100 years ago today, Denmark transferred control of the Virgin Islands to the US in exchange for $25 million in gold. How was all this experienced by average people living there?
Good topical question. It is important to understand the circumstances under which the transfer happened. Like many Caribbean islands, the local economy of the Danish West Indies (the pre-transfer name for what would come to be known as the United States Virgin Islands) was built almost exclusively around the production of sugar cane. Although this had been a fairly lucrative business in earlier times, this was no longer the case by the end of the end of the 19th century. The price of sugar cane fell dramatically due to competition from cheaper sugar beets produced in Europe and elsewhere. Having no secondary industry to fall back on, the Danish Windies became mired in poverty.
The general poverty, and accompanying social problems - unemployment, poor healthcare and access to education - became a hotly debated topic in Denmark during the latter half of the 19th century. The islands held little to no economic value for Denmark, and the general destitution of the local populace came to be seen by many Danes as a shameful example of the failure to adequately export the social and economic achievements of Denmark proper. At the same time it was generally accepted by the majority of Danish politicians that social prosperity had to be founded on economic prosperity, and despite significant investment through the late 19th and early 20th centuries this was not attained.
One proposed solution to the islands' problems was to unite them with the large US free trade zone. It was hoped by many, both in Denmark and on the Danish Windies themselves, that this would stimulate growth and achieve the desired economic prosperity. Yet the suggestion that sovereignty over the islands be transferred to the United States was a controversial one in Denmark. Giving up the islands was seen by some conservatives as an unacceptable blow to Danish prestige. Others suggested that Denmark should instead attempt to cede the islands to Germany, in return for a portion of the territory lost during the Danish-Prussian war of 1864. It was also argued that as the sale of the islands to the United States would be done to alleviate the economic and social problems on the islands, Denmark should make the utmost efforts to obtain guarantees that the US government would work towards this. Attempts were made by the Danish government in 1902 to gain domestic political backing for the sale of the islands to the United States. These efforts were defeated in the national assembly, partly as a result of the US government’s refusal to grant the Danish Virgin Islanders automatic US citizenship and unfettered access to the US domestic free trade area.
Despite these setbacks, the question of ceding the islands to the United States never went away completely. Social and economic problems on the islands remained a pressing and embarrassing issue to many Danes, and although efforts to improve conditions following the failed 1902 sale improved conditions somewhat, poverty remained endemic. The general destitution among the 25 000 people living on the islands - the majority of whom were descendants of slaves brought there to tend the sugar plantations - also led to increased levels of civil unrest. In 1915, the Danish government felt compelled to send a naval detachment to the islands in order to quell protests which threatened to turn violent. At the same time the local Danish West Indian union leader and activist David Hamilton visited Denmark in order to put pressure on the Danish government to solve the social and economic problems plaguing the islands. Hamilton was a charismatic man, and his efforts appear to have contributed to breaking the political deadlock over the transfer.
The potential transfer of sovereignty remained a delicate and controversial political issue, not least because of the ongoing world war, but it was now a question of when, rather than if, Danish colonial rule would end. In May 1915, the Danish Foreign Secretary approached the US Minister to Denmark, requesting that the United States make an offer to purchase the islands. The Danish government’s eagerness to conclude an agreement with the US had also become motivated by the desire to avoid the sovereignty over the islands creating friction with Germany. The US government desired the islands for much the same reason - avoiding any kind of German influence to gain a foothold in the Americas. A confidential offer to buy the islands was therefore handed to the Danish government in October 1915.
Over the following months the American and Danish governments discussed the practical details of how the transfer should happen. The discussions were kept secret in order to avoid both foreign policy entanglements with other possible interested parties, as well as to avoid stirring up political controversy. When the negotiations were made public in the summer of 1916, the political opposition in Denmark demanded a Danish referendum be held over the proposed sale. The referendum was held in December, and gave the government a solid mandate for the transfer. As war between Germany and the United States appeared to be growing increasingly likely, time had also become a factor. Any transfer would have to be concluded before war between the two broke out, otherwise Denmark might be accused of breaking its neutrality, possibly being dragged into the war. Denmark therefore dropped its demands that the United States grant the Danish Virgin Islanders full political and economic rights. Some Danish conservative politicians argued that by doing so, Denmark was selling out the islanders, but to no avail. The sales agreement between Denmark and the United States was formally ratified by both countries in January 1917. On 31st March, the Danish West Indies ceased to be, and the United States Virgin Islands came into existence. Less than a week later the United States declared war on Germany.
Hamilton had hoped that the Danish government would invest capital and effort in order to solve the economic and social problems of the Danish West Indies. Unlike most of his fellow Windies citizens he was originally sceptical of the proposed transfer to US sovereignty – largely due to the aforementioned US reluctance to grant full economic and political rights to the population of the islands. Yet by the end of 1916 Hamilton had become disillusioned with the prospect of investment and efforts being forthcoming from Denmark. He therefore began agitating in favour of the sale of the islands to the United States, despite the Danish government dropping its demands for political rights for the population. Hamilton also organised a local referendum on the transfer. The validity of this referendum is open to questioning, but it returned a result of 4000 in favour of the transfer to 7 against. The news of the transfer was largely well received on the islands, although the conditions on the islands did not immediately improve. The citizens of the islands were granted US citizenship in the 1930s, but were only allowed to elect their own local government in 1968. The economy of the islands also remained stagnant until the 1930s, when the end of prohibition in the US caused a revival of the sugar industry.
Thus, although the sale of the islands to the United States was at least in part motivated by the desire to find a solution to the woes of the populace, such a solution was not forthcoming in the decade after 1917. Despite the transfer apparently being popular, Virgin Islanders would continue to struggle with the same economic and social issues as they had for half a century for some time to come.