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Military Rule Ends Although Hawaii's citizens, since the outbreak of war, had accepted with restraint and understanding a period of military rule unique in the history of the Nation, there was general satisfaction at the action of the late President in October 1944 by which the writ of habeas corpus was definitely restored, military authority over civilian activities was further limited, and the trial of civilians in military provost courts was discontinued. However, at the year's end, the 10 o'clock curfew was still in force and civilian mail continued to be subjected to military censorship.

In the Seventh War Loan drive, Hawaii again exceeded its quotas, leading the Nation in per capita sales.

Wartime Dislocations Acute Increasingly acute adult manpower shortages, estimated at 15,000 for the island of Oahu alone, and nonavailability of heavy machinery for the extension of mechanization continued to handicap the production of sugar and pineapples. Since the start of the war, sugarcane land in cultivation declined almost 30,000 acres, or about 12 percent. About one-fourth of these lands was taken for Army and Navy purposes and the remainder was abandoned because of wartime production difficulties. However, the diligence of the producers and the strenuous efforts of Hawaii's school children combined to keep the percentage of decline in production at a low figure compared with the percentage of loss of lands and labor.

Hawaii's fishing industry was virtually eliminated by the war, although, during the latter part of the fiscal year, the efforts of the Territorial Board of Agriculture and Forestry to reestablish the industry were beginning to show results and it appeared that substantially increased quantities of fresh fish would soon be available to Hawaii's people.

Territorial tax realizations, internal revenue collections, gross postal receipts and bank clearings for the year reached an all-time high, although the increase in nontaxable Federal land holdings and continued declines in revenues from gasoline and motor-vehicle taxes were the cause of concern to the county governments which depend for support on these sources of revenue.

Labor and material shortages combined to delay progress on a number of projects vital to the territorial welfare but the past year saw the completion of a 100-bed addition to Queen's Hospital and a water development project, both of which were partially financed with Lanham Act funds.

Little Wagner Act The regular biennial territorial and county elections which were conducted last year showed the largest vote in the Territory's history, indicating Hawaii's continuing interest in the processes of free democracy.

Hawaii's second wartime legislative session resulted in appropriations exceeding anticipated revenues by some $19,000,000, indicating the probable necessity for extensive postwar readjustment of Hawaii's fiscal affairs. Much progressive legislation was enacted and approved by the Governor, including requirements for premarital physical examinations and vaccination and immunization against certain diseases, a "little Wagner Act” sponsored by labor, acts strengthening and broadening the scope of the child labor and workmen's compensation laws, acts increasing benefits under the unemployment compensation laws and establishing higher minimum wages throughout the Territory. A veterans' council was established and given a generous appropriation and provisions were made for substantial expansion of the facilities of the University of Hawaii and for improvement of the pupil-teacher ratio in the public schools. An airport zoning law was enacted and a commission was created to study the feasibility of establishing & territorial system of health insurance.

PUERTO RICO Heading a list of legislative measures acted upon by the sixteenth Legislature at its first regular session, was Joint Resolution No. 1 requesting Congress to define the forms of political status “That Congress may be disposed to grant upon approval of any of them by the people of Puerto Rico." This resolution led to the Tydings-Piñero bill, introduced in Congress in May, which provides for a plebiscite on three forms of political status-independence, statehood, and dominion.

The Governor approved 328 bills passed by the legislature. Major appropriations included $17,500,000 for the Development Company, $15,000,000 for the Development Bank, and a total of $11,232,000 for the Insular Emergency Council (principally for the relief program).

New agencies created included: (1) the Puerto Rico Agricultural Company to encourage the maximum development of the agricultural resources of Puerto Rico; (2) the Coffee Insurance Corporation of Puerto Rico in the Department of Agriculture and Commerce; (3) the Aqueduct and Sewer Service to handle all public aqueducts and sewers in Puerto Rico; (4) the Puerto Rico Labor Relations Board; (5) the Office of Information for Puerto Rico; and (6) an Office of Puerto in Washington.

Estimated total receipts from all sources for the fiscal year were 17 percent less than the previous year. The decrease from the total receipts for the previous year was accounted for primarily by a sharp decline in rum exports which cut United States internal revenue collections returned to Puerto Rico.

Strike Delays Sugar Harvesti The sugar harvest was delayed over a month by an industry-wide strike early in the season. Nevertheless the sugar crop for the year ending June 30, 1945, was 886,100 tons, compared with 723,611 tons for the previous year. The grinding season is being extended through August by which time production for the crop year will probably total 960,000 tons. There was also an increase in the tobacco crop, from 285,000 quintals the previous year to a total of 400,000 for the current fiscal year.

The strike in the sugar industry, which lasted 36 days and involved 140,000 workers, was the most serious labor dispute of the year. It was adjusted when the Commodity Credit Corporation raised the sugar subsidy thus permitting employers to increase the wages of agricultural workers as well as those of mill workers.

The mediation and conciliation service of the insular department of labor disposed of 206 situations involving 353,510 workers, of which 54 ended in strikes involving 140,230 workers.

Birth Rate Increases The war emergency program has carried on two major types of work relief projects: construction, employing an average of 23,812 persons; and community service, employing 7,800.

The increase in enrollment in all Puerto Rican schools, during the school year, was 25,777, or 7.82 percent. Total enrollment was 335,179. The university had 4,250 regular students enrolled.

The death rate showed a slight increase, from 14.7 per 1,000 to 14.8, while the birth rate rose from 39.6 to 41 per 1,000.

During 1944 the public welfare division provided financial assistance to 27,797 persons.

Civil Service Strengthened The Civil Service Commission conducted a survey of the status of classified insular government employees and of personnel practices. Twelve thousand positions were described in job analysis sheets, duties and responsibilities analyzed, and the positions allocated to the classes established. A compensation plan was drafted which was enacted into law by the legislature and the salaries for all positions were fixed in accordance with the provisions of the compensation plan.

Industrialization Progresses The Development Company's glass container plant began operations in January 1945, though work was temporarily interrupted by

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a strike which occurred shortly thereafter. Substantial progress was made on other projects of the Development Company. A mill for the manufacture of pulp and paperboard was nearly completed. Contracts were approved covering machinery and engineering services to build a wallboard plant and a clay products plant. Pilot plants were established in textile design, basketry, furniture, and handiwork novelties, Studies were made of possibilities of establishing a cotton weaving and finishing plant, a shoe industry, and a meat-packing plant.

War's Impact Heavy The war toll in Puerto Rico in terms of an upset economy and increased human suffering was demonstrably large, especially in the 18 months following Pearl Harbor. The curtailment of shipping in 1942–43 brought the island to the verge of collapse. The extent to which the process of strangulation progressed is illustrated by the fact that civilian tonnage reaching the island fell from a normal 100,000 tons in January 1942 to a little over 7,000 tons in September 1942.

Fortunately, September 1942 turned out to be the low point. In the following months shipping to the island was gradually increased until, by the late spring of 1943, it could be said definitely that the crisis had passed.

The shipping shortage had drastic, immediate, and long-term effects. Of the three principal food items—rice, beans, and codfish-codfish was unobtainable for a considerable period, supplies of rice were exhausted for several months, and beans, throughout, were very scarce.

On the industrial side, the disruption of shipping had an immediate and serious effect. Lacking space to bring bottles down and send bottled rum back, the rum industry faced complete stoppage for the duration. This was averted by the use of small boats. The volume of needlework fell off from a value of $10,646,000 in 1941 to $8,579,000 in 1943. Irregularity of schedules, as well as lack of space, caused continental operators to send their materials elsewhere for processing.

The long term effects of the shipping shortages were felt in agriculture-principally in sugar and tobacco. Both of these crops require large amounts of fertilizer, practically all of which is imported. Scarcity of fertilizer materials and lack of shipping space reduced fertilizer imports and the results in decreased sugar production came in succeeding years after the shipping problem had been solved.

The war brought a rapid increase in unemployment. With the liquidation of the Work Projects Administration in December 1943 the insular government was forced to assume responsibility for direct and work relief. Since then more than $50,000,000 of insular money has been appropriated for this purpose.

THE VIRGIN ISLANDS World War II demonstrated that the price which the United States paid for the Virgin Islands is more than adequately compensated by their strategic value in the defense arch protecting the Caribbean Sea approaches to the Panama Canal.

This year, as the war moved swiftly toward the end, Virgin Islanders turned their thoughts to the cushioning of their economy. Some of the effects of the temporarily disrupted harbor activities in St. Thomas were offset during the past 2 years by the suddenly expanded activities of the rum industry. Recently the harbor of Charlotte Amalie has begun to show signs of a recurrence of its once healthy activity as neutral ships again are permitted to call here for bunkering.

Transportation to the islands was improved when a Puerto Rican airline, servicing the Virgin Islands and Puerto Rico, leased the new, modern, and fast air equipment of one of the large national airlines, and when an American airline recently extended daily air service from the mainland to St. Thomas.

St. Croix this year produced 4,040 tons of raw sugar wbile 3,200 tons of cane were processed for rum. The Virgin Islands Co., operating St. Croix's only sugar mill and one of its two distilleries, continues to be the substance as well as the nucleus of the island's economic life.

Islands Look to Public Works The postwar program for the Virgin Islands has centered around the projected construction by the Federal Works Agency of public works, health and sanitation facilities for which Congress, by Public Law 510, approved December 20, 1944, authorized appropriations totaling 10 million dollars. An initial appropriation was made for plans and specifications and it is hoped that an appropriation of the first 2 million dollars will be made within the next few months, permitting construction to begin early in 1946.

Birth Rate Highest On Record This year the general health of the islands has been good and epidemics have been scarce. The birth rate for the calendar year 1944 was 43.4, the highest on record; the death rate was 16.3, a slight increase over the preceding year, but still lower than in any previous recorded year, and the infant mortality rate was 101.2, higher than in the preceding year.

Finances and Services Improved The economic and financial trends indicate an inevitable decline from the prosperity in both islands in the fiscal year under review. The revenues of the municipality of St. Thomas and St. John were

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