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slight increase in the number of provisional appointments was the result of the cancellation of about 80 obsolete registers by the Commission. Establishment of registers of eligibles is pending completion of the work of setting up job specifications, and the holding of open competitive examinations.

There are now 9,660 classified and about 15,000 unclassified employees in the Puerto Rico Civil Service, including all teachers, police and employees of the various "authorities”, none of whom are covered by the Civil Service laws.

COMMUNICATIONS AUTHORITY

The war emergency again prevented the Communications Authority from carrying out its program to improve and modernize the telephone and telegraph systems that are under its jurisdiction. Unable to secure the necessary equipment and materials, it nevertheless completed much of the preliminary work that this program involves.

Plans for the installation of automatic telephone exchanges were completed during 1944-45, and the contract for their installation awarded. The central office of the Communications Authority in Caguas was repaired and made ready for conversion to the automatic system. Extensive line repairs were made in anticipation of the new service. The long distance lines were moved away from the highways to the open fields where there are no trees to interfere with transmission. Twenty-four hour telephone service was provided for the towns of Aguas Buenas and Las Piedras. All towns on the Island now have continuous telephone service.

The ultimate aim of the Puerto Rico Communications Authority is to unite all the telephone and telegraph lines within the Island under its control. Accordingly, another attempt was made last year to acquire the properties of the Porto Rico Telephone Company whose franchise expired in September, 1944. The legislative commission appointed in 1944 to investigate this proposal failed to take any action and the matter is still pending.

DEVELOPMENT BANK

The average return on the Bank's marketable securities for the fiscal year was 2.24 per cent, exclusive of additional income from the sale of investments which amounted to $86,543.93. The market value of the Bank's investment portfolio as of the close of the fiscal year was approximately $350,000 in excess of book value.

Cooperation between local banks and the Development Bank was intensified during the year, by reason of common investments in many enterprises. Approximately equal deposits of the Bank's funds are held in each of the various banks.

The Bank cooperated with the Department of Finance in a study and reorganization of Insular and Municipal Trust Funds. Out of this came an investment of $38,813,000 in the Sixth and Seventh War Bond Drives. To this the Bank added $27,290,000 from its own funds, bringing the total investment in the bonds to $66,103,000. The Bank assisted the Treasurer in arranging the purchases and aided in the redemption or refunding of both Insular and Municipal obligations. It also made progress in an analysis of the Treasurer's Refunding Program.

An additional appropriation of $15,000,000 was allotted to the Bank by the Legislature.

DEVELOPMENT COMPANY

Since the establishment of the Puerto Rico Development Company in 1942 to advance the industrial possibilities of the Island, some of its projects have become operating plants, some are in process of construction and organization while others are still in the stage of preliminary investigation.

The glass container factory operated by the Puerto Rico Glass Corporation, a subsidiary of the Development Company, started operation in January 1945 with a capital stock amounting to $3,026,000. A strike of employees caused it to shut down in February for a period of 86 days, but the dispute was finally settled and operations were resumed on June 25, 1945.

The Pulp and Paper Corporation, another subsidiary, has been repeatedly held up in its building of a paperboard mill by delays in deliveries of construction material and machinery. However, on June 30, 1945, 13 months after it was started, the mill was 95 per cent completed and 75 per cent of the equipment was installed. The total capital stock issued by this corporation now amounts to $1,325,000.

A thoroughgoing study of the possibility of developing a ceramic industry on the Island was made by the Company and, in September 1944, a project for the construction and operation of a general ceramic plant was approved by the Board of Directors. This plant will be equipped to manufacture structural tile, bricks, sewer pipe and other heavy glazed products, in addition to stoneware, gardenware, dinnerware and sanitary ware. To carry out this project, the

Puerto Rico Clay Products Corporation was organized late in 1944. All the preliminary work for the construction of the plant was completed by June 1945, and orders for machinery have been given a priority rating. The funds available for use by this company amount to $247,504.75.

The capital structure of the Puerto Rico Cement Corporation, acquired by the Development Company in 1942, was reorganized during the year. Authorized capital stock was increased to $2,500,000. Production amounted to 642,712 barrels—an increase of 8.3 per cent over that of 1943–44.

Although the organization of the Company was not yet complete at the end of the fiscal year, the following departments are now in operation: Research and Development; Manual Industries and Design: Finance. In addition, a Law Division and a Traffic Division have been set up. Steps are now being taken to organize an Industrial Relations Department.

Plans under consideration by the Research and Development Department include plants for making wallboard, cotton cloth, food yeast, shoes, vegetable oils and shortening, and for meat-packing.

The objective of the Manual Industries and Design Department is to stimulate the introduction and growth of semi-mechanized and handicraft industries on the Island: Projects include furniture and cabinet making, needlework, a silk industry, basketry and doll manufacture.

Rapid progress has been made in furniture design. A Wood Products Section has been engaged in developing new designs and techniques, and assisting privately owned enterprises in the organization of woodworking factories engaged in the manufacture of furniture. Its services were secured by the Fine Woods Manufactures Inc. and, since August 1944, this plant has been making furniture of modern design which has been well received by the market. A small private enterprise producing a distinctive line of bamboo furniture has also been set up as a result of work undertaken by the Company in cooperation with the Agricultural Experiment Station of the U. S. Department of Agriculture.

A complete study of the needlework industry in Puerto Rico was sponsored by the Company, and plans made to start a post-war program for it.

In cooperation with the War Emergency Program and the Caribbean Silk Corporation, a silk project has been started. A nursery of mulberry cuttings has been established, and the work of transplanting young stock to a permanent site is in progress. A pilot plant will be set up in this plantation to test the feasibility of raising silk worms in Puerto Rico.

The Manual Industries and Design Department also completed arrangements for the organization of textile and ceramic laboratories. Technicians were retained by the Company for the purpose of organizing these laboratories. Part of the necessary equipment and materials were ordered.

"All of the legal work of the Company is handled by the Law Division. The Division served in the organization of three additional subsidiaries, the preparation of all bids and contracts, and the drafting and revising of collective bargaining agreements with labor unions.

Specialized transportation services are provided by the Traffic Division. Rates for this service are lower than those prevailing among common carriers, and a profit of $7,517.22 was realized from operations for the period ending June 30, 1945.

A Finance Department, which began functioning on July 1, 1945, will handle not only the financial affairs of the Company, but also will offer assistance to its operating subsidiaries. The activities of the Company for the period under review have been financed primarily from the funds obtained through an issue of temporary financing collateral bonds. The total authorization amounted to $5,000,000, of which $3,500,000 had been issued by the end of June 1945. Shortage of funds to finance projects, which has previously been a handicap, was relieved in May 1945, when the Legislature appropriated $17,500,000. The value of investment in stock of subsidiary corporations on June 30, 1945 was $4,532,430 against a total of $2,596,490 on June 30, 1944. Administrative, general and financial expenses amounted to $229,843.10 for the year, and of this amount $82,114.02 constituted interest expense.

EXTENSION SERVICE

(University of Puerto Rico) The Extension Service, in cooperation with the U. S. Department of Agriculture, engaged in a variety of activities designed to help rural families to raise their standard of living. The Service's report covers the period from December 1, 1943 to November 30, 1944.

The food production program was carried out with the assistance of 36 War Emergency Production Assistants. Vegetable seeds were distributed among farmers and 4-H Club members for a total of 23,774 Victory Gardens covering 3,694 acres of land. Almost 7,000 tons of food were produced in these gardens.

Better methods of food preparation and conservation were taught by 28 Home Demonstration Agents assisted by 21 Preservation and 14 Canning Assistants. More than 53,000 families were given this instruction. The increase in the amount of food thus preserved during the year 1944 over 1943 is shown by the following figures :

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In cooperation with the WEP, six industry centers were maintained where 600 Extension farm women and 4-H girls were trained in different crafts, such as fabrication of articles from maguey, coconut, carey, straw and drawn work. At the completion of their training, 173 of these women were transferred to mass production centers established by the Puerto Rico Development Company. A total of 8,934 articles, valued at $5,139.45, was made at these production centers. Home Demonstration agents also trained 4-H girls and farm women in the making of articles from native fibers and in needlework. The value of such articles sold by farm families during the past year was estimated at more than $14,000.

The Extension Service gave special attention to a clothing conservation program. More than 3,000 farm families were given assistance in the renovation, repairing and remodelling of used garments. In addition, 2,930 families were assisted in clothing construction problems and 2,043 others in the selection of clothing and textiles.

Other activities of the Service included instruction in hygiene and nutrition, improvement of recreational facilities in rural communities, holding of extension schools on farm management, establishment and supervision of 4-H Clubs and camps and the distribution of various publications of the Service.

The nine Demonstration Farms of the Extension Service continued to render many valuable services to farmers. More than 10,000 farmers visited these farms to take advantage of method demonstrations, free breeding services of purebred stock from the farms, for free propagation material, or to buy poultry and live stock. The most important materials distributed free of charge were coffee seedlings, vegetable seedlings, cassava cuttings, coffee seeds and guava seedlings.

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