VI. The World Wars and the Interwar Period, 1914–1945 > E. Latin America and the Caribbean, 1914–1945 > 5. The West Indies > c. The Virgin Islands
  The Encyclopedia of World History.  2001.
c. The Virgin Islands
1916, Aug. 4
AMERICAN-DANISH TREATY, by which Denmark agreed to cede the Danish West Indies (about 100 islands with a total area of 132 square miles) to the United States for $25 million. The treaty was ratified on Jan. 17, 1917, and formal possession was taken on March 31 of the same year. Danish laws were allowed to remain in effect.  1
The population (c. 26,000 in 1917) suffered much from economic distress. The sugar industry of St. Croix had been in a process of concentration and many small sugar mills had been abandoned. Ultimately all grinding was done in three large “centrals.” Many laborers were thereby thrown out of employment. The loss of free port status, which had existed under Danish rule, reduced the trade of the islands, especially of St. Thomas. The American Prohibition law (1919) further destroyed the market for sugar products, though bay rum continued to be manufactured. The main achievement of the U.S. administration was the development of education.  2
1931, Feb
After a succession of governors from the U.S. Navy, the U.S. established a civil government for the islands, making St. Thomas the capital. Paul M. Pearson became the first civil governor.  3
The depression became so pronounced in the islands that President Hoover referred to them as “an effective poorhouse,” with 90 percent of the population dependent upon the bounty of the U.S.  4
The Encyclopedia of World History, Sixth edition. Peter N. Stearns, general editor. Copyright © 2001 by Houghton Mifflin Company. Maps by Mary Reilly, copyright 2001 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved.