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The budget for this municipality carried total appropriations of $589,558, of which local revenues were estimated at $489,558, and a Federal appropriation of $100,000. Major departmental appropriations were: Public works, $134,764; education, $78,249; police and prison, $50,843; Christiansted Hospital, $40,662; Frederiksted Hospital, $33,882; the Kingshill Home, $29,950; the legislature, $13,610; and the sanitation service, $11,148.

Of the Federal appropriation of $100,000 for defraying the deficit of the municipality of St. Croix for the fiscal year 1945, approximately $51,000 has not been expended and will be returned to the Treasury of the United States as an unobligated balance of the said appropriation. This unexpected situation is due to an unprecedented increase in income taxes from the rum industry during the fiscal year 1945. As the deficit appropriation is not considered to be an outright grant to the municipal government, and is accountable to the Comptroller General of the United States in the same manner as all other direct Federal appropriations, it is held that when local revenues exceed, as they did in 1945, the normal operating requirements of the municipal government, the resulting saving in the Federal deficit appropriation does not belong to the municipal government, and is to be returned to the United States.

The wide variation in revenues of the municipality of St. Croix for the years 1944 and 1945 was due almost entirely to a corresponding rise and fall of income taxes from the rum industry, as predicted in last year's annual report, this unusual revenue resulting as it did from increased distilleries' profits could not be counted upon as a stable source of future revenue. Prices and profits dropped suddenly and precipitously when, by reason of the so-called "whisky holidays" the distillation of beverage spirits was permitted by continental producers.

The Virgin Islands Co., which had lost $300,000 up to 1944, made a profit of over $700,000 in that year, and paid an income tax of $207,000 to the municipal treasury of St. Croix in 1945. Yet the municipality of St. Croix faces total budgetary collapse in the coming fiscal year because of the withdrawal of a Federal deficit appropriation based on the previous year's prosperity when, in fact, the Virgin Islands Co. will pay only about $14,000 in income taxes in 1946, as it shipped no rum after the first week of July 1944.

In St. Croix, long-neglected municipal services were greatly improved during the year under review. Meager municipal salaries were increased. They are, however, still below the level of comparable positions in Federal agencies and lower than salaries in St. Thomas. Maintenance appropriations of all departments were increased in 1945 due to the additional funds made available as a result of the large income tax paid by the Virgin Islands Co.

The Congress disapproved a Federal deficit appropriation for the coming fiscal year, apparently due to the temporary prosperity which

the municipality enjoyed in the fiscal year 1945. As a result of this action, the municipal treasury of St. Croix faces a deficit of $152,000 in 1946, unless a deficiency appropriation is passed in the near future. The administration of the government of the Virgin Islands is convinced that community services in St. Croix are still far below a decent minimum, and that any further reduction in expenses cannot be made without impairing the already inadequate health, sanitation, educational, and relief services of the municipal government. No factor can be found at this time to relieve the picture of the continued dependence of the island of St. Croix on Federal assistance.

PUBLIC WORKS DEPARTMENT

Due to the continuation of the war emergency, the public works department confined itself to the accomplishment of work which could be done with materials obtainable here and in Puerto Rico. The construction of water supply units, under a Federal Works Agency appropriation, was completed with the exception of protective fencing and piping. Eleven new water supply units were completed. The present water storage capacity of the public supply units totals 3,483,000 gallons. Completion of work now underway would assure a water supply of over 31⁄2 million gallons for use of the general public. Several new roads were constructed, others were widened and improved. A series of masonry steps were also completed. Drainage gutters were cleaned, paved, and reconstructed.

Following up the preparation and revision of preliminary estimates covering various projects for the development of the islands, under the 10 million dollar bill passed by Congress, the Department carried out various assignments in connection with studies being made on such projects as water supply facilities, electric power plant and distribution system, and sewage disposal. Experimental dams were constructed in accordance with instructions presented by consultant engineers of the Federal Works Agency.

In St. John the Department conducted extensive surveys in connection with the development of homesteads.

St. Croix was fortunate to receive an increase in appropriations, for this Department, from $66,000 in 1944 to $135,000. In addition to the ordinary maintenance of public structures, many of them were given thorough overhauling long needed, and such improvements as conditions required. Concrete gutters throughout both towns were repaired where needed, and more than a mile of additional drainage was installed. Much of the island's 110 miles of dirt roads was regraded; and the wharves and sea-walls received their share of attention to the extent of available funds.

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POLICE AND PRISON DEPARTMENT

The director of police of St. Thomas reports that a total of 1,137 persons were arrested during the fiscal year ended June 30, 1945, as against 1,182 arrests in the preceding year. The major portion of these cases were for disorderly conduct, violations of the automobile ordinance, and other minor offenses.

The outstanding contribution in this fiscal year has been several lectures and demonstrations on police work given by officers of the Federal Bureau of Investigation.

The director of police of St. Croix reported that there were 154 cases filed with 129 convictions as against 237 cases filed and 212 convictions during the preceding year. The police department of St. Croix also received the benefit of lectures under the auspices of the Federal Bureau of Investigation.

POLICE COURT

The police judge of the municipality of St. Thomas and St. John reported that 1,019 persons were tried for criminal offenses during the year, the greater number of which were for violations of the automobile ordinance. This was a slight decrease under the preceding year when 1,122 persons were tried for criminal offenses. Fifteen persons were tried in St. John. In St. Croix, 320 criminal cases were tried, representing a decrease under last year's figure of 363 cases.

PUBLIC LIBRARIES

Adult and juvenile attendance and the circulation of books in the public libraries of both municipalities have been satisfactory, considering the limited space and books available. In St. Thomas, the juvenile department conducted its annual story hour activities. In St. Croix, increased appropriations permitted purchasing of a large number of books. In both municipalities the salaries paid are too low, in addition to the fact that both libraries are understaffed.

HARBOR DEPARTMENT

This year again reflected a very bad period in shipping, due to war regulations and other restrictions. A total of 204 vessels, with gross tonnage of 264,640, entered St. Thomas, of which 40 were United States Government owned ships with a gross tonnage of 68,709. Shipping, therefore, showed a slight increase compared with last year's figures of a total of 242 vessels with gross tonnage of 259,577.

THE MUNICIPAL MARKET

On April 1, 1945, the municipality of St. Thomas and St. John assumed, by virtue of a lease from the Virgin Islands Co., the operation of the modern cold-storage market erected here in 1942 by the Department of the Interior. A special fund of $11,000 was set aside by the municipal council for financing its operation under the supervision of a board of management and a general manager. While it is too early to make any over-all statement with regard to the outlook of this institution, it is encouraging to note that the initial reports indicate that the operating loss sustained by the Virgin Islands Co. has been reduced.

EDUCATION

This year, as in the preceding year, education in the municipality of St. Thomas and St. John has enjoyed more adequate financial support. It has been possible to increase to some extent the staff of the elementary teachers in response to the increase in enrollment. While total expenditures have exceeded $200,000 in contrast to $50,000 for educational services in 1936, very few improvements have been made to school plants and equipment due to wartime restrictions.

Vocational training has continued to receive the support of the Government and facilities have been improved. A new temporary building is now under construction to provide space for motor mechanics and metal work.

In addition to the teacher-training program under the auspices of the Teachers' Institute, a plan has been adopted whereby four teachers of the public school system are to be released annually for study in the continental United States and Puerto Rico. Scholarships have been granted to these teachers to assist them in their expenses.

The adult education program has continued to receive gratifying response. Enrollment and attendance surpass that of preceding years. The nursery school and school lunch system, which came under municipal management during the latter half of the preceding year upon termination of WPA operation, was continued throughout the school year, supported entirely by municipal funds except for Federal aid in the form of free commodities. Approximately 450 children were in daily average attendance at nursery school centers, and lunches were served to approximately 1,600 children daily.

The need of a new high school and certain elementary schools, in addition to the remodeling of certain existing schools, continue to be the greatest handicap to the program of education in this municipality. Present limitations of space have required the application of measures to restrict high school enrollments within the limits of maximum capac

ity of classroom space. There is no prospect of extending the facilities of education until an extensive construction program of school building is launched. The only hope for the future is in the 10-million-dollar public works program for the Virgin Islands which has recently received favorable enabling legislation from Congress.

The municipality of St. Croix, through the unexpected increase in revenues, has been able to improve the substandard salaries of teachers. The school-lunch program and adult education were continued within the limits of average funds. The municipality of St. Croix, like the municipality of St. Thomas and St. John, is handicapped by the lack of suitable school buildings and equipment. A program of teacher training continues to include summer sessions and encouragement of teachers to take further studies in the continental United States and Puerto Rico.

HEALTH AND SANITATION

The commissioner of health in St. Thomas reported that the municipal slaughterhouses, nightsoil removal dump, and harbor pollution continue to be serious health hazards.

This year the legislative assembly enacted an inadequate ordinance to govern the production, inspection, and sale of milk, While it is better than no statute at all, it is hardly a means to safeguard the people of the islands from the ill effects of unsafe milk.

The legislative assembly also adopted an ordinance dealing with sanitary regulations for slaughterhouses and meat-selling places. This law required implementation by regulations. Such implementation was afforded in the municipality of St. Croix. In the municipality of St. Thomas and St. John the ordinance is still virtually useless because of the failure of the municipal council to adopt the necessary supplementary regulations.

The benefits of the United States Public Health Service grants have been extended to the Virgin Islands. Under these grants, public health nurses have been trained in special health work in continental United States. A photo-fluoroscopic outfit for mass chest pictures in the case-finding campaign against tuberculosis has been ordered. It is planned to send sanitation inspectors to Puerto Rico for training. During the year under review, epidemics have been gratifyingly scarce, and the general health of the islands is good. Slight improvements were made in hospital buildings and facilities in St. Thomas.

In St. Croix, the general health standard was good. Work on tuberculosis control and venereal disease control was continued successfully with the assistance of the United States Public Health Service.

Considerable attention was devoted to the increasing incidence of murine typhus on the island of St. Thomas. The United States Public Health Service recommended a program of rat extermination for the

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