Birth of a Nation: The Colony, The Territory, The State

“Incapable of self-government” 

Verve Observation

by Phillip Wong

    “Porto Rico differs radically from any other people for whom we have legislated previously . . . they have no experience which would qualify them for the great work of government with all the bureaus and departments needed by the people of Porto Rico.”   Said Republican Senator Joseph B. Foraker in a speech before the United States Senate in 1900.

Puerto Rican flag painted on uprooted tree. Foto: Edgardo Santana

In another speech before Congress in 1900, Senator William B. Bates (D-TN) who had served in the Confederate Army said:


“ What is to become the Philippines and Porto Rico? Are they to become states with representation here from those countries, from that heterogeneous mass of mongrels that make up their citizenship? That is objectionable to the people of this country, as it ought to be, and they will call a halt to it before it is done.           Jefferson was the greatest expansionist. But neither his example nor his precedents affords any justification for expansion over territory in distant seas, over peoples incapable of self-government, over religions hostile to Christianity, and over savages addicted to head-hunting and cannibalism, as some of these islanders are.”

Puerto Rico’s role in America’s development
   A historical perspective

        The views made in the United States Congress, at Puerto Rico’s inclusion into the United States sphere of influence were the backdrop of how Puerto Rico would be governed by the United States Congress for the next 117 years.


        These were not unique or shocking views as the 1800s passed into another century in America. But they create a perspective to how our views shaped a nation, a foreign policy, politics and an economy that echoes through our society today.


       The United States perspective on Puerto Rico focuses on the geography of Puerto Rico, Latin America, Central America and Cuba, as American economic and military interests were shaped through the 1900s.


In the wake of economic and infrastructure disaster following the hurricanes of Maria and Irma in 2017, and the consequences of ongoing events, lead us to look at how Puerto Rico came to this position, and what America’s responsibility to this territory, is.


      Throughout Puerto Rico’s history with the United States, enduring racism, economic colonialism and military defense from the early 1900s until Puerto Rico became militarily expendable, Puerto Rico has existed as a useful territory, but in 2017, the abdication of responsibility by America, became starkly obvious.

Here’s why:

A New World
Zurab Tsereteli’s The Birth of the New World at Mayaguez, Puerto Rico. Foto: Edgardo Santana



             The New World was explored and discovered from 1400 through 1900 by European explorers seeking gold, glory and a foothold for a Christian god. Asia and Africa were already known by traders and crusaders for centuries, but the sea was a possible new path. Portugal, Spain, France, the Netherlands and England were the sponsors of exploration, and their explorers claimed new lands for their sponsors.


                     Puerto Rico was considered to have been the land discovered by Columbus when he first landed in the New World. He claimed Puerto Rico for Spain in 1492 and for the next two centuries, Spain was a dominant nation in global exploration and development.

          When Columbus landed, the indigenous people of Puerto Rico were Taino, but they, like many native peoples, perished from European borne diseases, warfare and slavery. Puerto Rico remained a Spanish colony from 1492 until 1898.

From Spain to the United States

           Puerto Rico became a territory of the United States in 1898 when Spain ceded the island over following the Spanish-American War.

The war was actually a result of Cuba’s closer economic ties and geographical proximity to the United States than Spain (90% of it’s sugar production went to the United States – which would later factor into Puerto Rico’s fate.  American business interests wanted the stability of consistent trade, thus supporting Spain, while popular interests were inflamed by a “Cuba Libre” movement that used New York media to state their case.
Other Spanish territories of Puerto Rico, Philippines and Guam were almost incidental to this growing conflict.


        Cuba was struggling for independence from Spain since the 1870s, but as tensions continued to increase, America, trying to negotiate a settlement, sent a warship to Cuba in 1898.   When an explosion on the USS Maine, in Havana Harbor, the explosion was blamed on Spain,  and the United States was launched into war with Spain on Cuba’s behalf.


         Once declared, in April 1898, the Spanish-American war was over in ten weeks. United States naval superiority created a blockade of Cuba, and made it possible to disembarked troops both in the Caribbean and in the Pacific against isolated Spanish forces in Cuba, Puerto Rico and Philippines.  Without an ability to supply reinforcements or supplies to their isolated troops,  Spain was forced to sue for peace in the 1898 Treaty of Paris.

In the treaty, Spain granted Cuba independence while ceding Puerto Rico , Philippines and Guam to United States control.


          Puerto Rico had just elected a parliament (a right which Spain had granted to both Cuba and Puerto Rico) that was meeting the day America declared war on Spain, but when the Treaty of Paris was signed, and an uncertain government in Cuba, United States business interests began to transfer their focus on Puerto Rico.


              In the transfer, Puerto Ricans lost their Spanish citizenship but did not become American citizens.



Territory, Colony, Commonwealth, Independence, State
1900 campaign poster for President William McKinley.
               For more than 100 years, Puerto Rico has remained in American limbo, as the decision on whether to be granted (and to accept) statehood, independence, commonwealth status has been debated and voted on both by Puerto Ricans and the American Congress.
               Puerto Rico came into American hands believing it would be granted independence from Spanish rule. Instead Puerto Rico became a territory and all issues relating to the territories’ governance were vested directly with the Congress, as prescribed under the Territorial Clause (which does not allow a territory to choose independence, or statehood without United States Congressional assent – but this extends to many laws of governance.)
Charles Herbert Allen inaugural speech as Puerto Rico's first appointed governor.

           The perception of the American Congress, and American businesses to Puerto Rico, is vastly different than the perception of Puerto Ricans to America (and there is always a difference between people on the street and governing bodies). Americans have viewed Puerto Rico in a transactional prism – how can our businesses and economy benefit from this island?


            From 1900 to today, America has always looked at Puerto Rico first, as land for sugar plantations, and labor that, while not being slaves, didn’t have to be paid as much as American labor, and literally did not have the rights of American workers (no freedom of speech, or freedom to unionize).

           The people of Puerto Rico have very little direct impact on their own destiny from the island.
Sugar cane production at cheap wages provided an irresistible lure for American businesses.

           In observing the political history and the economic consequences of this anomaly, the Puerto Rican government has in a large way, acted as a Chamber of Commerce, serving corporate interests of mainland American industries, rather than a government, serving the people of Puerto Rico.


              The people of Puerto Rico have largely seen themselves as Americans, but different. They see themselves as having the same rights and responsibilities as people on American soil, but unless they ARE on American soil, they don’t have American rights or protections.


        Neither their local government, nor the Congress in Washington, are actually representing the PEOPLE of Puerto Rico, just the tax benefits American businesses can receive in exchange for temporarily hiring underpaid Puerto Rican labor.  It is a nonsensical existence in a modern world.

A Land of Sugar, A Land of Labor

          The Foraker Act of 1900, passed by the United States Congress, allowed for the governorship, Executive Council and Supreme Court all to be appointed by the United States president. Puerto Ricans could elect a lower house.

            But a primary purpose of this law was to prohibit Puerto Rico from negotiating trade agreements with any foreign country. It prohibited tariffs or import/export regulations. All laws passed, regarding Puerto Rico’s taxation, land use, trade, governance, had to gain U.S. Congressional approval – and there were no representatives or senators of Puerto Rico, in Congress. But Puerto Rico has a Resident Commissioner without voting rights.

By 1930, 94% of trade was with the United States, and with American goods sold in Puerto Rico roughly 15% higher than the same goods sold on American soil, a budgetary imbalance was created that exists today.

           The first governor, Charles Herbert Allen was appointed by President William McKinley in 1900.

          Allen remained governor for only sixteen months, but during that time, he installed a government with over 600 Americans in all positions of governing power. He created the Hollander Bill created a property tax too high for most Puerto Ricans. Hurricane Ciriaco, striking Puerto Rico for 28 days in 1899,  forced Puerto Rican farmers, unable to pay the taxes, to mortgage their lands to U.S. Banks which Allen had installed.

          Agencies he established with American administrators, assigned rail, road, port, water, land rights to Americans.

          Allen granted no-bid construction contracts to construction agents who used his father’s company (his father had a Boston construction company) for imported supplies. When Allen returned to the United States after 16 months, he immediately became Vice President of the Morgan Trust and Guaranty Trust banks in New York. From New York, using land in Puerto Rico that he and his friends had purchased cheaply from the banks he installed, he built the largest sugar syndicate in the world by 1907, the American Sugar Refining Company, which is now known as Domino Sugar.


          The sugar industry, built and controlled by American interests, provided as much as 95% of the sugar used in the United States by early 1900. Because need for sugar cane crops by these corporations, by 1936, only 7% of the arable land in Puerto Rico was owned by Puerto Rican farmers, and because of property taxes that forced landowners to mortgage their land, Puerto Rican farmers owed $25 million to U.S. banks.  Cuban sugar production which had been the dominant supplier to the United States in the late 1800s, was replaced by Puerto Rican sugar production because of American corporate ability to control the land.


            In 1917, the Jones-Shafroth Act was passed granting Puerto Ricans U.S. citizenship. It was passed by the U.S. Congress and created a similar governing system for Puerto Rico to the United States, but with explicit approval by the U.S. Congress. The governor of Puerto Rico was appointed by the President of the United States until 1948. The Jones-Shafroth Act superseded the earlier Foraker Act of 1900.


          The Jones-Shafroth Act was passed in March of 1917 and in April of 1917 (one month later), the United States entered World War I, Puerto Rican (now American) citizens, were eligible to be conscripted to fight in the United States military. 20,000 Puerto Ricans fought in segregated military units in the First World War.

Legislation by the United States Congress

            Passage of the Jones-Shafroth Act served multiple purposes: while it created a form of government similar to the United States, and allowed officials to be elected locally,  any legislation passed by Puerto Rico could be vetoed by the U.S. appointed Governor, the President of the United States.  The United States Congress maintained control over all fiscal and economic matters. Congress exercised control over mail services, immigration, defense, foreign trade agreements and import/export. Essentially, it allowed Congressional members grant favors to their cronies to loot Puerto Rico if they so desired. Also, as newly minted American citizens, once America entered World War I a month later (April 6, 1917), it allowed Puerto Ricans to be drafted into the American military. They served in segregated military units.

            In 1920, the Merchant Marine Act (also known as the Jones Act, although, in relation to Puerto Rico is often confused with the Jones-Shafroth Act) was created to establish a Merchant Marine for the United States. But a Section 27, was included to deal with cabotage (the carrying of goods transported between U.S. ports). This section of the Jones bill, mandates that all goods transported between U.S. ports must be carried by American constructed, owned, operated, crewed ships. While this is not a problem for the transport of goods between Kansas and Missouri, Puerto Rico, Hawaii and Alaska are affected, and since much of America is continental, America does not have a large number of shipping companies that transport between “local” traffic areas.


The unintended consequence of this protectionist law, passed in 1920, was that islands, and distance American destinations, had to pay the prices American shippers demanded. Puerto Rico’s overall costs for goods between American ports, and Puerto Rican ports varies between 29-89% higher than costs in the United States for consumers and businesses. This impacts the Puerto Rican economy today, and is a contributor to their existing debt.


           From 1900, when Puerto Rico came into American economic control, it had been an agricultural society transformed by American corporate interests into one vast sugar plantation.  Through the 1920s until the 1940s, there was strong interest in Puerto Rico’s independence. But during the 1930s, the son of the founder of several newspapers, the Unionist Party and a Resident Commissioner of Puerto Rico, Luis Muñoz Marín was raised both in Puerto Rico and the United States. Initially supporting much of the public sentiment for Puerto Rican independence, Marín began working politically through multiple political parties and changing his perspectives. While others, including Pedro Albizu Campos (also educated in the United States at Harvard), instigated for independence resulting in several organized protests that ended in police massacres, Marín began lobbying against a series of bills introduced in the U.S. Congress (1936, 1943, 1945)  by Sen. Millard Tydings (D-MD), that would grant independence to Puerto Rico.

           Reasoning that independence without an economic base would be a disaster for Puerto Rico, Marín was expelled from the Liberal Party (he had already left the Unionist Party, the Socialist Party and the Puerto Rican Nationalist Party), he started another party before settling on the Partido Popular Democratico (PPD), and using that organization, eventually rose to President of the Senate in Puerto Rico. Using his influence in Washington, his relationship with the last U.S.-appointed non-Puerto Rican governor, Rexford Tugwell, and his position as President of the Senate, he advanced legislation to move Puerto Rico from an agricultural economy wholly owned and controlled by American interests to an industrial one (controlled by different types of American interests).

An Island Gagged and Bound

In 1947, a bill was passed by the U.S. Congress allowing Puerto Rico to elect their own governor.

               Puerto Rico democratically elected its first governor in 1948, Luis Muñoz Marín who had been the President of the Senate. Marín used his fluency and connections with the American political powers to advance his view of Puerto Rico.         

            Deeply invested in Puerto Rico’s economic growth through American corporate investment in the island, he worked to create tax incentives in both the United States Congress and the Puerto Rican legislature. Playing to America’s fear of socialism and communism, he discouraged independence and statehood, pushing, instead of a Commonwealth status that didn’t allow Puerto Rican representation in the United States (he already represented Puerto Rico), but also didn’t subject Puerto Rican American citizens to federal taxes.



          In 1950, Law 600, (also known as the Puerto Rico Federal Relations Act of 1950) Puerto Rico was allowed to elect their own government and “self-govern,” but under the full jurisdiction of the United States Congress. The elections and “self-government” was illusory, In 1952, Puerto Rico created the Constitution of the Commonwealth of Puerto Rico.

          The Ley de la Mordaza (a gag law) passed the legislature on May 21, 1948 and was signed into law on June 10, 1948, by the U.S.-appointed governor of Puerto Rico, Jesús T. Piñero.  It closely resembled the anti-communist Smith Act passed in the United States, and was perceived as an effort to suppress opposition to the PPD and the independence movement.




          Under the “gag law”  it became a crime to own or display a Puerto Rican flag anywhere, even in one’s own home. It also became a crime to speak against the U.S. government; to speak in favor of Puerto Rican independence; to print, publish, sell or exhibit any material intended to paralyze or destroy the insular government; or to organize any society, group or assembly of people with a similar destructive intent. Anyone accused and found guilty of disobeying the law could be sentenced to ten years’ imprisonment, a fine of $10,000 dollars (US), or both.


          During the 1950s, Marín worked closely with the Federal Bureau of Investigation and the National Guard, using Ley de la Mordaza suppress calls for independence, labor union organization, and any suggestions of socialism. In 1953, Fidel Castro took control of Cuba, and America’s abject fear of communism and socialism had been heightened by Soviet Russian, Communist China, and revolutions throughout Latin America and Asia. America needed a buffer against Cuba and a growing wall of socialist governments springing up in South and Central America, and the Caribbean.   Marín was seen as an important ally, and provided complete American support and publicity for his proposals and programs. The United States Congress became a huge benefactor and advocate for Puerto Rico’s “capitalist” success.   While military bases in Puerto Rico had begun with the landing of American troops during the Spanish-American War, as America began anticipating entering the Second World War, millions of American dollars poured into Puerto Rico as naval, air force and coastal bases were constructed. This heavy military presence remained until the 1980s.         

           13 significant military bases and another dozen smaller footprints were located in Puerto Rico, providing the economic benefits of land leasing and the money military personnel added to Puerto Rican coffers.




          In 1947, the Marín-proposed Industrial Incentives Act was passed in Puerto Rico. Known as Operation Bootstrap, it gave  private foreign (United States) corporations tax exemptions from local taxes (they already had tax incentives from the U.S. Congress), property, excise, municipal taxes, raw materials and industrial licenses, and being exempt from the union wages of workers on the mainland, U.S. corporations flocked to Puerto Rico.

          This created several unexpected problems. While manufacturing jobs had increased substantially, agricultural jobs (which employed more people) had declined even faster. Without a tax base, the government was unable to determine it’s own direction. Thousands of jobs disappeared, and Puerto Ricans who were U.S. citizens, migrated to New York, and Florida.

          In 1950, Puerto Rico’s average wage was 28% of workers in the continental United States. Corporations could pay 25% of the wages of America, zero taxes and no importation tariffs. Puerto Rico would receive jobs which, when cheaper labor was found in Asia, disappeared with the corporations. Playtex and Shick left. In 1965, the United States Congress created special tax exemptions for the petrochemical industry. Phillips Petroleum, Union Carbide, Sun Oil were some of the companies that rushed to build and open facilities, but all left in 1973 when the OPEC oil embargo went into effect.



          In 1976, Congress passed 26 US Code § 936, another tax credit incentive for businesses to operate in Puerto Rico. The pharmaceutical industry moved operations to Puerto Rico. Between 1980 to 1990, Johnson & Johnson, Smith-Kline Beecham, Merck & Co. , Bristol-Myers Squibb saved over $3.5 billion in taxes by manufacturing in Puerto Rico rather than the continental United States.

          By 1996, criticism of 936, the United States Congress repealed the tax breaks to corporations operating in Puerto Rico.  Over a ten year period all corporate tax breaks gifted by the United States Congress to American corporations, were gradually repealed, 

          By 2006,  various American corporations and capital-intensive industries operating in Puerto Rico solely for the tax breaks, including pharmaceutical companies had left Puerto Rico. The Puerto Rican government currently exists on bonds that have to be repaid,  to continue functioning. A debt that ballooned to $123 billion by 2016.

          Puerto Rico, whose legislature,  had also gifted American corporations with tax breaks and had existed on personal income tax of employees while corporations were employing citizens, had NO tax base, with corporations gone and a high unemployed population.



           Bills introduced in the United States Congress, were introduced for Puerto Rican independence in 1936, 1943 and 1945. Each bill had transitional aspects that allowed for tariffs that didn’t exist for Puerto Rico as a territory, be imposed in increments until Puerto Rican imports into the United States equaled every other country. The bills introduced in the United States Congress were introduced by Sen. Millard Tydings andwere similar to bills he introduced that led to independence for the Philippines, the geographical differences between Philippines and Puerto Rico, eventually created different results.

          Corporate, political and military interests opposed Puerto Rican independence for different reasons.  Corporate America wanted the cheap labor market of a dependent Puerto Rico, political and military America needed a buffer against Cuba and a growing problem of socialist governments springing up in South and Central America, and the Caribbean.



After the Party’s Over: Fiscal Urgency and a String of Natural Disasters

         The United States Congress appointed a Fiscal Control Board (FCB) in 2016, that would oversee the restructuring of this debt. FCB created a fiscal austerity plan in May 2017, cutting into most public services to repay creditors.

             Historically, austerity plans do not attract revenue generating businesses, but cut programs and infrastructure that businesses need to grow. Cost-cutting generally work if businesses and governments are bloated or attempting to get through a specific problem.

          In early September 2017, Hurricane Irma glanced off Puerto Rico as it cut through the Caribbean.

          On September 20, 2017, Category 5 Hurricane Maria made landfall on Puerto Rico as a Category 4, but destroyed much of the electrical power grid and  infrastructure, and left almost 3,000 dead.


          The American President, visited Puerto Rico and declared that America had done a “great job” with the rescue of and aid to Puerto Rico, while complaining that Puerto Rico had an enormous debt, and implying that Puerto Rico was a burden on America.      

          Donald Trump threw rolls of paper towels into a crowd, perhaps suggesting that they clean up the mess themselves.

          The lack of understanding of Puerto Rico’s situation, both fiscally, and regarding emergency responses, does not begin and end with Donald Trump.       Few Americans, few Congressional Representatives, few Senators and few of the American public, understand how collusion between unwitting elected officials, and misguided (or corrupt) elected officials on two sides, can have dire implications for any society – but Puerto Rico illustrates how and why.


          Putting aside humanity, ethics and morality, the islands of the Caribbean are of economic and strategic military importance to the United States. A real reason Caribbean islands with attachments to foreign powers cannot get aid or economic traction, is their physical proximity to the continental United States. The United States views any closeness to  foreign adversaries with concern.

The United States viewed Soviet aid to Cuba (both economic and military), as a direct threat in October 1962.

          Puerto Rico was transferred to the United States as a territory at the same time as Guam and Philippines, in the 1898 Treaty of Paris. Cuba attained independence from Spain during the same Spanish-American War. But Cuba and Puerto Rico have a proximity to the United States that Philippines and Guam don’t have, which has given American business and military interests a particularly intense focus on whichever direction Cuba and Puerto Rico leans.


          If the United States wishes to keep powerful foreign powers from islands close to American shores, than the United States needs to invest more into the well-being of those islands, rather than attempting to keep foreign powers away (and preventing island governments from courting foreign investment).

The United States is both uncomfortable with global powers providing economic aid and investment to Caribbean disasters, but are unwilling to provide economic aid, growth and stability. When American had great stakes in Puerto Rico, America was willing to give tax breaks, but America has never been willing to contribute or develop the infrastructure for Puerto Rico to develop their own internal corporate economy.


Economically functioning societies do not create vast migrations, yet Puerto Rico, whose citizens could not elect their own government until the 1940s, has had multiple migrations. Between 1950 and 1965, over 500,000 Puerto Ricans migrated to the continental United States.

Puerto Rico’s economic health has historically been almost entirely dependent on American corporate interests (as opposed to Puerto Rican owned, operated and based companies) from the early 1900s. Between the Jones Maritime Act and the need for Congressional economic and political approval, more than 90% of Puerto Rico’s export and import economy is generated through the United States.




          Essentially, Puerto Rico has been governed and managed by United States corporate and Congressional interests, FOR United States corporate and Congressional interests since it’s transfer from a Spanish colony to a territory of the United States.

   As a territory (as opposed to either a state or an independent country), Puerto Rico has not been able to choose leaders, policies, directions or cultivate international relationships without the approval of the United States Congress and their banking, agricultural, corporate or military interests.


   Because of this history (and because America never intended on becoming an imperialistic colonial power), the United States owes Puerto Rico the opportunity of either becoming the 51st State, or an independent nation with favored status.


The United States has control over 14 territories and the federal District of Columbia. All of these areas are under the “exclusive” or “federal” jurisdiction of the United States Congress (but none of these districts or territories can elect, or otherwise compel Congress to act on their behalf). Besides the District of Columbia, the other territories are: American Samoa, Guam, Northern Mariana Islands, Puerto Rico, the U.S. Virgin Islands. The other territories are uninhabited islands.

            Most of the territories have relatively small populations, but the District of Columbia has a greater population than Wyoming, or Vermont, and Puerto Rico has a larger population (therefore greater needs) than 19 states (Alaska, Arkansas, Delaware, Hawaii, Idaho, Iowa, Kansas, Maine, Mississippi, Nebraska, New Hampshire, New Mexico, North Dakota, Rhode Island, South Dakota, Utah, Vermont, West Virginia and Wyoming).


            We are focusing on Puerto Rico because an economic model based on a colonial template has left societal shell of an economy that will struggle to be able to renew, replenish, restore or endure.

          Puerto Rico is neither an island that was allowed to make choices of independence, or make independent choices. It was treated like a franchise without a contract that equally benefited the franchiser or franchise. Curiously, while other American Territories have become states: Louisiana, Washington, Oregon, Texas, Florida, Montana, North and South Dakota, Iowa, Missouri, Oklahoma, Kansas, Nebraska, Missouri, Wyoming, Idaho, Nevada, Utah, New Mexico, Arizona, California, Alaska and Hawaii, Puerto Rico has been unable to obtain statehood.  Without statehood, Puerto Rico does not have the representation necessary to create the broad tax base necessary to establish a sustainable recovery.


             Puerto Rico is unwanted and ignored because it is an embarrassment. It is colonialism, which America never wanted to participate in. It is abdication of responsibility, and a hindrance of allowing people to represent, govern or determine their own future.


          Regarding tax breaks for jobs: nothing lasts forever. Opportunity is only fleeting. Whatever is here today may be gone tomorrow. Individuals look for jobs today the same as they looked for nuts and berries 3000 years ago. Individuals, and corporations look for something today, and leave for greener pastures if the nuts and berries become scarce.    Governance is the only entity responsible for a physical place today, tomorrow and forever. And THAT is what we should measure when we measure the qualities of our leaders. We will always question why we should pay for someone else, or somewhere in the future – but our governance need to forge ahead with a vision of stability, solid ground, clean air and water, and possibilities for 20, 30 or 100 years in the future. That is not micromanaging industries or a government inserting itself into business or individuals, it is responsibility to something that we, as individuals or corporations do not have the interest, or ability to envision.

How to Squeeze Out the Last Drop

     A summary of the laws passed or approved by the United States Congress and how they’ve affected Puerto Rico:




1 – The Foraker Act of 1900 which established that governing of Puerto Rico would be from officials, including governor, appointed by the President of the United States and the U.S. Congress.



2 – In 1900, the first Governor of Puerto Rico appointed by the President of the United States, Charles Herbert Allen, stays 18 months but fills the administration of Puerto Rico with American cronies including appointing Jacob Hollander Treasurer in Puerto Rico. Creates the Hollander land tax, on all Puerto Rico property of greater than $100, forcing most Puerto Rican landowners to take mortgages to pay the tax with U.S. banks which Allen had allowed to open in Puerto Rico



3 – The Jones-Shafroth Act of 1917, superseded the Foraker Act of 1900, established a Senate and bill of rights in Puerto Rico, allowed a Resident Commissioner to be elected and granted United States citizenship to the people of Puerto Rico.



4 – The Merchant Marine Act of 1920 regulated the movement of goods and services between American ports to vessels owned, operated and built by Americans. This act was called the Jones Act (also), and most directly affected Hawaii, Alaska and Puerto Rico.



5 – Puerto Rico was included in Franklin Roosevelt’s New Deal at the urging of Luis Munoz Marín from 1933-1939, while Marín lobbied against passage of the Tydings-McDuffie Act in 1937, which would have granted independence to Puerto Rico. Every political party in Puerto Rico had supported it, but Marín had connections in Congress and the bill was defeated.



6 – In 1947, the legislature in Puerto Rico passed the Industrial Incentives Act eliminating all corporate income tax in Puerto Rico. Proposed by Marín who had been expelled from all political parties after his lobbying to defeat Puerto Rican independence, but starting his own political party and becoming President of the Senate in Puerto Rico, this act established the Puerto Rico Reconstruction Administration which encouraged the establishment of factories in Puerto Rico. This Act became known as Operation Bootstrap.



7 – The Ley de la Mordaza (a gag law) passed the Puerto Rican legislature on May 21, 1948 and was signed into law on June 10, 1948, by the U.S.-appointed governor of Puerto Rico, Jesús T. Piñero.



8 – The Elective Governor Act was passed by the United States Congress and signed by Harry Truman in 1948, allowing Puerto Rico to elect their own governor.



9 – Public Law 600 (Puerto Rico Federal Relations Act of 1950) allowed Puerto Rico to write their own Constitution, but it had to be approved by the U.S. Congress. By 1952 it was approved both by voters in Puerto Rico and the Congress in the United States.



10 – In 1976, Section 936 of the U.S. Tax Code (Possessions Tax Credit) granted U.S. corporations a tax exemption from income originating from U.S. territories. In addition, Puerto Rican tax code allowed 100% deduction of dividends paid to foreign entities that owned more than 80% of Puerto Rican subsidiaries. U.S. corporations could locate subsidiaries in Puerto Rico and pay no taxes either in Puerto Rico or the United States.



11 – In 1996, the Small Business Job Creation Act phased out those tax credits which ended in 2006. Corporations pulled out and relocated to other countries, leaving Puerto Rico with increasing joblessness, and no tax base to build an infrastructure that might attract alternative businesses.



12 – In 2016, the appointment, by the United States Congress, of a Fiscal Control Board, overseeing the enormous debt of Puerto Rico.



13 – By March, 2020 only $1.5 billion allocated to Puerto Rico for recovery had been disbursed . . . from an allocation of $20 billion from the American government. Payments have been slow walked, on the American side, and there are suspicions of corruption, awarding contracts to incompetent cronies, and mismanagement of funds on the Puerto Rican side.