Part IV
The Sales Pitch
Governor Charles Herbert Allen
The fourth and last essay of this series is ambitious; it intends to provide some reasoning on how and why Porto Rico turned into a location for financial capital interests in the Unites States, as well as how and why Charles H. Allen turned into a Sugar Baron. I can reasonably argue that the conditions were favorable for investments to yield well and that Governor Allen improved the possibility of profit: he devalued the coin of the land and the value of property, refused to help devastated agriculture, kept the population impoverished so as to have cheap labor and took advantage of the US as an open market.
The First Annual Report makes it painfully clear that he was fascinated with the natural beauty of the Island and came to terms with its extraordinary potential for economic exploitation, given its strategic geographic location and natural resources.
In his Report he wrote:
The island’s beauty caught the Governor’s capitalist eye.
“With such a geographic situation, and such a soil and climate, surely this Island has little to be vainly looked for by continentals seeking a winter residence or an ideal spot for the successful pursuit of horticulture or agriculture in its most pleasing aspects. (p. 30 of the report)
“It is perfectly feasible that, while developing the immense agricultural resources of the the Island, at every seaport factories may be established and nothing other than manufactured products leaving the coasts. We can sell the world not only coffee ready for consumer use, but refined sugar, molasses, rum, cigars, fine leather, shoes, chocolate and all its products, canned fruits equal to those purchased in Havana, cotton goods of all descriptions, fine leathers, shoes, harnesses, chocolate and all its products, canned fruit equal or superior to the best preserved in California, and many other necessaries and luxuries which will bring, in return, profits sufficient not only for the population of one million people we have now, but five times as many.” (p. 37-38)
“Reliable statistics show that the yield of an acre of sugar cane is greater that any other country where it is grown, except Hawaii and Java, and it comes close to those. But, the production cost per ton is $10 cheaper than in Java and $12 less than Hawaii, $17 less than Cuba, $19 less than in Egypt, $19 less than in the British Indies and $47 less than in Louisiana and Texas.” (p. 39)
By keeping Puerto Ricans impoverished, the Governor created a cheap labor pool for his sugar cane empire.
The possibilities of agriculture in Porto Rico can be estimated roughly from the foregoing discussion. There is no reason why this Island should not become in the near future a real garden, as carefully and closely cultivated as Holland and as productive as the [Louisiana] valley of the Teche. With capital and American methods, the labor of the natives can be utilized to the lasting benefit of all parties and the general good of the commonwealth. (p. 41)
“Manufacturing in this island is almost unworthy of mention… commerce is in an infant state… seen together these condition of internal and external commerce are not discouraging and we look to a better future with confidence.” (p.42)
First up a banking system in San Juan to reassure American investors.
“Although it has been decided by the Attorney General of the United States that the national banking act in now in force in Porto Rico, no person or association has taken advantage of it to establish a national bank here. There can be no doubt that establishment of a national bank at San Juan, by increasing the confidence of American investors, by establishing a more perfect communication between the island and American financial centers, and by affording the National Government additional facilities for the deposit of Government funds, would be of great benefit for the country. (p. 66)
“All in all, the financial outlook of Porto Rico is as promising as its present condition is gratifying. An example of stability and integrity has been established in financial operations of the island, and a wise and equitable revenue system has been adopted which is not only adequate for present requirements, but possess elasticity with respect to the future.” (p. 70)
As to be consistent with the period’s prejudice, the Report also includes the following “beauty”.
The Governor fantasy was that the island’s beauty made everyone lazy and unmotivated.
” While the more educated and cultures have qualities of great usefulness, there has been so little future for the masses and they have never realized opportunities for development in their native land. Part of this is due, no doubt, to climatic conditions. Nature has done so much for these people and has required so little from them that the problem of life has been free from those terrible anxieties which possess the souls of the toilers of other climes and those very inexorable demands to develop qualities of thrift, industry and perseverance which underlie individual as well as national prosperity.” (p. 98)
I have done it again, I know, too many quotes. The citations included are included for being revealing of typical colonialist idiosyncrasy and the way to intervene. The Governors Report is the bell’s call to profit. Being a man of wealth in Wall Street at the time, how would you respond the eloquent rhetoric of the governor? Even more so, when he left a regiment of 600 appointees to facilitate the take over. Morgan Trust made him vice-president, a position from where he consolidated the American Sugar Refining Company which in 1907 was the largest sugar syndicate in the world.
Workers that once created a self-sufficient agriculture for the island now worked to export sugar.
The policy of a single crop destroyed the self-sufficiency of agriculture that allowed us to be nutritionally self sustained. In 1930, 45% of the yielding soil was dedicated to sugar cane, in 1934, 80% of refined sugar was property or closely connected to the Syndicated Banks of the United States, who were also owners of the postal system, the railroads and the principal ports.
There should be no doubt that governor Allen went through a significant transformation in Porto Rico; that the beauty of this tropical paradise open the eyes of the profiteer that laid dormant under the bureaucrat in him. The lesson he learned in Puerto Rico took him to the top of financial prestige and wealth. Here he aligned with greed when he should have been compassionate, he learned to strangle and oppress when he should have been curious and generous, he turned eyes to his friends and associates when he should have been respectful of our talents. Here he acquired the morals of a capitalist. We are truly a land of inspiration!
It brings us back to the words of Brigadier Davis the day of Allen’s inauguration:
On the day the Governor was inaugurated Puerto Ricans could not imagine what was in store for them.
” I bring you the message of the President, and I place myself in full accord with it, that it is his intention to give you, so far as all officials are concerned, whether selected from your own numbers or from the United States, men of character and standing, who are enthusiastic, and diligent and industrious; men of highest sense of honor, who will not seek to advance their own fortunes at your expense and will not allow others to do so; men who will see that straightforward honesty will be meted out to all, and who will have a sole regard for the welfare of Porto Rico and the honor of the American Government in its relation to it.” (p. 418)
And with that, my friends, I rest my case.
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Copyright 2015 by José Umpierre. Photo of old San Juan copyrighted by José Umpierre. Hammock photo used as”Fair Use.” All other photos are in the public domain.