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Mr. Cramer. May I say about the handcraft work that we started it about 1932. At that time the local government made a loan of $5,000 to what was called a cooperative. This money was used to teach people to do handcraft work and to buy materials on which to work. And then we ran a store and sold these goods to tourists and others. In the first year the turn-over was very, very small. For 2 or 3 years it was very small, but last year it amounted to $30,000. And that is merely basketry and knick-knacks of one sort and another, sold mostly to tourists that brought in $30,000 to the people of the municipality.

AVAILABLE HOTEL ACCOMMODATIONS AND PROMOTION OF TOURIST

TRAVEL

Mr. Scrugham. Will you please amplify your statement by telling what you have done in order to promote travel?

Mr. Cramer. In St. Thomas wo have built a hotel. We took over what was called the Bluebeard Castle. Some 5 years ago money was made available to take it over. But it was not untU the P. W. A. allocation was made that the hotel was finally built. Last year the hotel was very successful. We had to turn away more than 100 people who wanted to stay in it. Unfortunately it is small. But the allocation was made of which I spoke a little while ago to add to that hotel. Its capacity will be increased about 60 percent. It does not mean that only people who stay at the hotel are attracted to the place, but it means that others who know that there is a hotel will not check St. Thomas off their list. As a result we have had a very considerable increase in tourist travel.

This year it has not worked as well as it did last year for some reason or other. We had to turn away so many people last year that we think possibly word has gone out among the agencies, and some people who might otherwise have come to the islands this year, have not done so.

Mr. Rich. How do their rates compare with the rates at other places down there?

Mr. Cramer. Last year we had a rate of $6 a day for everything, food and lodging, which we have changed somewhat this year. For our best rooms now, the rates are $8 per day.

Mr. Rich. And that is on the American plan?

Mr. Cramer. Yes, sir; that is on the American plan. Whether or not the increase in rates this year has had any effect, I do not know. I am investigating that right now.

Mr. Rich. When folks come in there you can take care of only 80 people, you say?

Mr. Cramer. We can take care of 80 to 100 people.

Mr. Rich. If they had 100 people on the boat they could not stay there because you could not take care of them?

Mr. Cramer. We do not have tourists of that sort coming to the islands as yet. Our people are tourists who come on these large boats which go from New York, let us say, to St. Thomas and then down to Caracus and Kingston, and so on, and back up here. They remain in the port only 4 or 5 hours.^ But we have winter residents who do use

the hotel. And we also have a good deal of communication with Puerto Rico. A lot of Puerto Ricans come over there; and we ha^ salesmen and people of that sort who come in and spend a few days

ENTERTAINMENT FOR TOURISTS

Mr. Rich. What do you do in order to interest those people who come there and remain from one boat until the next?

Mr. Cramer. I suppose we have as delightful swimming as you can find anywhere in the world. And we havo sailing and fishing. Unfortunately we do not -have a golf course any longer. We need one and should like to get the funds with which to buy the land, but so far we have not been able to do so. And people go horseback riding, they can play tennis, and do things of that sort.

Mr. Fitzpatrick. What is the sailing time from New York?

Mr. Cramer. On boats that touch there regularly it is 4J£ days.

Mr. Scrugham. You mean each way, do you?

Mr. Cramer. Yes, sir; that is each way.

Mr. Scrugham. What is the sailing time from New York to Bermuda?

Mr. Cramer. That is 2% days.

Mr. Fitzpatrick. It is about 44 hours for making it now. It was 48 hours since they have reduced the time.

Mr. Cramer. The Pan-American Airways go from Miami to San Juan in 6 or 7 hours. From there to St. Thomas it is only 1 hour on their planes. So you can make it in 10 hours.

Last year was the first full year of operation of the hotel. So many people came that we had to turn them away. We did not dare invite any more. But this year it developed we do need to do something. One of the things we can do to stimulate tourist travel to the Virgin Islands, and I think that bill is on its way now to the Speaker of the House—at least, I hope so—is to restore a privilege that we had there last year.

AMOUNT OF DUTY-FREE GOODS BROUGHT INTO THE UNITED STATES FROM THE VIRGIN ISLANDS

You will recall that under the Tariff Act in the past it has been possible for a person to buy $100 of foreign goods—that is, a tourist might-—and bring them back as personal baggage for personal consumption into this country without paying any duty. Last year that provision was amended to exclude liquor, except for 1 gallon. That change very seriously hit the tourist trade in St. Thomas.

CLIMATE OF VIRGIN ISLANDS

Mr. Rich. How does the weather there compare with what we have here and with that at Bermuda?

Mr. Cramer. I would say that the Virgin Islands have an infinitely better climate. I have heard that from people who have been to both places. I cannot say that I have spent any time in Bermuda myself.

Mr. Greuning. The climate of the Virgin Islands is infinitely superior.

RECOMMENDATION THAT $100 WORTH OF LIQUOR BE PERMITTED DUTY

FREE

Mr. Cramer. What I would like to have done, if Congress in its wisdom will do it, is this. They certainly can help our tourist trade greatly by restoring to the Virgin Islands only the privilego that we

use to have and which we shared with British possessions and other possessions, to permit people who came to the Virgin Islands to buy liquor and bring back $100 worth of liquor free of duty. That will attract tourist business and tourist boats which now go to Caracas or the British and other possessions.

Mr. FitzPATRICK. How much can you bring in from the Hawaiian Islands?

Mr. CRAMER. They are under the l'nited States tariff, but we are not. We have a local tariff. It used to be the tariff under the Danish regime. When the islands were taken over Congress made that same tariff effective for the Virgin Islands, and then provided that goods produced in the l'irgin Islands might be admitted free of duty into the United States.

Foreign liquor may be brought into the Virgin Islands under the local tariff. There is a 6-percent duty. The local government, of course, obtains that revenue. So long as the tourist had the $100 exemption to bring foreign liquor into the l’nited States, because he brought it with him for his personal consumption, he could bring it in free, and the Virgin Islands were getting a great deal of money from this 6-percent import duty on the foreign liquor. But last year (Congress changed that and now a person can bring in only a gallon. I would like to have the $100 exemption restored to the Virgin Islands, but only to the Virgin Islands,

Mr. FITZPATRICK. That is on their own domestic rum?

Mr. CRAMER. No, sir; on the foreign liquor that may be available in the islands.

Mr. FITZPATRICK. You say with the small duty on the liquor going to the Virgin Islands there ought to be an exemption on your domestic rum?

Mr. (RAMER. That comes in duty free entirely.

Mr. FITZPATRICK. That is what I thought, that it should come in free.

Mr. (CRAMER. But the point I want to make is that if you give us in the Virgin Islands a special advantage so that the people can come there and instead of being able to buy only 1 gallon of liquor they can buy $100 of liquor and bring it in duty free, the boats which now go all over the map in the ('arribean would come in there because of that special advantage.

Mr. Rich. Then we would have that foreign liquor competing with our manufacture, and that would be wrong.

Mr. ('RAMER. At the same time, you do have the situation that you have about 12,000 tourists coming into the Virgin Islands. The biggest season we had was a year ago and we had 12,000. We estimate that each tourist spends about $10 in taxi fares, bashetry, and one thing or another. Whatever he buys, he spends about $10 on the average. That means $120,000 coming in from tourists from the outside, which helps the local situation there. It means that the l'nited States Government does not need to put that much money, at least, into the support of the community.

My contention is that if you give that special advantage to the Virgin Islands and do not rretore it to Bermuda or to the Batash West Indies or the Dutch West Indies, that the tourist ships, instead of skipping the Virgin Islands, will stop there, and they will buy hquor and all of the other things that are available.

Mr. Rich. If we were just looking at it from the point of view of doing the best we could for the Virgin Islands, as you are as Governor, I would say, yes. But we are supposed to legislate for the benefit of the United States and also the Virgin Islands. But that would be doing an injustice to the people of the United States because it would be permitting foreign liquor to go to the islands almost free and then letting it come back into this country without a tariff to compete with our own manufactures in this country. And that would not be right.

Mr. CRAMER. You do that already, because you permit people to get a gallon. All that I am doing is asking you to raise the ante a

little bit.

Mr. Rich. Will not that gallon keep them wet from the time they get to the Virgin Islands until they get back?

Mr. CRAMER. You say there is no advantage to the United States; but I contend that there is because the tourist business brings new money into the community which helps to carry it. Not every tourist will buy $100 worth of liquor. Only a few of them do. They like to get this, that, and the other thing that is available on the shelves also. And all of the people who would come there would buy goods from the cooperatives. They would buy whatever is available in the community and might incidentally buy liquor.

Mr. FITZPATRICK. They do that now, do they not?

Mr. CRAMER. Yes, sir; they do. But there is no special attraction for them.

Mr. Rich. All of these other ships that are carrying passengers would go over there so as to let them bring in $100 worth of foreign rum, that is, to bring it into our country to compete with our distilleries in this country? You could argue here for a year but you would not convince me on that.

Mr. CRAMER. There is only one further point that I want to make. My contention is that if you permit some special advantage to be given to the Virgin Islands, then you may have enough income down there to take care of the recurring deficits and the United States Government will not have to contribute to them.

Mr. Rich. What you want to do is to develop your tourist trade so as to make it large enough so that the people of the Virgin Islands will get the money and not the foreign liquor dealers.

Mr. CRAMER. The people of the islands get it, of course, because they get the import duty down there, and the merchants get the sales, and the money goes back into the community and is used in the community down there.

Mr. Rich. But I cannot see that in a hundred years. Mr. GRUENING. At present our United States dollars are supporting the Government of Bermuda. And it is very prosperous today. It is all American money.

Mr. Rich. As you say, it is a fine place. You should make it so that the people of this country would want to go there. But let's not develop it by having foreign rum invite them over there.

Mr. CRAMER. We can take care of those who come in on the boats, the boats that stop there for 4 or 5 hours and then go on.

Mr. Rich. We want the people who will get off and then remain for 8 month. We want to develop your golf courses and a few other things and take the people down there instead of taking them to Bermuda.

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Mr. CRAMER. I would like to have that also. But the tourist business as a transient business is very important, because we estimate they spend $10 a head.

Mr. GRUENING. The maximum amount of importations would not have to be considered. Not everybody would take it. Perhaps 25 or 30 out of 600 people would buy $100 worth of liquor. But the others would buy handicraft work and spend money on other things while they are there.

Mr. Rich. If we have to develop the liquor business to get the people to go to the Virgin Islands we might as well give the business to somebody else.

Mr. CRAMER. It would increase our tourist trade by leaps and bounds. That is what I have in mind.

Mr. Rich. You ought to start developing your islands.
Mr. ('RAMER. And I think, you can help us in doing it.

Mr. O'NEAL. The danger would be in letting the ships go in just to buy the liquor, so a man could go there and get it and then ship it back, to this country without paying any duty.

Mr. Rich. You would have folk making a trip down there just to buy the rum and then ship it in here.

Vlr. CRAMER. All you are doing is giving a small additional advantage. What I have in mind is in connection with goods for personal consumption and getting tourists to come to the islands.

Mr. GRU'ENING. As these cruises are made out there is not a great deal of difference as between the islands. They have some 25 or 30 ports to choose from - Barbados, the Bahamas, and so on; and Cuba and Puerto Rico have the monuments of the ancient Spanish civilizs. tion to attract tourists. While we deem the Virgin Islands to be very beautiful there is nothing there that is particularly different to warrant cruise ships stopping there. If we can give them this advantage of this exemption, that would be a factor in connection with practically every cruise company. They would say that "here is a port where you can buy something that you cannot buy at any other port on the ('arribean."

Mr. Rich. They would run their ships over there and advertise the fact that you could go there and get $100 worth of liquor, and then people would go there and buy the liquor and sell it without paying any tax.

Mr. CRAMER. But it would have to be for personal use only.

Mr. Rich. If you come in with $100 worth of liquor you personal friends would get the personal use out of it.

Mr. ('RAMER. And, of course, Bermuda made a great deal of money out of it last year. And right now one can bring in 1 gallon under the law.

Mr. GRLENING. I think it can be argued that hundreds of people would buy only 1 gallon in Bermuda, Barbados, Havana, and at other places; but they would not buy it there if they could buy a slightly langer quantity in the Virgin Islands and bring it in duty free. So I am not at all sure that you would be injuring the liquor business in the l'nited States, even to the extent that you sukkest.

Mr. SK RIGHAM. Are there any further questions to ask of Governor Cramer?

Mr. Rich. I have no other questions, I think he gave us a lot of information which is very vital. Ind I want to congratulate him on the manner in which he gave us the data from his memory. If he

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