods of handling the crop?

Governor TOWNER. It is largely due to a better price, Senator, and to better methods that are being used by the larger interests and especially in the cooperative feature which we are introducing down there.

Senator BAYARD. Has the development in better roads to the cropgrowing district made a material difference?

Governor TowNER. A very great difference.

Senator BAYARD. As a rule an increase in sugar production is due to a better method of producing sugar from the cane? Governor ToWNER. Entirely so.

Senator BAYARD. Better mechanical operation?

Governor TowNER. Our sugar centrales are the best centrales in the world. I think there is no question about that. I was asking some sugar experts here in Washington that know conditions everywhere and they say that the method of Porto Rico is the best.

Senator BAYARD. Does that large production of sugar reflect in any way in the employment of more laborers or by better mechanical operation?

Governor TOWNER. I don't think that it touches the labor situation. In my last report I say so. I don't think that it does. The combination in the larger areas of land taken from the small people that hold ten or twenty or thirty or forty acres of land which was sugar land is very great. They are being tempted to sell. The large centrales come to them and say, "We will give you $500 an acre

for your land. You can take this money and you can go to town and live on the interest of it and you won't have to do anything. You can send your children to school" and all that sort of thing. It is a great temptation and unfortunately it is too often accepted. It would be a great deal better if the colonos stayed on their little farms instead of having them joined up with the larger aggregations of capital. So, I do not know what we may be able to do, if anything, regarding that matter. But I do not think that it goes to the labor situation.

This is the way that we can help the labor situation with regard to sugar transactions: When I came to Porto Rico three years ago they had just been through some very disastrous strikes in the sugar sections, owing to small payments for wages, sometimes 50 or 60 or 70 cents a day during the very busy period. Now, I found out that one at least of these centrales adopted with satisfactory results a method of paying wages according to the price of sugar, based upon the price of sugar. That is, for illustration, if the price of sugar was 4 cents a pound, which is considered as a sort of basic price, then they would pay a dollar a day wages, and when it rose to 5 cents a pound, they would pay $1.25; and when it got up to 6 cents a pound they would pay $1.50, and so on. That seemed to me to be a very advantageous system, so I urged very strongly upon the colonos the adoption of that sort of policy. It has been very generally adopted in the island and since then we have had no particular trouble with the laboring people.

In some instances we pay too small wages. The trouble is, of course, that the labor, while it exists so far as the cultivation of the ground is concerned, the preparation of the ground, the large development, that requires two or three or four times as many laborers as usual, is only during the cutting and grinding season, which lasts only four or five or six months.

Senator BAYARD. In other words, it is a seasonal operation?
Governor TOWNER. Yes.

Senator BAYARD. And when they get through in the seasonal centrales, then they go to somebody else for occupation?

Governor ToWNER. Yes; or sometimes it is scattered around and they are given jobs on the farms. Many of them are given work on the farms.

Senator BAYARD. So that when these smaller planters who own little plantations of a few acres sell out to the centrales, they, in turn, have to come back as laborers and add to the number of laborers on relatively the same amount of ground?

Governor TowNER. I could hardly say that, because I am inclined to think-these people are pretty thrifty and they don't require very much. If a man had three or four acres of land and he could sell them for $500 an acre, he could go to town and live on the interest of that very well in Porto Rico for the rest of his life and educate his family and help his children along.

Senator BAYARD. Does he invest it as a rule?

Governor TOWNER. I think that he does. I am not sure about it. I never heard that it was riotously disposed of. I don't think the people are that way. These colonos, I think, are a pretty thrifty lot of people and they try to take very good care of it if they can.

The CHAIRMAN. Senator Nye, do you have any questions to ask?

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