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Puerto Ricans became U.S. citizens 100 years ago

March 2, 2017 - PUERTO RICO

The Jones-Shafroth Act signed by United States President Woodrow Wilson a century ago made Puerto Rico a United States territory and Puerto Ricans U.S. citizens. A century on, economic disaster makes the island an attractive place to leave, and Puerto Ricans can argue that the Act laid the foundation for the crisis.

The continuing exodus to the U.S. mainland of recent years has left the government with a shrinking tax base, compounding its economic woes.

The Act shaped democratic government on the island, but also affected shipping and prices in ways that laid a foundation for the debt crisis. According to the Huffington Post, tax provisions in the Act - with others introduced decades later - made the territory attractive to unscrupulous lenders and the type of hedge funds called vulture funds. The publication's report on the debt crisis adds corruption and inefficiency as contributions to the territory's present sorry state. The apparent disinclination of the U.S. Congress to provide funding relief compounds the impact of relentless austerity as the island attempts to meet its obligations.

The Commonwealth is U.S.$70 billion in debt to external lenders. A federal oversight board is working on a plan to restructure at least some of that debt, but the price is likely to be additional budget cuts and higher taxes.

The government sees changing the territory's status from hybrid statehood to full statehood as the answer to its debt troubles: several avenues would be available for debt relief if it becomes the 51st state of the Union. A non-binding vote on statehood vs. independence/free association has been set for June, with a binding vote following in October if a majority chooses the latter. The U.S. Congress has the last word, however, and might find it more convenient to leave the island's status unchanged.

Puerto Ricans granted US Citizenship: March 2, 1917 (Politico 2 May 2012)

The arcane 100-year-old law to blame for Puerto Rico's woes (Fortune 6 Aug 2015)

5 Things You Should Know As Puerto Rico Confronts Its Unpayable Debt (Huff Post 28 Apr 2016)

Puerto Rico Expands Tax Haven Deal For Americans To Its Own Emigrants (Forbes 27 Jan 2015)

Quest for statehood: Puerto Rico's new referendum aims to repair economic disaster (AP/Salon 3 Feb 2017)

Date written/update: 2017-02-14