CHAPTER I

A. GENERAL

This chapter discusses the economy of the Virgin Islands, its population, labor force, industry, and traffic flow. Chapter II treats with its transportation services, and chapter III examines ocean freight rates from the U.S. mainland ports to those in the U.S. Virgin Islands, mainly St. Thomas.

1. Geography

The U.S. Virgin Islands (hereinafter referred to as either "Virgin Islands" or simply the "Islands") consists of about 50 islands and cays of which only three are of significant size and importance: St. Croix, St. Thomas, and St. John.1 The other islands are uninhabited. By sea, the Islands lie 1,434 nautical miles southeast of New York; 991 nautical miles from Miami, Fla.; and 40 nautical miles east of Puerto Rico at the nearest point. They are 75 air miles from San Juan.

The three major islands have a combined land area of 132 square miles. St. Croix, with 84 square miles, is 28 miles long and up to 6 miles wide; St. Thomas, with 28 square miles, is 13 miles long and up to 4 miles wide; and St. John, with 20 square miles, is 9 miles long and up to 4 miles wide. St. John lies about 3 miles east of St. Thomas, and St. Croix is about 40 miles south of the others.

The major ocean terminals for common carriers by water are located at Charlotte Amalie, St. Thomas,

1 The Governor of the Virgin Islands, 1965 Annual Report (Washington: GPO, 1965), p. 3.

and at Christiansted and Frederiksted, St. Croix. On St. Thomas and St. John, the mountain ridges run east and west and rise to 1,500 feet. The mountains slope steeply both north and south and leave little flat land for farming or urban settlement. On St. Croix, where the land slopes gradually to the southern shore, relatively large areas are suitable for farming, residential, and industrial uses. Nature has endowed these Islands with an excellent year-around climate.

2. Population

The Virgin Islands, like the rest of the Caribbean, are experiencing a population explosion which is attributable to births as well as immigration. The U.S. Census reported an increase in the population of the Virgin Islands from 26,665 in 1950 to 49,742 in 1965, or a 15year growth of 87 percent. In 1967, the Governor's Bureau of Statistical Services estimated the population at 60,300. This, compared with the 1960 population of 32,099, shows a 7-year growth of 88 percent. Thus, the Island's population has almost doubled in the 1960–67 years. This growth trend exceeded by far the estimated annual average growth of 8 percent of the U.S. population in the 1960-65 period (The 1965 population of St. Croix was 22,020, St. Thomas 26,375, and St. John 1,347.) However, considering the limited land mass

2 Virgin Islands Development Board, Overall Economic Development Program (St. Thomas: 1966), p. 11.

3 The Chase Manhattan Bank, The U.S. Virgin Islands (New York: 1968),

p. 8.

4 Virgin Islands Department of Health, Bureau of Statistical Services, Vital Statistics 1964-65 (Charlotte Amalie: 1965), p. 9.

of the Virgin Islands, the territory's rapid population rise can hardly be a phenomenon of more than relatively short duration. Of greater significance demographically is the division of the inhabitants of the Virgin Islands into two major population groups, one in St. Croix and the other in St. Thomas. Their separation by 40 miles of sea cannot be easily overcome despite air travel and the wide communication provided by telephone, radio, and television. This makes for two insular communities which, aside from the influence exerted by the varying topography of the two islands, have somewhat different characteristics with regard to social life and commercial pursuits.

3. Labor Force

The tourist industry has been the major stimulant to employment in recent years and is now the Islands' largest employer. The U.S. Federal Census of Population for 1960 reported a labor force of 11,334, representing 35.3 percent of the total 1960 population. The total number actually employed in 1960 was 10,845, or 95.6 percent of the total labor force. The labor force was distributed as shown in table I-1 below. The total labor force grew over 150 percent between 1960 and 1967, from 11,334 in 1960 to 26,775 in 1967 6 largely to support the continually growing tourist industry.

TABLE 1-1

5

4. Family Income, Wages, and Per Capita Income

The average number of persons per family in 1960 was five. The 1960 Census of Population disclosed that the Virgin Islands were a low-income area with a consequently depressed standard of living for over 50 percent of the wage earners in the population. Under the income distribution pattern, 34 percent of wage earners reported incomes of less than $1,000 while another 24 percent earned from $1,000 to $2,000. In 1959, only 3 percent of the population had incomes of $5,000 to $6,000, while 2 percent reported incomes of 10,000 to $15,000. This was a substantial improve. ment over 1950 when 58 percent of the employees earned less than $1,000.

Table 1-2 compares the 1959 income distribution of families and unrelated individuals with the 1950 census report. The wage level in the Virgin Islands took an upward turn beginning in 1962 when the minimum wage was increased to $1 an hour.

Political and military considerations prompted the acquisition of the Virgin Islands from Denmark during World War I, and for many years after the pur. chase, little thought was given to any systematic development or diversification of the Islands beyond the sugar monoculture stage. However, during the past decade and a half, the Virgin Islands have experienced truly phenomenal growth. Per capital income increased 122 percent in the 7-year period 1960-67 (from $957

TABLE 1-2

Income Distribution-Virgin Islands, Family and Unrelated Individuals: 1950 and 1959

1,118 10.4