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    "id": "1515917",
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    "contentType": "document",
    "title": "Puerto Rico (1)",
    "description": "This file contains materials relating to the Ad hoc Advisory Committee on Puerto Rico and the proposed compact of permanent union.",
    "citationUrl": "https://catalog.archives.gov/id/1515917",
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        "James M. Cannon Files (Ford Administration)",
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        "Puerto Rico",
        "Independent regulatory commissions",
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        "Territories and possessions",
        "Treaties"
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        "logicalDate": "1976-02-29",
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        "logicalDate": "1975-04-01",
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    "ocrText": "The original documents are located in Box 27, folder \"Puerto Rico (1)\" of the James M.\nCannon Files at the Gerald R. Ford Presidential Library.\nCopyright Notice\nThe copyright law of the United States (Title 17, United States Code) governs the making of\nphotocopies or other reproductions of copyrighted material. Gerald Ford donated to the United\nStates of America his copyrights in all of his unpublished writings in National Archives collections.\nWorks prepared by U.S. Government employees as part of their official duties are in the public\ndomain. The copyrights to materials written by other individuals or organizations are presumed to\nremain with them. If you think any of the information displayed in the PDF is subject to a valid\ncopyright claim, please contact the Gerald R. Ford Presidential Library.\nDigitized from Box 27 of the James M. Cannon Files at the Gerald R. Ford Presidential Library\n9:00 AM Puerto Rico Meeting\nSenator Marlow Cook,\nMayor Carols Romero, Ross\nFalk\nThursday, May 1, 1975\nMay 2, 1975\nthe\nMEMORANDUM FOR: JIM CANNON\nFROM:\nNORM ROSS\nSUBJECT:\nAd Hoc Advisory Group on Puerto Rico\nBACKGROUND\nWhen the Puerto Rican people voted for Commonwealth\nstatus in preference to Statehood in the plebiscite\nof 1967, they also chose to \"perfect\" Commonwealth\nthrough Advisory Groups, which are jointly appointed\nby the President and the Governor of Puerto Rico. The\nPresident appointed the first such Advisory Group jointly\nwith former Governor Luis Ferre in 1970 to inquire into\nthe question of the Presidential vote for Puerto Ricans.\nThat Group reported back favorably in 1971, but no action\nhas been taken, and the question is again being considered\nby a second Advisory Group initiated on September 27, 1973.\nThis second Advisory Group has been charged to investi-\ngate \"the extent to which the laws and administrative\nregulations of the United States should apply in Puerto\nRico.\" The Group has 14 members: 7 appointed by former\nPresident Nixon and 7 by Governor Hernadez-Colon.\nMarlow Cook is chairman of the United States delegation.\nThe other members are Senators Buckley and Bennett Johnston;\nCongressmen Don Clausen and Foley; former Governor Richard\nOgilvie; and Paul Howell, a Texas oil man.\nThe Domestic Council was instrumental in establishing\nthe second Group. The Group's Charter designated 18 months\nas the time needed to accomplish the objectives set forth\nin the Charter. Based on a starting date of September 27,\n1973, the Advisory Group should have completed its work\non March 31, 1975. However, the progress of the Croup's\ndeliberations has not made this possible.\nGERALD FORD LIBRARY\nPrior to June 30, 1974, the Advisory Group was\nfinanced from the funds provided by the President's\nEmergency Fund. This Fund was eliminated by Congress\nin the FY 1975 appropriation process. On July 1, 1974,\nthe Domestic Council provided the necessary funds and\npersonnel vacancies to enable the Group to continue\ntheir operations.\nA final product of the Advisory Group's activities will\nbe a report to the President and the Governor of the\nCommonwealth of Puerto Rico. If the Governor accepts\nits recommendations, he will submit the report to a\nplebiscite in Puerto Rico. The result is certified to\nthe President, who in turn transmits the report, election\nresults and his recommendations to Congress.\nThe mainland delegation to the Advisory Group has\nreceived a document entitled, \"Compact of Permanent\nUnion between Puerto Rico and the United States,\"\ndated April 12, 1875. This document was drafted\nentirely by the Puerto Rican delegates to the Advisory\nGroup in secrecy. No public hearings or meetings, as\nprescribed by the Federal Advisory Committee Act, were\nheld giving the Puerto Rican electorate an opportunity\nto make their views known.\nThe proposal contains several far-reaching provisions\nwhich would give Puerto Rico significantly greater\nautonomy, than enjoyed by the States, in the areas of\nFederal regulatory statutes and their accompanying\nadministrative regulations. On the other side of the\nlegislative fence, the proposal would establish Puerto\nRico as an equal partner with the States in the distribution\nof social and economic aid.\nSuch a proposal if not significantly modified will be\nembarrassing to the President, the Congress and the\nAmerican people. Exemption actual and proposed from\nFederal regulatory statutes and the accompanying admin-\nistrative regulations are very appealing to any. body\npolitic and would surely receive an overwhelming\naffirmative vote from the Puerto Rican electorate. The\nsame result can easily be predicted on the enlargement\nGERALD R. FORD\n- 3 -\nof social and economic aid to a people whose per capita\nincome is less than one-half the national average and\nwhere a considerable majority of the populace is\neligible for welfare.\nISSUE\nTo diplomatically terminate the activities of the\nAdvisory Group with an \"acceptable\" report.\nALTERNATIVES\n1. The mainland delegation could state that the\nproceedings at which the Puerto Rican proposal\nwas drafted were not in accordance with the\nFederal Advisory Committee Act.\nPro\nThe report from the Puerto Rican delegation\nis far from being acceptable.\nWould allow ample opportunity for mainland\ninput and could result in a finished product\nacceptable to the President and eventually\nto the Congress.\nPublicly justifiable in that no mainland\ndelegates were consulted in the preparation\nof the report.\nCon\nThe Puerto Rican delegates would be highly\nembarrassed making it more difficult to\nretreat from the far-reaching positions\nthey have taken.\nWould mean starting from the beginning and\ninvolving several meetings greatly extending\nthe Group's existence.\nFORD LIBRARY is 93\n2. The fully Advisory Group adopt the Puerto Rican\ndocument as a working paper.\nPro\nShould result in the completion of the Advisory\nGroup's work in the shortest period of time\nwith an \"acceptable\" product.\nThe Puerto Rican delegates should be capable\nof swallowing their embarrassment and retreat\nfrom the far-reaching position they have taken.\nOpen meetings would be held in Puerto Rico\nwhich would give the Puerto Rican electorate\na firsthand opportunity to understand why\nsuch far-reaching steps toward local autonomy\ncannot and should not be proposed by the\nAdvisory Group.\nCon\nThe mainland delegates must take an unpopular\nand embarrassing stand and make a strong point\nthat the draft proposed by the Puerto Rican\ndelegates, in their judgment, will result in a\nfinished product unacceptable to the President\nand the Congress.\nFunding for the continuation of the Group's\nactivities must be located. This situation\noccurs with both alternatives. Tab A contains\na proposed budget submitted by Marlow Cook.\nRECOMMENDATION\nMarlow Cook recommends Alternative 2. I concur with\nthat recommendation.\nNROSS/pt 5-2-75\nCC: WH files\nJim Falk\nFORD LIBRARY is CERVID\nCaunon nerros\nTHE WHITE HOUSE\ntall (Subj)\nWASHINGTON\nJune 26, 1975\nMEMORANDUM FOR:\nJIM LYNN\nFROM:\nSUBJECT:\nJIM Request CANNON for June Funds\nfrom the\nPresident's Unanticipated\nNeeds Appropriation\nOn September 27, 1973 under the Federal Advisory Committee Act,\nformer President Nixon, along with the Governor of Puerto Rico,\njointly appointed a second Ad Hoc Advisory Group on Puerto Rico\nThis group was charged to investigate \"the extent to which the laws\nand administrative regulations of the United States should apply\nin Puerto Rico.\"\nThe Group's Charter designated eighteen months as the time needed\nto accomplish the objectives set forth in the Charter. Based on a\nSeptember 27, 1973 starting date, the Advisory Group should have\ncompleted its work by March 31, 1975. However, the progress of\nthe Group's deliberations did not make that possible.\nAs you are aware, before the final report can be submitted to the\nPresident and the Governor of the Commonwealth of Puerto Rico,\npublic hearings or meetings, as prescribed by the Federal Advisory\nCommittee Act, must be held. It was anticipated that two such hear-\nings, one in Washington, D.C. and the other in Puerto Rico, would\nbe held during this eighteen month period.\nIn addition to providing the Group's day to day operating expenses\nwhen the President's Emergency Fund was eliminated by the Congress\nfor FY 75, the Domestic Council felt it could fund these hearings in\nFY 75 through its appropriated travel funds.\nFORD LIBRARY & 0778\n-2-\nUnfortunately, a further delay occurred in April, 1975, when the\nPuerto Rican delegates to the Advisory Group drafted a document\nin secret without consultation with the mainland delegation to the\nAdvisory Group. Through weeks of negotiation and diplomacy,\nthe proposals have been sufficiently refined to be presented for\npublic hearings which are now scheduled for early July during\nFY 76. This delay was not anticipated during the preparation of\nour FY 76 budget.\nWhile the Domestic Council can continue to absorb the group's opera-\nting expenses until September 30th, I feel our next fiscal year's\ntravel authorization will not accomodate the estimated $10,000 for\nthe two public hearings.\nIt is requested, therefore, that the support for these meetings be\nfunded through the President's FY 76 Unanticipated Needs Appro-\npriation subject, of course, to the provisions of the Continuing\nResolution.\nFORD is LIBRARY 07VH30\nTHE WHITE HOUSE\nWASHINGTON\nJuly 1, 1975\nMEMORANDUM FOR:\nJIM CANNON\nFROM:\nJIM CAVANAUGH\nSUBJECT:\nFunding - Puerto Rico Hearings\nAt your request Warren has put together the\nattached package on financing the Puerto Rico\ncommittee, and I recommend that you sign the\nmemo he has prepared for you to send to Jim Lynn.\nP\nP-\n1\npl, ford\nTHE WHITE HOUSE\nWASHINGTON\nJuly 1, 1975\nMEMORANDUM FOR:\nFROM:\nJIM H CANNON\nWARREN HENDRIKS\nSUBJECT:\nFunding - Puerto Rico\nHearings\nAttached is a formal request to Jim Lynn for funding the two Puerto\nRico hearings. Pat Delaney is working with the Group to obtain\na breakdown of the anticipated $10,000 expenses but that could be\nincluded later, if necessary.\nAttachment\nJune 11, 1975\nMEMORANDUM FOR:\nJIM CANNON\nFROM:\nSAM HALPER\nFORD is GERALD LIBRARY\nSUBJECT:\nPUERTO RICO: A Harsh Light Dawns\nPROBLEM\nThe statistics of Puerto Rico's progress in the quarter century of\nOperation Bootstrap have been a wonder--10 to 12% annual GNP increases,\nbug inesses\n1,000 US industries and\nopening up in Puerto Rico, more than\n175,\n7.8\n000 new jobs\neach with a multiplier\neffect of\nand much, much more.\nYet right now, after more than 25 years-quite apart from recession.\nthere is still the same percentage of unemployed and roughly the same\npercentage of people below the poverty level. The unemployed and veryin poor\ngenerally\nare better off in an absolute sense, higher benefits and better\nbut not relative to the\naccelerating\nindices of GNP, or\nthe numbers of telephones or Cadillacs or massive condominiums- or\nto\nnever before were they so aware of how the rich can live.\ntheir rising expectations.\nis\nSixty percent of the island below the poverty level according to the 1970\ncensus, V. 10% on the mainland, unemployment is up to 17% officially\nprivately\nthe Governor admits\nto 30%\nand 71% of the families are on food\n2\nLast week\nSocial Services\nFORD & LIBRARY\nS\ntamps.\nRamon Garcia Santiago,\nsecretary\nan old Bootstrap hand in the\nPlanning\nHeard\nan intimate in the Munoz Marin circle, told me: \"The food\nstamp program is the largest factor improving the position of the poor in\nPuerto Rico in the past 30 years. No other program has penetrated so deep\ninto the poor man's house. getting OH handouts.\nFour hundred thousand houheholds are on the stamps, 1.8 million\nof the\n3 million Puerto\ntv\nRicans living on the island are eligibler\nin the coming fiscal year\nPuerto Rico's net income from the program/will\nbe about $500 million, greater than the combined total of all federal\nprogrmams on the island. Juan\nAlbors,\nSecretary of\nState (and de facto Lt. Governor), former chief of the Government Develooment\nBank (Banco Fomento), added that \"we are having a real growth in the level\nin current dollars it is growing\nof total personal income;\nat the rate of\n15% yearly, going mostly to the poor--food stamps,\nincreased social security benefits, unemphoyment benefits. At the same\n0\nproduction is negative, down 3 to 4%\" Then Albors,\nNÁ. 2 man in\nthe government added: \"We are very much concerned about the growth of a\n3\n3\nwelgare class. Stamps are being\nwagered at cockfights,\nbittle corner little corner\nbought and sold on the black market, us d to buy rum at the\nbodegag,which Turna beind eye to the lawx\n& LIBRARY 038470\nA poor old lady's son told her: \"I want coupons to take\na girl to the movies. Later, one stopped ex-Governor wife\nSanchez's\nJeannette, a popular figure among the poor, and said: \"This is worse than\nS\nHirohima. # Why, Jeannette asked. \"Because we people of Puerto Rico have no\nthe old lady said.\ndignity left,' \"Next year, muged IV Guillermo Rodriguez Benitez,\nnewly appointed chief of the Government\nDevelopment Bank, \"$500 tq $600 million will come in from food stamps.\nBut how can you not give it to them?\"\nTo A great debate is going on in Puerto Rico\nright now, siliently, ¿eep within the government, kept from the public and\nfrom U.S. media, about which way to turn. The tinkering looks like it is played\nout. Wage differentials that, together with tax holidays, were Bootstrap's\nprime enticements to US businegamen are running out; by 1977 minimum wages\nnow with now per\nwill be the same on\nisland as on\nmainland,\nas\nThe menace of a lumpen welfare class, as mags debauched by\n4\nFORD & LIBRARY 038470\n4\nhandouts hangs over Puerto Rico.\nIs the answer more inducements, other inducements to the factories?\nTao months ago\napproved\nGovernor Rffael Hernandez Colon\na new wrinkle in wage\nwill\nin entives. The government\npay 25% of the production payrell\ncosts\nof new factories meeting certain criteria for the first two years\nwith\nThe subsidy will help start-up costs and the learning curve\nIt wibl not go to a factory that does not show permanence and\nwill\nnot be\ntill\npaid over\nthe two years elapse, to make\ngure the industry doesnot\nlevant.\n&\ndozen prospects\nare negotiating. no dealsx so far.\nfeeling that something is\nfundamentally wrong, that\nPuerto Rico has to shart all over again and the sooner the better.\na veteren private banker\nGuillermo Rodriguez Benitez, legantly tailored drafted\na few months ago by his party, the ruling Popular\nDemocratic Party (PPD) to bos S the Government Debelopment Bank,\none\ndeeply-thoughtful man universally well-\nregarded shakes his head: \"After 25 years what have we to show? Our\nindustrialization program has been anything but a success.\nwe had been\ncompetitive here, with this great tax incentive we have, we'd have beeR\nsmothered by factories. Where are they? The wage differential is completely\n5\n5\nRico,\nwiped out. It costs more to build in Puerto\nmachinery is more\nexpensive because it is imported, servicing is more expensive, you\nback\nFORD j LIBRARY GERALD\nhave to bring in raw materials and to ship\nthe finished products;\nit costs more for\nmanagerial people and for technical people.\nMaintenance, phonessand public service are more expensive. We couldn't\neven attempt a Khmer Rouge. There are no cane fields to drive our people\nback to. What's the answer? I don&t know.\"\nTwo days later, at linch for four in a private dining room in the\nthe great government soul-search burst out into the open.\nBankers' Club in Old San Juan, Treasury Secretary\nCasellas,\nCon\none of the youngsters in Hernandez Colon's cabinet, was plying me with\nta & k about the great changes going on: 40,000 parcels of land had been\ntransferred to homesteaders--more in the past year than in the previous\ntengete.\nRodriguez Benitez, our host, ligtened silenly for a while then exploded:\n\"You are like a butterfly, hovering around but never touching groubd.\nWhat the hell are you talking about? What land? Puerto Rico has no\nland. The question is: Is Puerto Rico viable?\" Casellas murmured protests\nfor a moment, then said:\n\"You're right. Is Puerto Rico viable?\"\nAd we stood up, I\niv again pressed Rodriguez and he saignn\nmournfully: \"I don t know, I don t see it. #\no\n0\n6\n6\nBACKGROUND\n30\nIt began some\nyears ago in the noble mind of Luis Munoz Marin,\nFORD i LIBRARY 071839\nin Washington DO where his father was the first official delegate of\nRico\nPuerto\nto the US Congress. An aristocrat, dis ainful of money and\npogsesged of a strong eense of noblesse oblige, a Nation\ncontributor,\na\nMunoz, who was\na Greenwich Willoge bohemian and poet, appailed by the island's poverty,\npreasity\nknew h what had to be done. A magnificent thinker and speaker he came to power\nand\nwith the help of Rexford Tugwell, the US-\ngoing\nappointed Governor of the island,\nalso a thorough liberal\nand theMen Deal in Washing\nRaco\nialmossa\nsociety.\ningtalled in Puerto\nmodel\nliberal\nAgrigulture, which meant virtual peonage to the latifundista of the\nday was disdained for industrialism, a wage system that gave a man\ndignity, allowed him to\njoin a union, also\nencouraged and\nThat\nprotect&d by the government.\nPuerto\nRico lacked raw materials, a market, an industrial infrastructure, skilled\n(caught by - vision\nand a brilliant crew of young Puerto Ricans also\nworkers was not insuperablest\nMunoz improvised brilliantly\nand ingeniously to compensate for the island's inherent disadvantages:\ntax incentives, wage incentives, worker training courses\na constantly\nescalating mix.\n7\n7\nThe number of farmers dropped from\n220,000 to\n54,000 in 1974, in\nas they crowded into the cities\nwhat had been an agrácultural land\nGERALD FORD\n,\nToday,\n&\nS\nwhere the factories were.\ntwo thirds of\nPurto Rico S food had to be\nimported. Oranges are brought from Florida, while they rot around Lares and\nUtuado.\n#.\nsmoke\nHowever\nthe vision,\nimported,\nout of the\ncame under foreed\nit was\nnot born\nenvironment. It\ndranges wr, somewhered unmatural, subject to\nstrains, regining a brildip of\npatches and Band- Aids ever price.\ngiven and encouraged\nTringe benefits were\nwith little regard for\ne\nthe realities, as though Purto Rico was an advanced industrial society\nRican workers have 22\nthe\nToday, Puerto\nable to sustain\ncharges.\npaid holidays V. 10\nin the States. Counting maternity\nthat\nbenefits and the like, s ecretary of State Albors calculates ishand\n28-30%\n30%\namount to another\nadded onto the wage\nfringe benefits\nas against 15-18% on the mainland.\nThis abnormatity stresad competition, has led to a continuum\nof breadowns followed hypearches for newer devices generaly gimmistis for\namelication. Last week breakming came with the Bacardi distilling n Sa ha.\nPepin Bosch, the owner, is an old\nBacande\nto produce in\nfriend of Munoz but it costs $1.20 more per case\nits\nplant.\nSan Juan than in Macksonville, Florida\nAn Arthur Anderson study\nh vaid Broch\nslowed, that Ecosts me\n$4\nmillion more to have a distillery\nin Puerto Rico. What will I tell my stockholders? I love Puerto Rico but I\n8\n8\nalso love those $4 million.' Bacardi is woeth 400 jobs to the\nFORD is LIBRARY 078870\nannually\nland plus some $85 million A in excise taxes\nThe Government\nwill probably\nput another\nhunden\nBand-Aid on an already-contrived economic arrangement. Perhaps a, freight\nparticularly subsidy applicable since the government bought the maintime lines operating\nto the island. lawn\nThe case of the unions is classic. Part of the apparatus of a modern,\ndemocratic, socially-responsible industrial\nsociety, the goal for Puerto Rico to which Munoz aspired,\nis a strong labor movement and moved to this end. He encouraged trade\nto bail it out,\nuniomåsm, catered to it, used the government power to shelter 10g\nto keep\nspared\nthoppertunity to\nit goings and, 3° doing,\nPuerto Rico S trade ujion>\nmature and\nthe need to develop\nessential skills and\nToday,\ntoughness.\nThe trade union movement on the island\ntends to be weak and pa sive; neither leaders mov members have\nskills\nor\nstomachs for\na knock-down strike with strong picket linesm,\nthe.\nintimidating demons trations,\nWeakness\nsimiter\nleartimately the unions\nhas nurtured\ndeformities. 1) Unable to fight\nfight firty; sabobage and bombings are everyday\ntacticsz.\n2)\nalso\nThe weak state of the uions has been a golden opportunity for\nthe Communist wing of the Puerto Rican independence movement, the PSP\nthe Puerto Rican Socialist\nParty\nof Juan Mari Bras, Militant, disciplined, organized, the \"ari Bras\n9\n9\nC\nc omunists have, in effect, recome a service agency for striking unions,\nfurnishing pickets, demonstrationsm, riots, strategy, legal counselt Today of\nthe 20% of Puerto Rico's labor force that is unioniz d, about 3-4%\nis\nPSP\nmilitantly pro-PSP, while many of the others accept\nhelp,\nwhich is quickly and systematically volunteered.\nthe negative effect of the\nS abotage and bombings is considerable.\nand benefits\n\"We have rights that no one has ever worked for,\" a liberal Pherto Rican\nlawyer remarked one evening. \"We got NLRB before we even needed an NLRB\nand ditto to the Civil Liberties Commission.\" (Characteristically,\nupoh deciding\nto set up a permanent,\nMunoz\nthat the island needed\nstrong civil liberties watchdog,\ninvited the\nACLU's Roger Baldwin down\ny from New York to do the job.)\nGERALD FORD LIBRARY\ndistorting\nThe effects of Munoz S policy off foreign transplants\nsums to ^ 90 on endlessly. There is 8\ndistori\nthe present n ed\nto import 65% of the island's\nfoodstuffs including commodities\nlong and better produced in Puerto Rico, e.g. oranges, coffee.\nThere\nis the nead to import technicians while the University of Puerto\nRico continues,\nin the best European and Ivy League\ntraining\ntradition, to train students in the humanities of which there is already\na surplus.\n10\n10\nLast Friday in his study the Governor said: \"We have to develop a\nhere\nquality of civilization that is indigenous.\"\ntwofolds/\nThr\nis first develop new economic initiatoves, e.g. replace\nvanishing\nthe wage incentive, rjuvenate agriculture as a source of import substitution\ntaking\nand for long rangem really expedite family planning.\nshowing\nand employment, Meankinexvx Second, the Governor is shwoing a strong hand\nmikkkv with strikes, sabotage and with wgge demands.\nsecond, take a strong hand with strikes and sabotage. Use the recession as a guldxv\nthe ill wind fhat allows the government to roal back\naccreted practices and customs that\nsecond, take a strong with abuses and abusive\nbase.\nusing\ncustoms The recession is an excellent opportunity to break long-\nSola\nestablish di x practices. Thus the Governor simply rerfuse d to pay\nand made it stick by forcing through the Legislature\nraises to poli e and teachers, previously contracted form and got the\na law repealing the raises.\nafr Rush mount 3 dear read syst client cm/m\nthe y thin Q withing?\nGERALD R. LLBRARY FORD\nCOMITE AD HOC SOBRE EL DESARROLLO\nDEL ESTADO LIBRE ASOCIADO DE PUERTO RICO\nEdificio Intendente Ramirez - Oficina 802\nSan Juan, Puerto Rico 00905\nRESOLUTION\nIn accordance with the agreements adopted on June 1974\nby the Ad Hoc Advisory Group, the Puerto Rican part of this\nAd Hoc Advisory Group forwards to its United States colleagues,\nfor the corresponding joint action, its proposal for a Compact\nof Permanent Union Between Puerto Rico and the United States,\nenclosed herewith We recommend that the discussion of the\nproposed Compact constitute the first and principal item in\nthe agenda of our forthcoming meetings to be held in\nWashington, D.C. on the 8th, 9th, 10th and 11th of May.\nThe Proposed Compact of Permanent Union between Puerto\nRico and the Unit ed States considers, although it does not\npurport to exhaust, two of the three charges included in\nour Charter of September 1973, to wit:\n1) \"In order to implement the express desires of the\npeople of Puerto Rico freely made in the plebiscite\nof 1967, this Ad Hoc Advisory Group will be charged\nfurther to develop the maximum of self-government\nand self-determination within the framework of\nCommonwealth --a common defense, a common market,\na common currency, and the indissoluble link of\nUnited States citizenship.\n2) \"The Advisory Group will inquire into and report\nand recommend on the extent to which the statutory laws\nand administrative regulations of the United States\nshould apply in Puerto Rico.\"\nThe third and last charge refers to the following:\n3) \"As part of this Charter, the group must study alternate\nforms of participation in the federal decisions affecting\nthe people of Puerto Rico, which the people of Puerto\nRico ought to consider together with the presidential\nvote recommended by the first Ad Hoc Advisory Group.\n-more-\n-2-\nFinally, the Charter states:\n\"In keeping with the plebiscite law, no change in the\nrelationship recommended by the Group, together with\nthe recommendations of the first Ad Hoc Advisory Group\nwould be made unless previously approved by the people\nof Puerto Rico. \"\nOn the right to vote in Puerto Rico for candidates for\nPresident and Vice-President of the United States, the Puerto\nRican members of this Ad Hoc Advisory Group suscribe the\nrecommendation of the previous Group to the effect that\nthe electorate of Puerto Rico be consulted directly and\nseparately on this form of participation.\nWhile our proposed Compact of Permanent Union includes\nseveral provisions which provide alternate forms of partici-\npation, we do not intend to adjuge in it the issue of the pre-\nsidential vote. A majority of us consider preferable not to\ndelay the final approval of this Compact by the inclusion of\nprovisions (such as a constitutional amendment) that go beyond\nthe range of action of the Congress of the United States and\nthe people of Puerto Rico.\nApproved, Saturday, April 12, 1975.\nCOMITE AD HOC SOBRE EL DESARROLLO\nDEL ESTADO LIBRE ASOCIADO DE PUERTO RICO\nEdificio Intendente Ramirez - Oficina 802\nSan Juan, Puerto Rico 00905\nPROPOSAL OF THE PUERTO RICAN MEMBERS OF THE\nAD HOC ADVISORY GROUP ON PUERTO RICO\nAPRIL 12, 1975\nGERALD LISBARY FORD\nCOMITE AD HOC SOBRE EL DESARROLLO\nDEL ESTADO LIBRE ASOCIADO DE PUERTO RICO\nEdificio Intendente Ramirez - Oficina 802\nSan Juan, Puerto Rico 00905\nPROPOSAL OF THE PUERTO RICAN MEMBERS OF THE\nAD HOC ADVISORY GROUP ON PUERTO RICO\nAPRIL 12, 1975\nGERAED FORD LIBRARY\nCOMPACT OF PERMANENT UNION BETWEEN PUERTO RICO AND THE UNITED STATES\n1- The Free Associated State of Puerto Rico\nThe people of Puerto Rico constitute an autonomous body\npolitic organized by their own, free and sovereign will and in\ncommon agreement with the United States under the juridical\nstructure and official name of the Free Associated State of\nPuerto Rico.\nThe people of Puerto Rico, a cultural community of hispanic\nlanguage and tradition, citizens of the United States as well\nas citizens of Puerto Rico, have repeatedly decided and have\nexpressed --in their Constitutional Convention, in referendums\nand in a plebiscite specifically held to that effect-- their\npurpose to live in permanent union with the United States upon\nmutually satisfactory and just bases.\nIn fulfillment of the terms of that plebiscite and subject\nto the approval of the Congress of the United States and the\nratification in referendum by the people of Puerto Rico, it is\nhereby agreed to reaffirm, to consolidate and to improve the\nrelationship already established, by means of this Compact of\nPermanent Union Between Puerto Rico and the United States.\n-more-\n-2-\n2- Jurisdiction and authority of the Free Associated State of\nPuerto Rico. Delegation of certain powers to the United\nStates.\na. The Free Associated State of Puerto Rico has jurisdiction\nover the population and island of Puerto Rico, its seas, and the\npopulation, islands and seas adjacent to Puerto Rico.\nb. The right of the Free Associated State of Puerto Rico\nto govern itself is hereby recognized, as well as the right to\nexercise all the necessary powers and authority to govern the\npeople of Puerto Rico according to its own Constitution and laws,\nto represent them, and to make a compact with the United States\nas to the nature of its present and future political relations.\nc. In the exercise of their power of self-government, the\npeople of Puerto Rico now propose:\n1- To agree with the United States upon the norms,\nprovisions, and procedures set forth in this Compact\n2- To delegate to the United States the powers and\nattributes specified in this Compact\n3- To reserve all other powers and attributesof their\npolitical life to the Free Associated State of Puerto Rico or to\nthe people of Puerto Rico\n4- To recognize the Supreme Court of the United States\nas final judge of the scope of this Compact, of the applicable\nprovisions of the Constitution of the United States, and of\nwhether or not the laws conform to its provisions.\nd. The United States will have responsibility for and\nauthority with respect to foreign political affairs and defense\n-more-\n-3-\naffecting the Free Associated State of Puerto Rico. Nothing\nherein shall preclude the right of the Free Associated State\nto participate in international organizations as may be\nconsistent with the functions of the United States, or from\nmaking agreements with other countries with respect. to educa-\ntional, cultural, health, sporting, professional, industrial,\nagricultural, financial, commercial, scientific or technical\nrelations.\n-more-\n-4-\n3- Legal Title to Crown Lands and Navigable Waters\na. Lands\nAll property which may have been acquired in Puerto Rico\nby the United States under the cession of Spain in the treaty of\npeace entered into on December 10, 1898, and to which the United\nStates holds title, shall become the property of the Free Associated\nState; Provided, That the United States may continue to use\nfor public purposes that property which is now being used for such\npurposes; Provided, further, That the President may, from time to\ntime, convey to the Free Associated State of Puerto Rico those\nlands, buildings or interests in lands or other property now\nutilized by the United States which in his judgment are no longer\nnecessary for the purposes of the United States. The President\nof the United States may, from time to time, accept by grant\nfrom Puerto Rico, any lands, buildings or other interests or\nproperty which may be needed for public purposes by the United\nStates.\nb. Navigable Waters\nERALD FORD LIBRARY\nThe harbor areas and navigable streams and bodies of\nwater and submerged land underlying the same and around the\nIsland of Puerto Rico and the adjacent islands and waters not\nreserved by the United States for public purposes nor alienated\nin any other way, shall become and shall continue to be the\nproperty of the Free Associated State; Provided, That the laws\n-more-\n-5-\nof the United States for the protection and improvement of the\nnavigable waters of the United States and the preservation of\nthe interests of navigation and commerce, shall continue in\nforce as at present, unless contrary agreed to; Provided, further,\nThat nothing contained in this Act shall be construed so as to\naffect or impair in any manner the terms or conditions of any\nauthorizations, permits, or other powers heretofore lawfully\ngranted or exercised in or in respect of said waters and submerged\nland in and surrounding said Island and its adjacent islands\nby the Secretary of Defense or other authorized officer or agent\nof the United States.\n-more-\n-6-\n4- Internal Revenue\na. Except as provided in paragraph b of this article and\nnever\nin articles 6-b and 9 of this Compact, the internal revenue laws\nof the United States shall not have effect in the Free Associated\nState of Puerto Rico.\nb. The income tax laws of the United States may have effect\nin Puerto Rico only upon the income of residents of Puerto Rico\nderived from United States or foreign sources, but income tax\npayments to the Free Associated State of Puerto Rico upon\nincome derived from United States or foreign sources shall\nbe credited against federal income tax.\nFORD MOTOR LIBRARY UTVH\n-more-\n-7-\n5- Reciprocity Provisions\na. There shall exist full reciprocity between the Free\nAssociated State of Puerto Rico and the United States, the States\nof the Union and any other body politic of the United States,\nconcerning the following:\n1- Giving full faith and credit to official certifications,\ndocuments and judicial proceedings\n2- Accepting and honoring rights of removal and surrender\nof fugitives\n3- Mutually exempting from taxation the official obligations\nissued under the authority of any of the jurisdictions referred\nto above.\nb. In the interests of cooperation and efficiency, and when\ncompatible with their legal responsibilities and authority,\nofficials of the departments and agencies of the Free Associated\nState and officials of the departments and agencies of the United\nStates are directed to assist one another in the execution of\ntheir respective functions.\n-more-\n-8-\n6.\nCommon Citizenship - Its Rights and Duties\na. All persons born in Puerto Rico are citizens of the\nUnited States and have all the rights, privileges and immunities\ninherent in that citizenship as well as duties pertinent thereto.\nWhile residing in Puerto Rico, they shall also enjoy all the\nrights, privileges and immunities and shall have all the duties\nwhich the Constitution and the laws of Puerto Rico confer and\nimpose on its citizens. In case of a change of residence to any\nstate or other jurisdiction of the United States, the citizens\nof the Free Associated State of Puerto Rico shall have in addi-\ntion to their rights and duties as citizens of the United States,\nall the rights, privileges and immunities, as well as the duties\nof citizenship established by the Constitution and the laws of\nthat state or jurisdiction. Likewise, any citizen of the United\nORD\nStates who changes his residence to Puerto Rico shall, in addi-\nLIBRARY\ntion to his rights and duties as citizen of the United States,\nacquire all the rights, privileges and immunities as well as the\nduties established by the Constitution and laws of Puerto Rico.\nb. The laws of the United States which provide loans and\nother assistance for the benefit of the health, education,\nhousing, opportunities for employment, and social welfare of the\ncitizens of the United States shall be applicable to the citizens\nof the United States residing in the Free Associated State of\nPuerto Rico. When such laws require from the states or the\n-more-\n-9-\ncitizens therein, special contributions in order to receive\nsuch benefits, the Free Associated State or its citizens shall\nmake the payments required by such law.\nc. The Free Associated State shall contribute to the\nmaximum of its economic capacity to improve the health, educa-\ntion, housing, opportunities for employment, and social welfare\nof the citizens of the United States residing in Puerto Rico.\nd. A system of contributory payments to the Treasury of\nthe United States shall be initiated, at the appropriate time,\nin gradual ways which will not substantially impede the economic\nand social development of Puerto Rico, based upon disbursements\nwhich shall be made by the Legislature of Puerto Rico from the\ngeneral fund or any other sources subject to the legislative\naction of Puerto Rico. (See Annex A.)\n-more-\n-10-\n7- Security and Common Defense\na. Laws of the United States referring to defense and\nnational security shall apply to the Free Associated State in\naccordance with their terms. The President and the Governor will\nconsult and cooperate to facilitate objectives of defense and\nnational security.\nb. When the President of the United States considers\nthat the security and common defense require the acquisition\nof properties in Puerto Rico, he shall thus certify to the\nGovernor of the Free Associated State, who shall proceed to\nacquire by expropriation or by any other means the required\nproperty and place it at the disposition of the Government of\nthe United States.\n-more-\n-11-\n8- Currency\nThe currency of the United States shall be the exclusive\ncurrency of Puerto Rico. The laws of the United States relative\nto currency, coinage, gold and silver shall apply to Puerto Rico,\nin accordance with their terms.\nR.FORD LIBRARY\n-more-\n-12-\n9- Common Market\na. Economic, trade and commercial relations between the\nUnited States and Puerto Rico shall be conducted within the\nframework of the common market heretofore established between\nthe United States and Puerto Rico. The United States shall\nnot impose restrictions, tariffs, or taxes of any kind on\narticles imported into the United States from Puerto Rico, nor\nshall Puerto Rico impose restrictions, tariffs, or taxes of any\nkind on articles imported into Puerto Rico from the United\nStates.\nIn recognition of the reciprocal benefits the United States\nand Puerto Rico have derived from expanding trade within the\ncommon market, but in recognition, also, of worldwide interest\nin trade expansion, of United States international obligations\nand interests with regard to foreign trade liberalization, and\nof Puerto Rican interest in the expansion of its foreign trade,\nit shall be the purpose of the United States and of Puerto Rico\nto pursue policies of foreign trade expansion and liberalization\nin a manner compatible with the continued expansion of trade\nand commerce within their common market economic community.\nb. Except as hereinafter provided, laws and tariff provi-\nsions of the United States on articles imported from foreign\ncountries shall be applicable in Puerto Rico.\nc. The income from customs duties, licenses for imports,\n-more-\n-13-\ntariffs and taxes collected in Puerto Rico, as well as internal\nrevenue taxes which may be collected on articles transported from\nPuerto Rico to the United States, shall be paid into the\nTreasury of Puerto Rico, after deducting the expenses of such\ncollections. The terms \"income\" and \"taxes\" referred to in the\npreceding sentence shall not be understood in any limited way\nand they extend to every kind of revenue, direct or indirect,\nof any nature.\nd. Notwithstanding the provisions in Section a. and b. of\nthis article, Puerto Rico shall continue to enjoy the right to\nlevy tariffs upon or otherwise to restrict the import of coffee\nfrom foreign countries or the United States; and in a manner\nconsistent with the international obligations of the United\nStates and after prior consultation and coordination with the\nfederal authorities concerned, Puerto Rico may levy, increase,\nreduce or eliminate tariffs on finished, semi-finished, agri-\ncultural or raw materials imported directly from foreign countries\nor transshipped through the United States; Provided, That any\narticle containing material from foreign sources imported into\nPuerto Rico at a tariff rate lower than the tariff rate\napplicable in the United States shall not be sold or shipped\nto any other point in the United States customs territory\nunless the appraised value on sale or shipment of said article\ncontains at least 35 percent in value added in Puerto Rico. The\nsame principle shall apply to articles containing material from\n-more-\n-14-\nforeign sources exported to Puerto Rico from the United States.\ne. The consultation and coordination alluded to in Section d.\nshall be undertaken with the purpose of facilitating internal\ncustoms procedures, proposed trade agreements and commercial\narrangements with foreign countries which Puerto Rico may be\ninterested in making that may involve tariff adjustments, as\nwell as international trade negotiations undertaken by the\nUnited States referred to in Section f.\nf. In international trade negotiations that the United\nStates may undertake, account shall be taken of the commercial\nand industrial interests of the Free Associated State, as well\nas of its stage of economic development. With regard to\ncommercial treaties it may enter into, the United States, in\nagreement with the Free Associated State, shall seek to have\nextendend to the exports of Puerto Rico the most favorable\nconsideration. Should the Free Associated State so desire, and\nafter consultation and agreement, the United States shall seek\nto have Puerto Rico accepted as an associated developing state\nwhich the developed countries recognize as qualifying fully\nto participate in all benefits from any regional or worldwide\nsystem of preferences for developing countries.\nAMOUNT\n-more-\n-15-\n10- Entry of Aliens into Puerto Rico\na. Immigration rules, regulations and procedures of the\nUnited States shall apply to Puerto Rico in accordance with\ntheir terms, except when the President of the United States and\nthe Governor of the Free Associated State may from time to time\nagree, in the light of economic and demographic considerations\napplicable to the Free Associated State, to limit the number of\naliens who may be admitted to Puerto Rico or to increase the\nquota of aliens who may be admitted to Puerto Rico as resident\naliens to meet the needs of the Free Associated State for scien-\ntific, professional, technical, sporting, cultural, industrial,\nagricultural, and educational purposes, or for reasons of\nhospitality to political refugees.\nb. Nothing included in any of the provisions of this\narticle shall be applicable nor shall affect in any way the\ncitizens of the United States and their right of free transit\nbetween the United States and Puerto Rico.\n-more-\n-16-\n11- Representation of Puerto Rico\na. The Free Associated State shall be represented in the\nSenate and the House of Representatives of the United States\nby one representative in each House, who shall be elected for that\nposition according to the laws of Puerto Rico. They shall have\na seat in the Senate and in the House of Representatives of\nthe United States and shall receive offical acknowledgement from\nall the departments of the Government of the United States upon\npresentation by the Department of State of a certificate of\nelection issued by the Governor of Puerto Rico. Such representatives\nshall have the qualifications established for members of the\nSenate and the House of Representatives, respectively.\nb. In case of a vacancy in either of these positions, it\nwill be filled for the rest of the term according to the laws\nof Puerto Rico.\n-more-\n-17-\n12- Applicability of Federal Laws\na. The laws of the United States applicable to the Free\nAssociated State on the date of approval of this Compact shall\ncontinue in effect except and to the extent repealed or modified\nby this Compact, or incompatible with it, and except as here-\nafter modified, suspended or repealed in accordance with law.\nb. Laws hereafter enacted by the Congress, unless other-\nwise provided by this Compact, shall not be applicable to the\nFree Associated State unless such laws explicitly refer to the\nFree Associated State and except as provided in sections C\nand d of this Article 12.\nC. Laws of the United States enacted after the effective\ndate of this Compact which are applicable to the Free Associated\nState pursuant to the powers and functions expressly delegated\nto the United States in this Compact, shall apply to the Free\nAssociated State unless and except to the extent that they are\nincompatible with this Compact except as otherwise provided in\nsection d of this Article 12, and except as may otherwise be\nprovided by order of a court of competent jurisdiction.\nd. In the event that the Free Associated State, prior to\nthe enactment of any law of the United States after the effective\ndate of this Compact, shall notify the President of the United\nStates, the Speaker of the House of Representatives and the\nPresiding Officer of the Senate of the United States that it\nobjects to the application of such law to the Free Associated\n-more-\n-18-\nState, and shall state its reason for such objection, such law\nshall not be applicable to the Free Associated State unless and\nuntil, by joint resolution, the Congress shall find and declare\nthat the application of such law to the Free Associated State is\nessential to the interests of the United States and is compatible\nwith the provisions and purposes of this Compact; Provided, That\nthis paragraph shall not apply to laws which directly affect the\nrights and duties of citizens and the security and common defense,\nnor to foreign affairs and currency as specified in this Compact.\ne. Rules, regulations and orders issued by the departments\nand agencies of the United States after the effective date of\nthis Compact shall not apply to the Free Associated State unless\nand except to the extent that they are compatible with this\nCompact. In the event that the Free Associated State shall\nnotify a department or agency of the United States that it\nobjects to the application of any such rule, regulation or\norder to the Free Associated State, such rule, regulation\nor order shall not be applicable to the Free Associated State\nunless and until the department or agency shall find and declare\nthat the application thereof to the Free Associated State is\nessential to the interests of the United States and is compatible\nwith this Compact. Any such determination shall be subject\nto judicial review in accordance with law.\nFORD VIBRARY\n-more-\n-19-\n13- Assignment of Federal Functions to the Free Associated State\na. The Government of the United States may from time to\ntime transfer to the Free Associated State the total or partial\nperformance of functions delegated to the United States by this\nCompact, provided that the Goverment of Puerto Rico agrees to\nperform them.\nExcept as otherwise agreed to, the Government of Puerto\nRico, its agencies and dependencies shall assume the expenses\nand responsibilities inherent in the assignment received.\nThe officials and employees of the Government of the\nUnited States in charge of the functions on the date of their\ntransfer shall retain the rights previously acquired by reason\nof their employment.\nb. The Congress of the United States, in appropriations\nlegislation applicable to the Free Associated State, shall pro-\nvide maximum flexibility for the use of such funds, consonant\nwith the purposes and objects of the appropriations, so that the\nuse of such funds may be adapted to the special circumstances\nand conditions relevant to the administration of the program\nin the Free Associated State.\n-more-\n-20-\n14- Joint Commission\na. There is hereby created a Joint Commission for a term of\nfive years, composed of six (6) members, three (3) members and\ntheir successors appointed by the President of the United States\nand three (3) members and their successors appointed by the\nGovernor of Puerto Rico. The Commission shall adopt its own\ninternal regulations.\nb. This Joint Commission has as its principal assignment\nto help in the perfection of the legal and administrative relations\nbetween the United States and Puerto Rico in agreement with the\nfundamental objectives expressed in this Compact and, to that\neffect, shall have the following specific assignment:\n1- The Commission shall study the desirability of\nretaining, modifying or eliminating the application of specific\nFederal laws to the Free Associated State and shall give priority\nin such study to the laws pertaining to communications, coastal\nshipping and administration of selective service. The Commis-\nsion shall submit its reports to the President and to the\nGovernor. When the report recommends the discontinuance of the\napplicability of a particular law or part of law to the Free\nAssociated State, and the President of the United States and the\nGovernment of Puerto Rico concur with the recommendation, it shall\nbe submitted to the Congress of the United States. If ninety days,\ncounted from the date when Congress receives the recommendation,\nshall elapse without either House rejecting it, said law shall\ncease to have effect in Puerto Rico.\n-more-\n-21-\n2- The Commission shall also study the possible transfer\nof federal functions to agencies of the Free Associated State, in\naccordance with the provision of Article 13-a and shall make the\npertinent recommendations. When they involve the transfer of\nparticular federal functions to the Free Associated State, such\nrecommendations shall be submitted to the President of the United\nStates and the Governor of the Free Associated State. If both\nagree with the recommendations, the President shall by Executive\nOrder provide for such transfer and shall transmit such Execu-\ntive Order to the Congress. Any such Executive Order shall be-\ncome effective at such time as it shall specify, unless either\nHouse of Congress, within ninety days from receipt of the\nExecutive Order, shall object.\nc. The Commission shall have a professional and technical\nstaff and may use the services of the research institutions which\nit deems convenient; and is hereby authorized to request and\nreceive the cooperation of any agency, department, or bureau\nof the United States or of Puerto Rico.\nd. The Commission shall have an annual budget, to be\nshared in equal parts by the Government of the United States\nand the Government of Puerto Rico. The Commission shall formulate\nits own budget proposal annually. The sum of $\nis appropriated for the first two years of operation.\n-more-\n-22-\n15- Judicial Review\na. The courts of the United States and of the Free\nAssociated State shall have concurrent jurisdiction with respect\nto justiciable questions arising under this Compact, and actions\ninstituted in the courts of the Free Associated State may not\nbe removable to a federal court on the grounds that provisions\nof this Compact are in issue.\nb. The Free Associated State may institute and maintain\nproceedings in any court of competent jurisdiction to obtain\nrelief authorized by law with respect to any law or action\nalleged to be in contravention of this Compact, but the right\nof the Free Associated State to maintain such proceedings shall\nnot prevent any person in any proceedings from asserting a\nclaim under this Compact.\nc. Final judgments and decrees entered by the highest court\nof the Free Associated State in which judgment could be had, which\nare wholly or partly based on questions of federal law or the\ninterpretation of this Compact shall be subject, only as to these\nquestions, to review by the Supreme Court of the United States\nin like manner as judgments of the courts of last resort of the\nstates of the Union.\n-more-\n-23-\n16. United States District Court\na. There shall exist a United States District Court for\nthe Free Associated State whose jurisdiction shall be the same\nas that of other District Courts of the United States, including\nthe jurisdiction over the naturalization of qualified aliens\nand residents in the Free Associated State.\nb. All the procedures, pleadings, and records shall\nbe conducted in Spanish, unless the Court, in the interest of\njustice, shall otherwise determine.\nc. The selection of the jurors shall be conducted and\ntheir requisites shall be guided in accordance with the laws\nof the United States, provided that such selection and requi-\nsites are consistent with Section b of this article.\nd. The United States District Court shall not intervene\nto prevent the establishing or collecting of any tax imposed\nby the laws of the Free Associated State.\n-more-\n-24-\n17. Labor\na. The public policy of the United States and of the\nFree Associated State is declared to be that the minimum wage\nin Puerto Rico be equivalent to the minimum wage in the United\nStates as soon as economic conditions in Puerto Rico so permit.\nFrom the moment in which this Compact becomes effective,\nthe minimum wage of employees in Puerto Rico who work in\nshipping and aviation industries or enterprises, and of those\nthe products or services of which are sold or rendered sub-\nstantially in the United States, shall be covered by the pro-\nvisions of the Fair Labor Standards Act or any other general\nminimum wage law of the United States. In all other cases,\nthe authority to fix minimum wages and working hours lies in the\nFree Associated State, which assumes the responsibility to reach,\nas soon as possible, the goal set in the previous paragraph.\nb. The Free Associated State of Puerto Rico shall have\nexclusive jurisdiction over all matters pertaining to labor-\nmanagement relations, except for the shipping and aviation\nindustries, which shall be covered by the appropriate federal\nlaws, as may be determined by the Congress of the United States.\nc. The Free Associated State of Puerto Rico shall have\nexclusive jurisdiction over all matters pertaining to laws\nand regulations on occupational health and safety, except for\nGERALD\n-more-\n-25-\nthe shipping and aviation industries, which shall be covered\nby the appropriate federal laws, as may be determined by the\nCongress of the United States.\n-more-\n-\n-26-\n18. Ecology\nThe primary authority to regulate the ecology and\nenvironmental quality in Puerto Rico shall reside in the\nFree Associated State of Puerto Rico.\n-more-\n-27-\n19. Effective Date\nIn order to become effective, this Compact shall require:\na. Its approval by the Congress of the United States\nb. Its approval by the electorate of the Free Associated\nState in a special referendum called to that effect by the\nLegislative Assembly of Puerto Rico.\nc. The official proclamation of its approval by the\nelectorate of the Free Associated State and the determination\nof its effective date, which shall be determined by agreement\nbetween the President of the United States and the Governor\nof Puerto Rico, to have effect within a period not longer than\none year following its approval by the electorate.\n-more-\n-28-\n20. Transition\nNothing in this Compact shall be deemed to interrupt\nor impair the jurisdiction of the courts or quasi-judicial\nagencies over matters pending before them at its effective\ndate nor to affect, until their normal expiration, any\nfranchises, permits and other grants issued prior to such\neffective date. Actions by either the United States or the\nFree Associated State prior to this Compact which would be\nlawful at its effective date, shall not be affected in any\nway by its approval.\nLIBRARY\n-more-\n-29-\n21. Amendments\nThis Compact can be amended only by mutual agreement\nand always with the approval of the electorate of Puerto\nRico.\n-o0o-\nA -1\nANNEX A\nSince 1952, the idea has been expressed that the Common-\nwealth, by means of voluntary agreements, should make contrib-\nutory payments to the economic burdens of the Union between\nthe United States and Puerto Rico, in a gradual manner,\nfrom the moment that Puerto Rico can so contribute without\nsubstantial injury to its economic and social development.\nPuerto Rico receives from the Government of the United States\nvaluable financial, social, and other aids, and it is just and\nproper that it contribute as soon as it is able to do so to the\nTeasury of the United States, from which these benefits come.\nThis principle is contained in the Governor's Message to\nthe Legislature in 1952. It is also included in a Resolution\non status, of December 3, 1962, of the Legislative Assembly of\nPuerto Rico, approved with the endorsement of all the parties,\nwhich expressed it thus:\nWhereas, those who support the Commonwealth status\nconceive its maximum development in permanent union\nwith the United States of America under the fol-\nlowing principles:\n....\nThe adoption of a formula under which the people\nof Puerto Rico will contribute to defray the general\nexpenses of the United States Government in a manner\ncompatible with the stability and economic growth of\nPuerto Rico.\nThe new Compact should contain a formula to determine in\nwhat future circumstances such payments can and ought to begin,\n-more-\nA - 2-\nby the authority of the Compact, from the internal sources\nwhich the Legislature may determine, and in what gradual way\nand to what degree those payments should be developed. Various\nformulas have been proposed by the Puerto Rican members of the\nAd Hoc Committee; but the group is not entirely satisfied with\nany of them and considers that better ones can be developed.\nWe reproduce below the proposed formulas and we invite the\npeople to suggest, in public hearings or any other way, other\nformulas or to improve those presented.\nThe formulas proposed up to the present are the following:\n1. The Free Associated State shall initiate a system\nof contributory payments to the Federal Treasury when\n80% of the families in Puerto Rico have an annual in-\ncome no smaller than $4,000, in terms of the present\npurchasing power of the dollar.\n2. The Free Associated State shall initiate a system\nof contributory payments to the Federal Treasury when\nthe average annual family income in the Free Associated\nState reaches 80% of the average annual family income\nin the state of the United States with the lowest\nfamily income.\n3. The Free Associated State of Puerto Rico shall\ncontribute to the Federal Treasury a given percentage\nof the average of its Total Net Income during the five\nyear period immediately preceding the year to be selec-\nted to begin the Free Associated State contribution.\nIf this contribution were initiated in 1976, projected\nto the year 2000, the base would change five times,\nraising the amount of the Free Associated State contri-\nbution, proportionally with the increase in the Total\nNet Income.\nThis procedure will continue to be applied\n-more-\nA -3-\nindefinitely --changing the base every five years--\nuntil the Free Associated State contribution reaches\na reasonable amount, which, it is estimated, will\nnever exceed the average amount of the federal aid\nreceived during the preceding five years.\n4. No definite payment in exact amounts of money\nwould be made; the contribution would consist in\nthe value of the rent for the lease of all the real\nestate which passed from the Spanish Crown to the\nGovernment of the United States in 1898, and which\nshould have always really belonged to Puerto Rico,\nand in the value of services rendered by Puerto Rico\nto the United States, including the execution of\nfederal functions which the Free Associated State\nagrees to undertake.\nThe contributory payments to be made by authority of\nthis Compact, which do not consist of taxes imposed by the\nCongress of the United States, shall be raised by the\nappropriations and from the funds that the Legislature of\nPuerto Rico may determine.\nWe repeat our invitation to improve this as well as\nany other part of the proposed Compact bill of the Puerto\nRican group of the Ad Hoc Committee.\n-o0o-"
}