Puerto Rico, Sweet Land of Liberty

Will Lissner

[Reprinted from Land and Freedom, November-December 1937]

A demonstration of the universal character of the land question, as it appears within a particular national economy, was one of Henry George's important contributions to economic theory. The question, George held, "is nothing less than that question of transcendental importance which is everywhere beginning to agitate and, if not settled, must soon convulse the civilized world," the question whether the masses of mankind will be con tent with poverty amidst actual and potential abundance.

Distress was acute in Ireland in George's time and the situation was dramatized by the agitation of Parnell, Davitt and the Land Leaguers. George analyzed this situation in The Irish Land Question, afterward published as The Land Question. He found the cause of the distress in the system of land tenure which prevailed there, the system of absolute private ownership of land and noted that "essentially the same land system a that of Ireland exists elsewhere, and, wherever it exists distress of essentially the same kind is to be seen." He concluded that everywhere the connection between the system of tenure and the social problem of pauperism is "that of cause and effect."

This principle of George's has resulted in many studies of various types of economies by students of the social sciences. These studies have particular value for the science of economics. Not even in the United States where statistical research has made great advances in the past two decades, are data available for a complete analysis of the economic effects of privilege. Thus the student must turn from the monopolistic-imperialist economy to other types.

It is not true that the seemingly exact scientific method, of laboratory analysis, experiment and proof, which is associated with the physical and biological sciences, cannot be approximated in the social sciences, and particularly economics. One cannot experiment with the happiness and well-being of 135,000,000 persons, of course, in the present delicate state of the economy.

But, as George pointed out, in the less advanced economies the relation between land and labor can be seen with such distinctness that it is seen "by those who cannot in other places perceive them." This is possible, he continues, because of certain special conditions peculiar to the particular economy. Definition of these special conditions is of no concern here; they are not always identical, from one country to another, and probably need not be.

These studies have been limited in the light they have thrown on the principle only by the limited character of the data available. Fortunately, the growth of interest in George's work in recent years, and the passing of the content of his emphasis upon land reform into the systems of leading economists a process which is only in its beginnings have given a new direction to economic and social inquiries, making accessible much new information bearing upon this principle.

A very valuable one has just appeared, a study of "The Dilemma of Puerto Rico," by Earl P. Hanson, who served as a member of the executive board of the Puerto Rican Reconstruction Administration, an agency of the United States Government. Mr. Hanson was on loan to it from President Roosevelt's National Resources Committee, of which he was planning consultant.

I

Poverty is a bitterly abject thing in Puerto Rico, according to Mr. Hanson's study. "On the outskirts of every town are found the same dismal slums, thousands of miserable huts mushrooming out of land that is often marshy and infected," he writes. "All parts of the island, and particularly the coastal plains, are dotted with 'houses' built of hurricane debris, old gasoline tins and old rags, often on squatters' land, where there is no chance to grow food." On the roads and in the streets large groups of jobless "jibaros," poor peasants, dejectedly mill back and forth in the hopeless search for work. "It is a common sight," he declares, "to see them (the permanently unemployed) scavenging in garbage pails in the cities and begging their food from garbage trucks."

Unemployment in this agricultural economy is as widespread as it was in the United States in 1932. The Federal Emergency Relief Administration estimated that there are in Puerto Rico not less than 150,000 heads of families permanently unemployed," which is about one-third the working population. The Brookings Institution inquiry in 1929 showed that in the city of Ponce 47 per cent of the men investigated were unemployed either totally or periodically. For jobs of the white- collar class, 41,745 persons applied to the Puerto Rican Reconstruction Administration in September, 1936. About 100,000 men, or about one-fourth of the working population, are employed only during the harvest and grinding season from January to July in the sugar industry and are idle afterward.

Wages in this section, seat of one of the most important sugar industries in the world, are incredibly low. The industry, in spite of large earnings, paid its workers wages that averaged about 12 cents a day per worker and dependent in 1929, and the average has not changed since. The average annual wage of a seasonal worker is about $150, on which he has to support a family of about five dependents.

Real wages are lower than even the nominal wage would indicate. Food and practically all the necessities of life must be imported, in the highly expensive tariff protected American market. The employed workers are forced to buy from company stores, an additional monopoly which exacts its price.

About 94 per cent of the average worker's income is spent for inadequate food. On the inadequacy of the food, L. M. Ramos reported in a study for the Department of Education, San Juan: "One of the most disturbing aspects of the family budgets of the island is the dominance of imported dry food, especially polished rice. The bad hygienic results of the diet so lacking in vitamins need no comment . . . Monotonous and debilitating diet is used by a large proportion of the people."

The effects of the diet are seen clearly in the health of the workers. Nearly 90 per cent of the rural population and about 40 per cent of the urban inhabitants have hookworm in their intestines, according to Dr. Walter C. Earle of the Rockefeller Foundation, reporting to the American Journal of Tropical Medicine. The death rate from gastro-intestinal diseases is about 360 per 100,000, against 25 in the United States, 40 in Alabama. Tuberculosis, despite the sunniness and healthiness of the climate, accounts annually for 325 deaths per 100,000 population, the highest for any civilized country for which statistics are available, against 60 in the United States, 90 for Tennessee. This was reported by Dr. Costa Mandry in the Puerto Rico Journal of Public Health and Tropical Medicine. Malaria, according to the Insular Department of Health, is responsible for 8 per cent of the total deaths, 175 per 100,000, six times that of the four most malaria-ridden southern states combined.

Virtually nothing remains of the worker's pitifully small income for housing, clothing, medicine and similar necessities. The Brookings Institution, after its investigation in 1929, declared: "The problem here is fundamentally economic and not sanitary." The problem, it continued, had its roots in poverty.

II

The growth of population and its relation to the natural resources of the island has special significance for the Georgeist student. As in all countries where life is hard for the common man, the population continued to grow steadily and to enlarge the island's social problems. From about 900,000 in 1897, it has grown to 1,723,534 in 1935, according to the P. R. R. A. census.

The birth rate is fairly steady at about 40 per 1,000. The death rate has been gradually decreasing since the American occupation and is now about 18 per 1,000. The natural increase is around 38,000 per year.

The overall density of population is about 510 per square mile. This, as Mr. Hanson points out, is exceeded only in such industrial countries as Belgium and the Netherlands and in such agricultural countries as Java and some of the West Indian Islands. The social problem in Belgium and the Netherlands is nowhere so acute that it can be compared with that of Puerto Rico. Java is a classic example of what happens to a dense population when social institutions and customs hem it in. The density per square mile of cultivated land, 1,500, is about the same in Java as it is in Puerto Rico. But Java must yield to Puerto Rico as a classic example, according to Mr. Hanson's calculations.

Java has a greater proportion of its land cultivated by and for its inhabitants, including cultivation for direct consumption and for exchange for commodities desired for consumption. It has a greater diversification of crops. Therefore, Mr. Hanson concludes, the effective density of population in Puerto Rico is perhaps the greatest in the world. For in calculating the population supported by the land, one must include not only those who work upon it, but those who live off it, the owners present in Puerto Rico and the owners absent in the United States.

Rice, beans and peas, the principal foods imported from the United States, all are grown in Puerto Rico. But the per capita acreage devoted to them has declined steadily from 1897 to 1935. Meanwhile the acreage devoted to the export crops has almost doubled. Specialization in cash export crops would result in an even higher standard of living for Puerto Ricans under a free economy; under monopoly capitalism they are robbed of that as well as of an average primitive subsistence.

III

The social problem outlined above is explained by the changes in land use and tenure, reliable figures for which are now available in a 1936 report by Rafael Pice to the Puerto Rican Reconstruction Administration.

The total amount of land under cultivation has practically doubled since 1899, together with the population. In 1899, the total of cultivated land was 477,987 acres; in 1909 it was 542,675 acres and in 1929 it was 756,642. The increase in cultivated land between 1909 and 1929 was 213,967 acres. From the close of the Spanish-American War to the beginning of the world depression there was little change in the amount of land under cultivation per capita. In 1899 this was 0.50 of an acre; in 1909 0.49 and in 1929 again 0.49 of an acre.

But between 1920 and 1930 there were highly significant changes in the distribution of the land in farms. To make these changes clear, the figures are given first, then the significance is drawn. Land in farms of 500 acres and over, including cultivated and uncultivated land, increased from 662,970 acres to 867,490 acres, a gain of 202,520 acres.

It will be noted that the increase in land in farms of 500 acres and over is almost exactly the same amount as the increase in the total amount of land under cultivation. This increase took place, Mr. Hanson points out, "in spite of the fact that these farms are largely illegal under Puerto Rico's Organic Act."

But during the same period the total number of farms of 500 acres and over decreased from 539 In 1910 to 367 in 1930, a drop of 172.

The fact that the total number of farms of 500 acres and over decreased by almost one-third, while at the same time the land area in them increased by 33 per cent shows the greater concentration of land ownership in those farms, among the farms of 500 acres and over, which had the larger area.

In the same period, the land in farms operated by their owners, including cultivated and uncultivated land, fell from 1,457,345 acres in 1910 to 1,166,976 acres in 1930, a decrease of 290,369 acres. But the land operated by managers increased from 401,749 acres in 1910 to 676,760 acres in 1930, an increase of 275,023 acres.

As Mr. Hanson points out, these items are highly significant from a social point of view. They show "that while the large estates increased, the acreage of land operated by owners decreased by some 300,000 acres, the land operated by managers increasing by almost the same amount." The figures give a clear picture of the process by which the Puerto Ricans were expropriated from their land.

When the data on land use is examined, the nature of this process is disclosed. Land in sugar cane rose from 72,146 acres in 1899 to 145,433 acres in 1909 and to 277,758 acres in 1929, an increase from 1909 to 1929 of 92,325 acres. Land in coffee fell from 197,031 acres in 1899 to 186,875 acres in 1909, but then rose to 193,561 a gain from 1909 to 1929 of 6,686 acres. Land in tobacco increased from 5,963 acres in 1899 to 22,142 acres in 1909 and then jumped to 52,947 acres in 1929, an increase from 1909 to 1929 of 30,805 acres. The export fruit industry is so comparatively new to Puerto Rico that the land in fruits did not warrant separate reporting in the 1910 census, but in 1930 it amounted to 8,366 acres.

The total land in the four main export crops rose from 275,140 acres in 1899 to 354,450 acres in 1910, and then increased to 492,638 acres, a rise of 138,182 acres. At the same time, the land in food crops fell from 0.22 acres per capita in 1899 to 0.16 acres per capita in 1930, a fall from 1899 to 1930 of 0.06 acres per capita.

Mr. Hanson's explanation is worth quoting verbatim. He says:

"In most cases, managers in Puerto Rico mean absentee ownership. The absentee owners who have come to dominate the island's economy since the American occupation are interested entirely in cash-export crops.

"The increase of some 140,000 acres planted to these crops, and particularly the increase of almost 100,000 acres planted to sugar, indicates that while the extension of land under cultivation kept pace with the growth of population, this extension was made largely by and for absentee owners, bringing comparatively few benefits to the island's population.

"Most of the concentration of land in large estates has taken place on the coastal plains, on lands devoted to sugar. This land, consisting to a large part of alluvial soils, is the most valuable land on the island."

Mr. Pica's data gives an interesting picture of how the American corporate landowner squeezed the Puerto Rican land user from possession of the soil of his native island. Mr. Hanson has calculated from the United States Census of 1930 how farms now range in size, giving a clear picture of the present concentration of land ownership.

There are 37,587 farms of 19 acres and less, which are 71 per cent of the total number of farms. The total acreage of these farms is 278,935, or 14.1 per cent of the total acres in farms. Farms of 20 to 49 acres numbered 8,835, 16.7 per cent of the total number. The total acreage of these is 264,712, or 13.4 per cent of the total acres in farms. There are 3,351 farms from 50 to 99 acres, 6.3 per cent of the total number. Their acreage is 226,464, or 11.4 per cent of the total.

Farms from 100 to 499 acres numbered 2,825, or 5.3 per cent of the total number. Their total acreage is 341,873, or 27.4 per cent of the total land in farms. Farms of 500 acres and over numbered only 367, or 0.7 per cent of the total number. But the total acreage in these farms is 867,490, or 33.7 per cent of the entire area of land in farms.

These figures show that more than one-third of the land in farms is in those of 500 acres and over, which comprise less than 1 per cent of the number of farms. At the same time, the family-size farms, the small farms of less than 20 acres, which make up 71.0 per cent of the total number of farms, include only 14.1 per cent of the land.

Mr. Hanson contrasts the present situation with that which obtained before the blessings of American occupation were visited upon the island.

"According to the census of 1899," he points out, "more than three-quarters of the total area of Puerto Rico (2,743 square miles) was then included in farms. The average of cultivated land to each farm was 12 acres, and the proportion of farm owners to the whole number of farms was 93 per cent, contrasted with but 28 per cent for Cuba.

"The military authorities who took the census and wrote a detailed discussion of it were almost prophetic of the civil disturbances tearing Puerto Rico today, when they said: 'This general ownership of farms, however brought about, has unquestionably had a great influence in producing the contented condition of the people of this island as contrasted with the restlessness of the Cubans'."

With the decline in land available for use for food crops, Puerto Rico today imports over 60 per cent of the food she consumes. Mr. Hanson points out that if this meant that the Puerto Ricans were exchanging their export crops which can be produced so efficiently on the island for food crops which can be grown more efficiently elsewhere, they would have a high standard of living in spite of the population density, and perhaps, in part, because of it.

But that this is not being done is illustrated by the position of the sugar industry. This industry, which replaced coffee as the backbone of the Puerto Rican economy, accounts for 64 per cent of the island's exports and employs about one-fourth of the working population. Purchasing power, under the stimulus of its growth, rose from $20 per capita in 1899 to about $70 in 1935, as measured by imports into Puerto Rico.

But about two-thirds of the securities of the sugar corporations are held outside the island. Of 41 mills operating in Puerto Rico, 11 are controlled by four large absentee corporations, and these 11 produced nearly half of the total sugar production of 1936. Esteban A. Bird calculated in a special report to the P. R. R. A. that between 1920 and 1935, three of the large sugar companies alone paid dividends and accumulated a surplus amounting to $80,000,000.

These are not the least of the charges in the indictment of the sugar land monopoly of Puerto Rico. The Brookings Institution investigators found that the lands on which the sugar industry pays taxes are on the whole under-assessed by perhaps 25 per cent, while most other lands are over-assessed to meet the needs of a financially embarrassed government.

In addition, Mr. Hanson points out that much of the sugar industry was created under the American tariff and is artificially maintained. "How large a proportion of the industry could survive and compete with such areas as Cuba in the world market," he adds, "is open to question." Also, as a result of the chaotic conditions created by the dominance of this monopolistic industry, other Puerto Rican crops suffer an almost complete lack of credit and distribution facilities, resulting in high efficiency and waste.

How the economic and monopoly rent of Puerto Rico is exported to the absentee owners is shown by Mr. Hanson in a study of the balance of payments.

"It (the balance) has been against Puerto Rico only five years out of the last thirty-five. But this apparently excellent balance of trade, showing an average (annual) gain of some $10,000,000 in favor of the island is purely fictitious.

"The exports of cash, in the form of dividend payments, interest payments (on bonds), real estate rentals and freight charges, and the like, so far exceed the paper balance that the net balance is somewhere around $10,000,000 against rather than for the island."

IV

Mr. Hanson's study is published by Science and Society, A Marxian Quarterly (in the Summer, 1937, issue). If it were not for the fact that his approach to the question of land ownership is Georgeist rather than Marxist, one would be led, by the fact that some of his proposals on the tariff questions involved are distinctly not Georgeist and by the conclusions which he draws from his data, to suspect that he chose his medium of publication out of sympathy rather than expediency.

He considers the efforts being made by the Federal government to reduce absentee ownership by purchase and to resettle Puerto Ricans on land of their own as "praiseworthy." He himself sees, however, that "the difficulties imposed by federal restrictions and local conditions are almost overwhelming." Even if the programme for the next two years is fulfilled, the P. R. R. A. will have resettled only about 15,000 families.

"At the general average of about 5 per family, this will be about half of the natural increase in population since the P. R. R. A. was first organized," he points out, "showing that the P. R. R. A. as a reconstruction agency has so far been unable to work fast enough to keep pace with the natural population growth."

Moreover, he notes that "in the last few years the federal government has expended or allotted between $60,000,000 and $80,000,000 for relief and reconstruction alone, in an apparently futile effort to hold Puerto Rico together" and makes the sage comment, although he does not seem to realize just why this is, that "the island has been compared with a cow that is fed by the American tax-payers and milked by a few large absentee corporations."

Mr. Hanson's conclusion is that the proper kind of independence is the indicated solution for "the dilemma of Puerto Rico." This explains the variety of ideological debts which enable him to make a Georgeist approach to an economic situation in a Marxist magazine and yet draw the most conservative conclusions. He must be a New Dealer by conviction as well as connection: one speech forward, two steps backward, as a wit once defined that social philosophy.

"What kind (of independence) is eventually achieved, and how it is achieved, depends on the organized determination of the Puerto Rican people to liberate themselves from their present dilemma, and on the extent to which they succeed in breaking through to the consciousness of the American people in their pleas for independence and for their own right to help themselves out of an intolerable social-economic mess."

This conclusion of Mr. Hanson's is totally inadequate. The editors of the Marxian quarterly should have realized it, not so much as Marxists, for not even in Soviet Russia, in spite of the best of intentions, has there been rational settlement of the land question, but at least as students of economics alert enough to recognize the importance of the Puerto Rican data.

With the desire of the Puerto Ricans to free themselves from American imperialism, all lovers of freedom must sympathize. Their right to help themselves is undeniable. But no form of independence will solve their problem until they come to grips with the system of land tenure prevailing on the island.

The data presented above shows clearly that unemployment exists on the island because Puerto Rican labor is denied access to the land. Mr. Hanson admits that it shows clearly that even if a primitive economy were substituted for the present one, the standard of living would be raised to a fairly comfortable level so long as the land of Puerto Rico were open to the people of Puerto Rico.

It would be a reactionary step to revert to a primitive economy however, and neither Mr. Hanson nor the present writer would advocate this. It would be a needless step. For the drain on the Puerto Rican economy which payment of economic and monopoly rent to private land owners represents, shown so clearly by Mr. Hanson in his analysis of the export of capital claims against the wealth produced in Puerto Rico, could be dammed at once by means of the social land value tax.

This would enable the Puerto Ricans to continue concentration upon cash export crops, while at the same time opening up less valuable land to diversified food crops. It would enable them to abolish their system of taxation, which Mr. Hanson shows to be inequitable, and thereby release labor and industry from governmental exactions which burden production.

Next, they would need to campaign for independence. Not mere political independence, but independence also from the exploitative tariff system of Imperial America, which robs them, as Mr. Hanson shows, through the exorbitant prices they must pay for the foodstuffs and other commodities which it is advantageous for them to import. This would also free them from the dominance of the sugar industry if, after the abolition of tax burdens and the more efficient use of land which the socialization of rent would tend to produce that industry were still found to be largely parasitical. All these measures would tend to make capital available for all the island's industries as well as new industries, and not only for the sugar industry.

The Puerto Ricans could go on from there. If they did, Puerto Rico might one day be an American Utopia. At least it would have a higher standard of living than would prevail in the monopolist mother country, technological advance or no technological advance. Mr. Hanson, in his frank and honest analysis of the measures to which he gave his own expert service, proves that if the Puerto Ricans do not go on to there, their condition will remain hopeless.

The situation of Puerto Rico today is almost identical with that of Ireland in the '80's. What Henry George told the leaders of the Irish land reform movement needs to be told Mr. Hanson and all friends of the Puerto Ricans, as well as the leaders of the independence movement. It makes no difference whether the absentee owners live around the corner or across the ocean. So long as there are absentee owners, so long will the emancipation of the Puerto Rican people be blocked.

When equal rights to the land are acknowledged, when the land is freed for efficient exploitation by the user, when taxes, tariffs and all monopoly exactions which burden and strangle production are abolished, only then will the economic dilemma of Puerto Rico be solved.

When all special privilege is abolished by the socialization of rent, beginning with the greatest and most pernicious privilege, absolute private ownership of land, when natural opportunities and forces are freed to the producer by the application of the revenue from the socialization of rent to the maintenance of enlarged social services, then, and then only will Puerto Rico be able to become a true republic:

"Not a republic of landlords and peasants; not a republic of millionaires and tramps; not a republic in which some are masters and some serve. But a republic of equal citizens, where competition becomes cooperation, and the interdependence of all gives true independence to each; where moral progress goes hand in hand with intellectual progress, and material progress elevates and enfranchises even the poorest and weakest and lowliest."

And this can only be done when the Puerto Rican people are made to realize this, as thousands are being made to realize it in the United States through the social movement Henry George founded, and when they demand it. It still remains true that the enemy of the Puerto Rican people is not the American imperialist who is a parasite upon them, but their own ignorance of how their economy is working and how its evils can be abolished.