PUERTO RICO'S STATUS DEBATE

Author: Amy Thornbury

CHAPTER TEN

A Status Plebiscite and the Birth of
the Partido Nuevo Progresista: the 1960s

As part of the great American economic structure,
. . . we must be technological. We must be equal
citizens. We must have statehood. And we will
have all these things. It is just a matter of time.
-- Luis A. Ferré

The momentum which the statehood effort had gained in the late 1950s carried through to the sixties. Luis Ferré was one of the most active members of the statehood movement through this period, still serving as vice-president of the PER and running for various political posts. As a gubernatorial candidate in 1960, he campaigned against the incumbent governor, Muñoz, arguing that statehood would not cost the island as much as Muñoz claimed. Specifically, Muñoz believed that the "price" of statehood for Puerto Rico in terms of lost revenues and the imposition of federal taxes would be $188 million annually. Ferré countered with his calculations that that figure would run at $51 million annually. Within a month of making that estimate, Ferré used the help of a consulting firm to revise the figure to just $18 million a year. The calculations are as follows:
Commonwealth Statehood

(Actual) (Muñoz's estimates) (Ferré's estimates)
federal payments $313.6* 292.8 358.0
less federal taxes 60.2 227.2 156.0
other fed. receipts 35.0 35.0 35.0
balance favoring
Puerto Rico 218.4 30.6 167.0
+revenues from
removal of sugar quota: 33.0 200.0
"price" of statehood 187.8 18.4
* All figures in millions of 1960 dollars

The "price" of statehood was determined as the difference between the revenues of the Commonwealth and the estimated revenues under statehood. Muñoz, the founder of Puerto Rico's Commonwealth, had a very different estimate from Ferré, placing the cost of statehood at $187.8 million. Even if he added in the revenues from the removal of the sugar quotas under statehood, as Ferré did, the cost would still be $154.8 million. Ferré's total, on the other hand, is just $18.4 million. The wide discrepancy can be attributed to the different status aims of each politician and to the lack of any hard and fast guidelines to predict what the actual revenues and costs of statehood would be. However, Ferré's close working relationship with mainland Republicans throughout his career would have provided him with relevant information on which to base his estimates, since the U. S. Republican presidential platform for 1960 established that party's support for Puerto Rican statehood as soon as a majority of the islanders requested it.
The 1960 elections on the island were yet another victory for the PPD, which received 58% of the vote, while the PER received 32%. Although his party lost, Ferré interpreted the results more as a "vindication" for the PER than the PPD. The PER gained a 43% increase in votes since 1956, from 175,000 to 250,000 votes, while the PPD gained only 6% more than its 1956 total. Ferré attributed the increase in support for his pro-statehood party in part due to the rise in unemployment under Muñoz, and accurately predicted that a new age of a two-party political system had begun on the island.
Another factor in the decline of the PPD in the early 1960s was Muñoz's admission that the Commonwealth status he had created was flawed. In a letter to President John F. Kennedy dated 1962, Muñoz wrote: 'We have become increasingly, and now acutely aware, that the [Commonwealth] arrangement was not perfect.' Muñoz urged the U. S. to consider the alternatives of statehood and independence 'so that no doubt whatever may be entertained in Puerto Rico, in the United States or elsewhere that the basic principles of self-determination has [sic ] been thoroughly carried out.' The best way to ensure the self-determination of Puerto Rico's status was by holding a status plebiscite, which Muñoz proposed for the summer of 1963. The plebiscite would not be held, however, until 1967.
Muñoz explained his change of heart towards Puerto Rico's status as a result of the Commonwealth's unsatisfactory experience during its ten years of existence, as well as the recent trend of granting independence to former colonies in the Caribbean, such as Jamaica and Trinidad-Tobago. Significantly, he also pointed to the growth in the ranks of the PER as a sign that statehood sentiment was rising on the island. Statehood was reportedly favored by most of the federal employees in Puerto Rico, totalling about 7,300 workers, by some of the mainlanders who had moved to Puerto Rico (mostly the corporate managers who set up shop in Puerto Rico under the Operation Bootstrap plan), by many blacks in Puerto Rico, and, most of all, by the growing middle class. This last group was characterized by a newfound economic prosperity, bilingualism, and stateside education. Free migration to the mainland was considered the most attractive part about statehood to working class advocates of statehood.
Despite the desire to change Puerto Rico's status, the economic arrangements of Commonwealth presented a no-win situation which perpetuated the status quo. As Operation Bootstrap raised per capita income of Puerto Ricans to unprecedented levels, statehood became more feasible in the sense that the islanders could afford to pay federal taxes. At the same time, the political advances in terms of self-government made independence more popular, but the economic uncertainties of this status kept most people glued to the status quo.
Operation Bootstrap helped boost Puerto Rico's economy by $60 million in 1963 as it brought 302 new factories to the island in that fiscal year. By 1963, Puerto Rico was home to branches of fifty of the mainland's Fortune 500 companies. The benefits of closer association with the U. S. were beginning to translate into more money in the Puerto Ricans' pockets, for the industrial development meant increased jobs in the factories as well as the support industries (restaurants, banks, and so forth) on the island. The increased prosperity boosted pro-statehood sentiment.
The 1964 elections testified to the increase in the ranks of the estadistas. Out of 805,025 total votes, the PER gained 277,182 -- still a distant second to the PPD, which won with 479,479 votes, but an 11% increase since the 1960 elections. Puerto Rico elected a new governor for the first time since 1948, as Muñoz stepped down and allowed Roberto Sánchez Vilella to run on his party's ticket. Sánchez Vilella would prove not to be as popular as Muñoz with the electorate, and would enjoy only one term as governor, compared to Muñoz's four.
The period from 1965 to 1968 witnessed a flourish of activity in the statehood movement. In 1965, estadistas formed the Movimiento Democrático Estadista (Democratic Statehood Movement) to combine the goals of statehood with social reform. Ferré led this movement, rallying support among the proletariat by reminding them that statehood would bring the minimum wage to the island. However, the minimum wage would also make the island less attractive to mainland investors in search of low-wage labor. The new group also solicited support from the university sector, founding faculty and student organizations for the support of statehood.
The youth element was important to the new impetus for statehood. The new class of educated, young professionals on the island was growing tired of an aging bureaucracy dominated by "Muñozism." As one young Puerto Rican professional put it, 'You make suggestions for ways of doing things, but they [the bureaucrats] don't listen. They are still living in 1940, but this is 1968.' It was the holders of this line of reasoning which Ferré helped to mobilize by 1968.
* * *
In 1964, the first-ever joint U. S.-Puerto Rico committee on resolving Puerto Rico's status formed, appropriately named the U. S.-Puerto Rico Commission on the Status of Puerto RIco (STACOM). On the U. S. side, there were seven official members who were joined by a cadre of academics to research the topic, while the Puerto Rican side also had seven members, including three members of the PPD (one of whom was Muñoz) to represent the pro-Commonwealth view, two members from the pro-statehood PER (García Méndez and Ferré), and just one representative for the PIP. After lengthy and careful research, the committee reported the following conclusions about Puerto Rico's status in 1966:

(1) The U. S.-Puerto Rico relationship has been and should always be based on policies of mutual consent and self-determination.
(2) Congress must be fully aware of the Puerto Rican people's wishes in order to work within them in
carrying out goals.
(3) As U. S. citizens, Puerto Ricans have the right to participate in the nation's decisions.
(4) Commonwealth, statehood, and independence are equally good alternatives.
(5) Each status alternative differs in the socio-cultural influences it represents.
(6) Each alternative is committed to the preservation of Puerto Rican culture and the Spanish language.
(7) Puerto Ricans themselves must decide which alternative is best.
(8) Continued economic growth is imperative to the resolution of Puerto Rico's unemployment and
infrastructure problems.
(9) If political status change is abrupt, economic activities will be severely disrupted; independence would
be more costly because Puerto Rico would lose its financial assistance.
(10) Economic changes as a result of status change would take a minimum of fifteen years, unless rapid
economic growth occurs before the change in status occurs.
(11) In order to change their status, Puerto Ricans must express their will in a formalized plebiscite.
In sum, STACOM's recommendations pointed to the rational determination of a mutually favorable relationship between the U. S. and Puerto Rico which would take into account the various economic, social, and political characteristics which were deeply ingrained in Puerto Rico's current status. Unfortunately, their conclusions were broad and offered no concrete solutions. Ferré recalls that the Commission "refused to say anything binding" about the future of the Commonwealth. The most important of their conclusions was that statehood was acknowledged as a realistic possibility for the island. To date, the only outcome of their labor has been the holding of a plebiscite in 1967, a plebiscite which was already under consideration before their study took place. An ad hoc advisory committee was formed in the early 1970s at STACOM's request, but its recommendations came to naught as well.
Meanwhile, the statehood effort during this period was practically embodied by Ferré. Ferré, a multimillionaire industrialist, has been called everything from a "messiah who would lead the underprivileged to a 'new life'" to "a combination of Abraham Lincoln and Henry Ford." In spite of his personal wealth, Ferré became immensely popular with the urban poor, campaigning in the poorest slums, such as La Perla in San Juan, and promising social reform if he was elected. Ferré supported populist programs which would benefit every social sector, an appeal which echoed Muñoz's strategy in the late 1930s. Statehood, he argued, would liberate the masses from second-class citizenship and general misery. In this sense, he appealed to an "economic morality," or the notion that statehood would bring first-class dignity and economic well-being, despite the fact that it would impose $188 million a year in the federal income taxes.
Likewise, Ferré brushed off the cultural problems associated with statehood. To him, the idea of a Puerto Rican patriotism was not incompatible with simultaneously having a larger patriotism for the U. S. Following this line of reasoning, Ferré invented the term estado jíbaro, referring to a proposed form of statehood in which Puerto Ricans would retain their Spanish language and cultural heritage while joining the ranks of the other fifty states.
Even those who opposed Ferré had to admit that he was bringing a new degree of ideological coherence to the statehood party. In addition, he took an aggressive attitude of opposition to the perpetuation of Puerto Rico's status stalemate. In Ferré's opinion, 1964 represented a turning point in which it became evident that the people of Puerto Rico were growing tired of Muñoz's "dictatorship." It was up to the PER to provide an alternative to both the PPD and the unpopular independence parties.
The true test for Ferré's efforts came when a date was set for a status plebiscite which would allow Puerto Ricans to choose among Commonwealth, independence, and statehood in 1967. The PER became bitterly divided over whether or not to participate in the plebiscite. "I felt that we had to depress it [Commonwealth] at the plebiscite," Ferré explains, "because if we were not present . . . then that would be very bad for [the] statehood [effort]." But the old guard of the PER, led by the unpopular García Méndez, disagreed, believing that the predicted win for Commonwealth would only lend it credibility and permanence. Ferré believed correctly that any degree of opposition to the Commonwealth was better than none, as well as necessary to the vitality of the statehood effort. The confrontation came to a head in January, 1967, at a special assembly of the PER. The debate turned into a name-calling session, at which point Ferré and his followers walked out of the meeting, effectively terminating their relationship with the PER.
This sector of the PER organized itself as the Estadistas Unidas (United Statehooders) to summon support for statehood in the upcoming plebiscite. The members of this group were mostly under 35 and were educated and relatively well-off. They were, like most mainlanders, anti-Communist and anti-Cuba. Other pro-statehood civic groups emerged during the 1960s, such as the island-wide Bloc of Statehood Women.
The plebiscite, held on July 23, 1967, determined, as expected, a majority (60%) support for the continuation of the status quo, or Commonwealth. Surprisingly, however, 39% of the voters chose statehood as their ultimate status preference. Realizing that a large group of pro-statehood sentiment existed, Ferré moved to mobilize this electorate for the upcoming elections, even though prior to the plebiscite he had promised not to form a new party, because it was an opportunity which could not be missed. "The plebiscite was the breaking point," Ferré says. "We thought we had to take advantage of the impact" established by the high degree of support for statehood. Thus, in January, 1968, a new political party, the Partido Nuevo Progresista, was officially registered with Ferré as its seasoned candidate for governor in the upcoming elections.
To the surprise of literally everyone, the PNP won the 1968 elections. The New York Times described the contest as the island's "bitterest" and "most closely contested election in almost 30 years." The door was opened to a PNP victory when the PPD split over the gubernatorial nomination. The incumbent, Sánchez Vilella, had lost public support in 1967 due to his quick divorce and remarriage. Muñoz asked him not to run again, naming Luis Negrón López as the party's candidate for 1968. Sánchez refused to accept Muñoz's request without a fight, and ended up running under his own party label. The result was victory for Ferré with 390,964 votes; Negrón received 367,355 votes while Sánchez received 81,800. The PER was wiped out in this election, receiving only 4,324 votes.
The PNP had centered its campaign not around statehood, but on the elimination of drug abuse, poverty and unemployment which plagued the island, using the slogan "This must change." However, everyone knew about Ferré's strong statehood sympathies and could surmise that, if elected, he would strive to move the island towards that status. But Ferré had to move cautiously, since an ample majority had shown their approval of Commonwealth in the 1967 plebiscite. As he told reporters in 1969, "To my mind, two-thirds of the voters would have to be for statehood before Congress would act."
While in office, Ferré continued to push for statehood, believing its economic advantages far outweighed the disadvantages. Ferré advocated a ten year period for the transition to paying federal taxes, outlining a plan of gradual, 10% increments in the application of taxes each year. Federal programs, like Medicaid, he argued, would be extended to the island under statehood which would help Puerto Rico's economic well-being. As for investment of mainland companies in Puerto Rico, Ferré was confident that the investment would continue "because we have one natural resource we are going to develop fully -- climate." Further, with the growth of commercial airlines, Ferré felt optimistic about the future of Puerto Rico's tourist industry: "Income from tourism was around 250 million dollars last year. We figure it can go up to a billion, maybe two billion." Ferré was not all optimism, however, as he conceded that Puerto Rico suffered many problems, such as unemployment and agricultural inefficiency. He attributed the island's 13% unemployment rate to a lack of vocational training programs, and stated that agriculture was allowed to "go to pieces" while the goverment concentrated on building industry on the island in the 1940s and '50s, so that Puerto Rico could not even meet its sugar production quota by 1968.
Ferré called for broad social reforms and technological progress. He instituted a program of Christmas bonuses (at 2% of the company's profits per employee), which is still in effect, for farm workers and government employees. He nearly doubled agricultural workers' wages, helping per capita income rise from $1,169 in 1969 to $1,713 in 1972. Other proposed measures of income redistribution to low-income workers were blocked by the PPD, which controlled the Puerto Rican Senate, but not the House. Above all, Ferré believes his greatest contribution to Puerto Rican society was the creation of a two-party system in 1968.
Technology became a centerpiece of Ferré's aspirations. A bit ahead of his time, he used computers to gauge popular sentiment, giving him access to everything from average personal savings rates to the amount of beer which was consumed on the island. During his tenure, he held a conference of 70 of the most influential community leaders in Puerto Rico to discuss the implementation and financing of a proposed North-South Center for Technical and Cultural Exchange. Ferré desired to make Puerto Rico the meeting point for technology between North and South America. Thus, he added a high-tech image to the long-standing promotion of Puerto Rico as a place for the convergence of North and South.
Ferré's critics point out that he spent too much time and effort discrediting his political rivals, the populares, although he enjoyed the economic conditions which they had, for the most part, established. They also state that he ignored the independentistas. In general, they claim that he mistook the 1968 election results more as a sign of support for statehood and his programs than as a result of the splits in the PPD.
The 1968 elections were a watershed in Puerto Rican politics, especially for the statehood effort. The Muñoz monopoly had been ended, and the younger, pro-statehood group had asserted itself over the old guard Republicanos. However, they had by no means attained a solid base of support for themselves, and Puerto Rico would be governed by an alternating succession of PNP and PPD administrations henceforth.


Cited in Steiner, p, 154.

NYT, May 30, 1960, 8: 3.

As reported in ibid., June 26, 1960, 55: 4. Federal taxes were calculated at roughly 14%, compared to 22% for the six richest states and 19% for the six poorest states.

See ibid., November 10, 1960, 22: 3.

The letter, as published in ibid., July 26, 1962, pp. 1, 8, is cited in STACOM, Background Studies, p. 130.

According to McWilliams, p. 124.

Cited in NYT, November 20, 1968, 59: 6

See STACOM, The Status of Puerto Rico, pp. 6-8.

According to Ferré, in interview, December 7, 1987.

Carr, pp. 149, 142.

Ibid., p. 143. Carr cites Ferré's response to this estimate: 'If statehood costs $188 million it must be wonderful.'

See ibid., pp. 267-68, for example.

Interview with Ferré, December 7, 1987.

Ibid.

Under 1% chose independence. Voter abstention was high at 33.73%. Ribes Tovar, p. 563.

A. W. Maldonado's article, "How did Ferré get away with it?", The STAR, February 18, 1988, p. 28, discusses a Puerto Rican newspaper article from February 1, 1967, which quoted Ferré as saying that the Estadistas Unidas would not become a political party after the status plebiscite. Maldonado maintains that Ferré was able to break his promise a week after the plebiscite was held by convincing everyone that the plebiscite results represented a "victory" for the statehood movement which demanded the organization of a new party.

Ibid.

NYT, November 4, 1968, 30: 3.

These are the unofficial totals published in ibid., November 7, 1968, 9: 1.

Drug abuse in Puerto Rico at this time was already 15 times higher than in New York City. See Lidin, Harold J. "Political Triangle in Puerto Rico," Commonweal , 89 (December 20, 1968): 394-95.

Cited in "Puerto Rico -- Will It Be the 51st State?" U. S. News and World Report, 66 (March 17, 1969): 104. However, Ferré claims today that just a simple majority -- 51% -- is needed.

Ibid., 105.

Ibid. Ferré's projections were overly optimistic: tourism accounted for just $800 million of Puerto Rico's income in 1986, its highest level in more than a decade, according to Governor Rafael Hernández Colón's State of the Commonwealth Message, February 9, 1987, as it appeared in the STAR, February 19, 1987.

Ibid. For example, Puerto Rico's sugar quota was 1.3 million tons, but the island was only able to produce 600,000 tons.

Ibid. Ferré is also one of the island's greatest philanthropists, making contributions to the fine arts and other sectors of society, as well.

See Sariola, pp. 150-51, for example.