(6 of 9)
Power 166 mill. kw-h 1.3 bill. kw-h
Public revenues from indirect taxes, noncorporate income taxes and other tolls on the speeded economy jumped from $27.5 million to $198 million; each of Fomento's investments stirred a burst of economic activity that ultimately returned to the treasury four times as many dollars as were laid out. Wages rose, now average $1,500 a year.
Flops & Switches. Failures came often enough to keep the bootstrap-tuggers from getting smug. Tax exemption means nothing if profits are nothing, and 169 factories (of the 667 that started) have gone under for such reasons as obsoletion of market, lack of distributing facilities, attempting to make a product exclusively for the still relatively small Puerto Rican market. The government, too, had its failures. The Land Authority tried valiantly, even mechanized sugar loading by a system that blows the semirefined product from trucks or railroad cars., into ships, eliminating bags. But it could not meet its allotted task of increasing output of sugar, and its lands and plants may be sold to local capitalists if they will agree to mechanize harvesting, keep wages up, shun attempts at political control.
Equally flexibly, Fomento, unable in 1946 to find a capitalist to build a hotel, put up the pattern-setting Caribe Hilton with its own $5,000,000, brought U.S. Hotelman Conrad Hilton in to run it. Hilton made $1,000,000 the first year, was encouraged to go ahead with what is now his worldwide chain.
Munoz and his men are so unashamedly pleased with Operation Bootstrap that their formula for the future is more of the same. Goals: 2,500 factories by 1975, with a standard of living then equal to that of the U.S. now. The U.S. recession is hurting the island, and with unionization and rising wages, the tax-exemption law, which expires at the end of 1963, is left as the main incentive. But in a single week recently, U.S. investors were in Puerto Rico to study prospects in plastic webbing, dresses, sportswear, tourist hotels, motorboat trailers, wall tiles, plastic toys, scientific apparatus, shoe machinery and cookies.
What does Bootstrap cost the U.S.? "What does Missouri cost the U.S.?"
Moscoso retorts. Puerto Rico buys heavily beyond its own shores (mostly from the U.S.) and its purchases of goods and services top $800 million a year. It sells less, and its 1957 balance-of-payments deficit was $265 million. The deficit was redressed mostly by incoming capital, payments of $62.5 million to Puerto Rican veterans (who suffered heavy casualties in the Korean war), and money sent home by Puerto Ricans working in the U.S. Washington's grants-in-aid for such programs as health, housing and highways totaled $41 million (which is a bit more than islanders pay the U.S. Treasury in indirect taxes on imported consumer goods).