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Puerto Rico - History - The American Period

The Spanish formally established San Juan, Puerto Rico in 1521, ten years after establishing themselves on the island. The historic district of San Juan represents one of the longest colonial periods in the Western Hemisphere, for the Spanish claim to the island extended from 1493 to 1898. The Spanish constructed the massive coastal fortifications of San Juan to repel European invaders during the age of sail. In the Spanish-American War of 1898, steam-propelled vessels from the United States captured the island and Puerto Rico became one of its territorial possessions.

The reforms and newly won freedoms of 1898 were abruptly ended. In April 1898, the Spanish-American War started with the blowing up of the USS Maine, a battleship at anchor in the harbor of Havana, Cuba. The war was very short, and by August 13, it was over in Puerto Rico. An American military force of 16,000 landed on the south coast at Guánica and marched overland to San Juan, but the war ended before they crossed the Cordillera Central Mountains. On October 18, the Spanish flag was lowered over the governor’s residence at La Fortaleza. Under agreements signed at the Treaty of Paris, Puerto Rico was officially ceded to the United States on December 19, 1898.

At the start of the 20th century, Puerto Rico had a population of nearly 1 million that was mostly poor, agrarian, and illiterate with little or no opportunity for education. Most of the island’s land was in the hands of a few wealthy families and absentee owners. Coffee was the dominant export product, but it waned owing to new tariffs imposed by the United States and catastrophic hurricane damage. Almost overnight Puerto Rico’s newly won opportunities for self-rule were gone and all local political power was turned over to the U.S. military government. It abolished the newly formed parliament, local governments were reorganized, and new judicial and tax systems were put in place based on American forms of government.

Many Puerto Ricans identified with American principles of democracy and the hard-won freedoms brought about by the U.S. revolution. They were hopeful that the United States would willingly grant Puerto Rico many new political freedoms. This did not occur. Instead, the U.S. Congress passed the Foraker Act (Organic Act) in 1900. It was more restrictive than the freedoms Puerto Rico had won under the autonomy agreements with Spain. Under U.S. rule, the governor would be appointed by the President, as were all other major office holders, including the justices of the Puerto Rico Supreme Court. Local laws passed by the newly established Puerto Rico House of Delegates were subject to veto by U.S. Congress.

Puerto Rico could only send a nonvoting resident commissioner to Congress. The Foraker Act also prohibited Puerto Rico from negotiating trade treaties with foreign nations and retired the Puerto Rican peso at 60 cents to the dollar. This caused a breach in international trade relations and a 40-percent rise in the cost of living. It also caused the price of land to fall and allowed the big wealthy U.S. sugar corporations to come to Puerto Rico and acquire vast areas of land, even though no corporation was allowed to own over 202 hectares (500 acres).

This then prompted the rapid rise of sugar as the main exportable crop. Because of the foreign trade restrictions, by 1930 more than 90 percent of the island’s sugar trade was with the United States and resulted in a monoculture economy for Puerto Rico. The big four U.S. sugar companies were able to show huge profits (22.5 percent return on capital) in the 1920s and 1930s. Much of the profit was due to the extremely low wages paid by the companies to the Puerto Rican workers (63 cents for a 10-hour day in 1917).

The Foraker Act was restrictive politically and economically, but did provide for new and expanded economic activities such as free trade with the United States. It also exempted Puerto Rico and its inhabitants from U.S. taxes. Federal excise taxes on rum and tobacco produced in Puerto Rico were returned to the island’s treasury.

Although the Foraker Act was economically good for Puerto Rico, it was despised politically and thus resulted in continued local interest in Puerto Rican independence. This undercurrent, coupled with the Great War, caused the United States to review Puerto Rico’s status resulting in the Jones Act in 1917. This act granted collective naturalized citizenship to all Puerto Ricans on a voluntary basis. There were 1.2 million Puerto Rico residents at the time and all but 288 accepted citizenship. The Jones Act also allowed Puerto Ricans to enter the United States without travel restrictions, and established a Puerto Rico Bill of Rights, which created a new two-house legislature. Popular elections would decide a 19-member Senate and a 37-member House of Representatives. The Jones Act also required Puerto Ricans to serve in the U.S. military, and 18,000 Puerto Ricans served in World War I. After the war, more attempts at autonomy were proposed but were rejected by the U.S. Congress.

Free trade with the United States greatly enhanced sugar trade, and by the 1920s, 75 percent of the employed people in Puerto Rico were involved in the sugar industry controlled by U.S. corporations. When the world’s economy collapsed in the late 1920s, the period of the Great Depression was particularly hard on Puerto Rico. By the 1930s, Puerto Rico’s population had grown to 1.5 million, and the effects of the depression increased unemployment, which made living conditions worse. Per capita net income dropped from $122 in 1930, to $85 in 1933.

The U.S. Congress had its hands full at home and basically ignored the plight of Puerto Rico. As a result, for the first time, hostility and resentment fueled a strong independence movement in the 1930s; however, it was not strong enough to defeat the other pro-statehood parties. In 1936, a new political party and leader emerged who was to dominate Puerto Rican politics for three decades. Luis Muñoz Marín founded the Popular Democratic Party (PDP) or Populares. In combination with an enlightened New Deal Governor, Rexford Tugwell, who was appointed by President Roosevelt, they began to reorganize the economic and social structure of Puerto Rico.

Unfortunately, the 202 hectares (500-acre) land provision of the Organic Act was never enforced, and by the end of the 1930s, 51 corporations owned more than 100 000 hectares (250,000 acres), much of it not used for food production. This forced Puerto Rico to import (by design) vast quantities of food from the United States at high prices because of U.S. tariffs. The result was to turn farmers into virtual serfs. One of Muñoz Marín’s great initiatives was to press Governor Tugwell to help in the passage of a Land Reform Act. This was finally accomplished in 1941 after the U.S. Supreme Court in 1940 said that Puerto Rico had the right to enforce its land reform laws and limit land ownership to 202 hectares (500 acres) or less.

True land reform was the result, with many rural residents now able to buy 10-hectare (25-acre) parcels. This allowed them to grow crops for profit for both export and internal use, thereby breaking up the land monopoly of the large sugar companies. Many see this as the seminal event instrumental in the real socioeconomic gains that would come in the late 1940s with the advent of Operation Bootstrap, a massive effort to raise the standard of living for the island’s inhabitants and make the island more self-sufficient. Little attention was paid to gaining Puerto Rico’s independence for 10 years, and out of frustration, a schism occurred in the PDP and the modern Puerto Rican Independence Party (PIP) formed in 1946.

Upon Roosevelt’s death, Harry Truman appointed a new governor, Jesús T. Piñero, the first Puerto Rican to be named to the post. This created better relations with the United States. The U.S.-Puerto Rico relations were also strengthened as a result of the 65,000 Puerto Ricans who served in World War II. In 1947, Congress amended the Jones Act allowing all future governors to be popularly elected and with power to appoint Puerto Rico Supreme Court Justices. In 1948, the first popularly elected governor was Luis Muñoz Marín.

From 1948 to 1960, Puerto Rico and the U.S. government formulated and implemented Operation Bootstrap. The result was 450 new factories and businesses being started and the beginning of a major transition for Puerto Rico from a largely rural agrarian society, to the modern industrial economy it is today. By 1956, industrial development had surpassed agriculture as the principal source of income. New initiatives in public education and vocational training were part of this program. There was a second phase in Operation Bootstrap in the 1970s that was stimulated by Fomento, Puerto Rico’s Development Bank and Economic Development Administration. This program attracted capital-intensive industries such as petrochemical and pharmaceutical companies. The Operation Bootstrap Program also made it possible to develop a thriving professional class of lawyers, engineers, business managers, and financial executives needed to make these businesses run. It worked, and Puerto Rico became a showcase for other less developed economies in the Caribbean to emulate.

In 1950, following Governor Muñoz Marín’s request, the U.S. Congress declared Puerto Rico a Free Associated State (Estado Libre Asociado), or Commonwealth. As a commonwealth, all existing ties to the United States would remain, but Puerto Rico could now write its own constitution. In the watershed election of 1952, the PDP won 67 percent of the vote, PIP 19 percent, and the pro-Statehood Republican Party (SRP) 13 percent.

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