Nothing and no one will save us if we do not defend ourselves with forceful determination and patriotic solidarity.

Mr. Thoron, what is your contention now?

Mr. THORON. My contention is I was misinterpreted by Mr. Aguso, the editor of El Imparcial; that I have always agreed that an increase. in the price of sugar would be helpful to the sugar producers and to labor in the fields, but that the amount mentioned would not solve Puerto Rico's problems.

As a matter of fact, in 1944 the Commodity Credit Corporation paid an additional price of 20 cents per 100 pounds-about 6 percent-of which half, approximately, was paid to labor as an increase in wages, and the Commodity Credit Corporation proposed that the 1945 crop be given 45 cents per 100 pounds, which is about a 13-percent increase. That it does not solve the economic ills of Puerto Rico is shown by the fact that the producers say they cannot afford to pay the increased wages that the sliding scale demands, with that 13-percent price increase.

Mr. JENSEN. The first part of his statement is that an increase in the price of sugar

Mr. THORON. It is effectively an increase in the price of sugar.
Mr. JENSEN. That is, a subsidy?

Mr. THORON. A subsidy-the same sort of thing that the beet growers are getting. I believe they are getting $1 a hundred pounds, or $1.50.

Mr. JENSEN. Where is the money coming from for this sugar subsidy?

Mr. THORON. Commodity Credit.

Mr. JENSEN. Out of the United States Treasury, from the taxpayers' pockets.

Mr. THORON. Ultimately out of the United States taxpayers. Mr. JENSEN. Why, certainly, it is. Now, would you rather have a subsidy of 45 cents than a raise in the price of sugar 45 cents; do you think a subsidy does more good than a raise in the price of sugar of the same amount?

Mr. THORON. Now, I think we are getting into a question of the whole hold-the-line policy of the administration. As long as it is the policy of the administration to put a ceiling on the price of goods which you might say are necessities of life to the people of the United States, the question of an increase in price is ruled out.

Mr. JENSEN. Well, you should tell that to the dean of the House of Representatives of the United States, Mr. Sabath, of Chicago, who just made a 30-minute speech on the floor of the House this afternoon, attempting to show that the subsidies had not reduced the price of foodstuffs. And he is a member of the Democratic Party, and he has gone along now for 8 long years voting for all this stuff. Now he has finally seen the light, and he says it has not done the job.

Mr. THORON. Now, that may be, but as long as the policy of the administration is not to permit the free sale of sugar at advanced prices, the only alternative, if the cost of production of sugar is above the ceiling price and if sugar is to be produced, is the payment of a subsidy. I do not pretend to be an economist who can argue the merits of one particular form of price control against another.

Mr. JENSEN. Your subsidy, however, permits the Government to control the economy of the people to a greater degree than most any

other program that we might enter into. You will agree to that; won't you-and is not that what Mr. Tugwell likes?

Mr. THORON. No, sir.

Mr. JENSEN. You and I cannot agree at all; I see that.

Mr. THORON. I am sorry.

Mr. JENSEN. Well, that is what makes America a great country. We can tell each other what we think.

Mr. THORON. You bet.

Mr. JENSEN. And anytime you do not like me, you can tell me so and write it up in the paper; that's the way America can continue to be a free land.

Mr. DWORSHAK. I want to clarify the sugar situation somewhat. How many tons of sugar were shipped from Puerto Rico to the United States, according to the latest available figures you have? Mr. THORON. How many tons?

Mr. DWORSHAK. Yes. How many in the calendar year or the fiscal year?

Mr. THORON. In the calendar year 1944 approximately 757,000 short tons. The 1944 crop was very short, less than 750,000 tons, principally because of the drought.

Mr. DwORSHAK. That was duty-free, and no duty is paid on that? Mr. THORON. In effect, the Puerto Rican grower receives a price equivalent to the price of Cuban sugar, plus the duty. The Cuban grower pays a duty of 75 cents per 100 pounds.

Mr. DWORSHAK. That is additional income for the Puerto Rican sugar producers?

Mr. THORON. Yes.

Mr. DWORSHAK. You mentioned a few minutes ago that efforts were made to provide for incentive payments to stimulate the production of sugar?

Mr. THORON. Yes.

Mr. DWORSHAK. On what basis is that done?

Mr. THORON. That is on the basis that in the judgment of the War Food Administration there is going to be a continuing and substantial shortage this year and next year of sugar available for the needs of the United States.

Mr. DWORSHAK. Is not Puerto Rico assigned a certain quota under our Sugar Act?

Mr. THORON. As I understand it, under war conditions the quotas have been abrogated, and all producers have been urged to produce all the sugar they possibly can.

Mr. DWORSHAK. But in peacetime the sugar producers of Puerto Rico are operating under quotas?

Mr. THORON. Yes, sir.

Mr. DWORSHAK. Which has been stopped during wartime?

Mr. THORON. The quota is based on a percentage of the total estimate of consumption.

Mr. DWORSHAK. In this country?

Mr. THORON. Yes. I do not know whether they have done more than their share or not. Certainly not in 1944, because the crop was only about 75 percent of normal on account of the drought.

71191-45-pt. 1-50

FEDERAL AID TO PUERTO RICO

Mr. DWORSHAK. I notice on page 22 of the justifications you refer to the Puerto Rico Reconstruction Administration and to the activities coming under your jurisdiction.

Mr. THORON. Yes.

Mr. DWORSHAK. Can you tell us the amount of funds which have been allocated to that particular activity in Puerto Rico?

Mr. THORON. The total appropriation was approximately $69,000,000, as shown in the tables already submitted. There have been no appropriations since 1941 for that purpose.

The original relief appropriation had a provision that the proceeds of the sale of any property acquired with it, or the proceeds of rentals of any property should go into a revolving fund, which revolves once, and the next time goes into the miscellaneous receipts of the Treasury.

Mr. DWORSHAK. When was this reconstruction program initiated? Mr. THORON. In 1935.

Mr. DWORSHAK. It was part of the general relief program?

Mr. THORON. Yes.

Mr. DWORSHAK. You told me a while ago that the United States Treasury will receive no tax payments of any kind from Puerto Rico?

Mr. THORON. Yes; that is true.

Mr. DWORSHAK. Yes; but the people in the various States which participate in the relief programs have to pay taxes. On what basis do you justify the payment of those funds to Puerto Rico, taken out of the pockets of American taxpayers and diverted for this relief, or for any other purpose in Puerto Rico, while the people in Puerto Rico do not contribute anything in tax revenue to the United States Treasury?

Mr. THORON. My understanding was that the basis of the whole relief program was that there was a responsibility on the part of the United States Government for the welfare of destitute American citizens, wherever they were, regardless of the amount that they then or thertofore had contributed to the Federal Treasury.

Mr. DWORSHAK. Do not all Americans residing in the United States, on the continent, have to pay taxes in order to qualify for relief? Mr. THORON. Not the ones who qualify for relief. If they are able to pay taxes they do not get relief.

Mr. DWORSHAK. Do those people pay taxes on their incomes they have in Puerto Rico?

Mr. THORON. They pay to the insular government.

Mr. DWORSHAK. Not to the United States Government?

Mr. THORON. Not on their business in Puerto Rico. If they own investments on the mainland or earn money here, they pay an income tax.

Mr. DWORSHAK. But the people in the United States not only pay taxes to the State government, but likewise they pay Federal taxes. But the American citizens in Puerto Rico are not obligated to pay as the persons in all States of the Union. They pay taxes to their insular government, but their relief is an additional burden to which the rest of the Americans contribute something, which they receive from revenue in the Federal Treasury; is that right?

Mr. THORON. That is right; but, on the other hand, many Federalaid programs applicable to the States, including the social-security program, do not fully apply to Puerto Rico. They have actually their own public-welfare law and a public-welfare fund in the insular treasury, and workmen's compensation system.

Mr. DWORSHAK. That is not intended and construed as being a payment to the Federal Treasury; that is simply a payment for their own social security welfare.

Mr. THORON. But the Federal Treasury contributes to the socialsecurity system and the social-security funds of the people of the United States.

Mr. DWORSHAK. But they do pay a tax through the social-security tax and in every other way to the Federal Treasury.

Mr. THORON. But they are not given an opportunity to do that in Puerto Rico.

Mr. DWORSHAK. That is an interesting point. Can you tell me, offhand, if there are any other allocations that have been made by our Government to Puerto Rico for any purpose whatsoever?

Mr. THORON. The Agricultural Adjustment Administration permits Puerto Rico to participate in the various soil-conservation pay

ments.

Mr. DWORSHAK. Just like the farmers in this country?

Mr. THORON. Yes.

Mr. DWORSHAK. The only distinction being that our farmers pay taxes to the Federal Treasury, while the farmers in Puerto Rico pay none. That is the only distinction, is it not?

Mr. THORON. I think so.

Mr. DWORSHAK. I am asking you this not for any particular reason, except that this is the first time that I have been a member of this particular subcommittee which is concerned with some of these things.

What is the total amount of funds in the past 10 years allocated by the United States Government to Puerto Rico for all purposes? Mr. THORON. I will have to submit a table on that.

Mr. DWORSHAK. Will you include that in the hearing at this point? Mr. THORON. Yes.

Mr. DWORSHAK. You can break it down to include reconstruction, or for any other purposes.

Mr. THORON. I have a table which I submitted to a Senate committee last year.

Mr. DWORSHAK. I would like to have that information, which I think will be quite informative.

Mr. THORON. Incidentally, I do recall that the per capita expenditures of the Federal Government in Puerto Rico, are at the bottom of all of the States.

Mr. DwORSHAK. That would not be unusual. It would still be practically a gratuity, would it not?

Mr. THORON. I would not call it that.

Mr. DWORSHAK. I mean in the sense that the people in Puerto Rico pay no taxes to the Federal Government.

Mr. THORON. They pay no direct Federal taxes.

Mr. DWORSHAK. That is my point.

(The statement above requested is as follows:)

1934

1935

1936

1937

1938

44,800.00
1, 430, 152. 78
1, 474, 952. 78
10, 054, 033, 55

1939

1940

1941