Restless Virgins

The Virgin Islands used to be the place to forget about the factory. The sand is white, the weather right, the pleasures plentiful--and a Pan Am tourist book even advises women visi tors to leave their girdles at home. Now industry is coming to the Virgins, and the results so far are unsettling to many of the islands' 36,000 year-round residents.

In the vanguard are 57 small manufacturing companies drawn to the Virgins since 1957 by a favorable tariff concession: merchandise moves into the U.S. duty-free if 50% of the cost of processing it was spent in the islands. Seven watch companies--including subsidiaries of Hamilton and Benrus--assemble movements from Japanese, French, Moroccan and even Russian parts that are imported at the Virgins' low 6% tariff rate. Other companies process shoelaces, textiles, pens and medical thermometers. Old-line sugar planters complain that they can no longer get cane cutters at 600 an hour while the new factories pay $1.15, and housewives cry that the monthly cost of maid service has inflated from $30 to $60.

Freeze in the Tropics. Governor Ralph Paiewonsky, however, is after bigger business. He offers a ten-year corporate tax forgiveness and other come-ons that have blown up a storm of protest. Many islanders objected when Paiewonsky agreed to pay $3,000,000 to Harvey Aluminum for dredging a ship channel near a $25 million alumina plant that it is building on the island of St. Croix. To critics Paiewonsky snaps: "We don't want suitcase industry that comes in and takes tax concessions for ten years and then runs out. Heavy industry is what we need."

In the biggest fight of all, Paiewonsky is trying to shift the islands' agriculture out of sugar cane--which is raised on 155 mostly small, uneconomical estates --and into citrus and other higher cash crops. Over protests of the sugar growers, Paiewonsky is urging the federally run Virgin Islands Corp. to close the islands' one creaky sugar mill. "Vicorp" itself is negotiating a long-term lease of 1,700 acres of government-owned and money-losing sugar fields to Big Industrialist Daniel K. Ludwig (TIME, Aug. 2). Ludwig intends to raise citrus for frozen juice then blend one part Virgin Islands juice with nine parts of juice from his plantations in Panama; the higher cost of juice from the islands, plus the cost of canning it, would add up to 50% of the total and enable the mixed juice to move to the U.S. duty-free.

Live on Liquor. Now that industry is arriving, the islands seem less paradisaical. But then, there has always been a little trouble in paradise. Because almost everything has to be imported from the U.S. mainland, living costs are expensive--except for goodies that are brought in to the islands' free port to woo the tourists. Says one newly arrived businessman: "Only the luxuries are cheap. If you could live on liquor, cigarettes and perfume, you'd have it made in the Virgins."

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