Book Reviews

philosophies, and even into insan ity, as in the case of Cuba. But they can put on grand shows while the impulse lasts. The Bahama Islands, off the southeastern coast of Florida, have recently been putting on a particularly dazzling display of the de velopment that can result when the freedom principles are followed. Snatches of the story are told in a remarkable publication called Ba hamas Handbook: 1966-1967 (Nas sau, Bahamas, Etienne Dupuch Jr. Publications, $4.95), which is a blend of ancient island history and fascinating modern journalism. You won't find much here about the shady side of Bahaman develop ment, such as the alleged U.S. mob ster penetration of casino gambling in Freeport, a completely new city on the island of Grand Bahama just a few miles across the water from Palm Beach. But this story has been twisted out of proportion in lurid magazine accounts, so the handbook's failure to go into it re dresses the balance. The point is that when people can work with 100-cent, tax-free dollars instead of 50-cent-net-after-tax dollars, the good things greatly outnumber the bad. There is no income tax in the Bahamas, and no capital gains tax, 317 318 THE FREEMAN May and foreign investors can still get breaks there even though their home internal revenue services in the U.S. and elsewhere are exhibit ing more and more ingenuity in pursuing the fleeing enterpriser.

What impresses the reader of the Bahamas Handbook is the sheer joy of creation that is released when energy is uninhibited by the tax collector. Tycoons have been doing things in the Bahamas that they might very well have pre ferred to do in Florida, or Texas, or New Mexico, if the investment climate on the American mainland were all that it once was. Just tick ing off the Bahama development stories should prove that capital ism, even as Don Marquis' cat, Mehitabel, has a dance in the old dame yet. A City of Enterprise The big story in the book re volves around the island of Grand Bahama and the building, by Wal lace Groves of Virginia, of the new city of Freeport-Lucaya. Mr. Groves may have been shortsighted when he let professional managers in to run his gambling casinos, for some shady characters who had worked the tables in pre-Castro Havana turned up as members of the crews. But if Groves has made mistakes, they can be corrected by the commission that is looking into the gambling situation, presumably with an eye to throwing any Mafia-connected gentry out. Mean while the solid achievements of Mr.

Groves will stand any amount of inspection. An acerb critic said that the Groves group had "only" to prom ise a deep harbor and some solid industries in order to get 50,000 acres of Crown Lands at $2.80 an acre. The use of the word "only" is a tip-off to what Ludwig von Mises has called the "anticapitalistic mentality." Nobody thought Grand Bahama Island was worth any thing until Wallace Groves began inspecting its pine scrub wastes for lumber possibilities. He saw a lot more than lumber in the island, but to get land cheap he had to come up with a plan that included more than golf and casinos for prospective tourists. After signing the so-called Hawksbill Creek agreement with the Bahama government in 1955, the Groves group spent five years on surveying, site planning, ,har bor dredging and construction, building roads, and so forth. It started a bunkering service for ships which, by 1961, had become the largest single installation of its kind in the Western Hemis:: phere. By 1965 more than 1,700 ships a year were taking on nearly 10 million barrels of fuel at the Freeport Bunkering Terminal.

The refueling facilities at Free1967 PARADISE REGAINED 319 port vastly extend the reaches of world shipping. Freeport's harbor is expected to become the "Euro poort" of the hemisphere-a trans shipment point for major bulk shipments to the Carrihean area, ",,~here 100 million people live. Enter, Industry To carry out the promise of diversified industry for what had been a lazy tropical island, U.S. Steel was lured into creating for Freeport a mammoth cement com pany (4.8 million barrels a year) . The cement company uses sand from the sea bottom, so its dredg ing operations are incidentally re sponsible for Freeport's harbor. Hard on the arrival of U.S. Steel's cement subsidiary, the Syntex Corporation chose Freeport for one of its big pharmaceutical plants. All this was to provide an offset to the Freeport tourist in dustry -(300,000 a year by 1966). The profits made by Groves and the other developers of Grand Bahama Island were certainly legitimate rewards for good plan ning and hard work. The evils connected with casino gambling should pass once the investigation commission has finished its labors, but the community of Freeport Lucaya will remain.

J. Louis Reynolds, the alumi num executive, is another Amer ican who has been lured by those lOO-cent investment dollars to the Bahamas. On the island of An dros, the biggest in the Bahamas, the U.S. government has built its $130 million Atlantic Undersea Testing and Evaluation Center, or AUTEC, close to the 6,000-feet deep arm of the Atlantic known as the Tongue of the Ocean. Andros is where the sonar detection work that is necessary to repel Soviet submarines is being pushed. Rey nolds owns a 4,000-acre island farm next door to AUTEC, where he specializes in cucumbers, one of the top three Bahama exports, for the Florida market. But what Reynolds is really interested in is farming the sea. He predicts great undersea farms of lobster, shrimp, crabs, turtles, and conch, and he hopes to be the first person to grow a great spiney lobster in captivity. Reynolds says he will make Andros "a model of free enterprise."

$20 Million and Paradise Two young men, James Crosby and J ack Davis, happened to be making a good thing out of' their Mary Carter Paint Company of Tampa, Florida. But expanding the paint business on the U.S. mainland is a high-tax business. Crosby and Davis decided to put $20 million into Paradise Island, just opposite the Bahaman capi tal of Nassau. They will sell ex320 THE FREEMAN May clusivity to the few (as Hunting ton Hartford, who sold them the Paradise tract, once planned). But they will also sell swimming in the cleanest water in the world to the thousands of tourists who pour oJf the cruise ships. The Paradise development, naturally, will leap frog ahead on those 100-cent dol lars. The Future? Will the Bahama venture in free enterprise eventually go "the way of all flesh," with capital gains taxes and high income taxes creep ing in to bring it to a halt as ven turesome men like J. Louis Reyn olds, James Crosby, and Jack Davis turn elsewhere? Just recently the islands' first "labor" (and Negro dominated) government took over.

Fortunately, Lynden Pindling, the first Bahaman Negro prime minis ter, sees the connection between what Groves, Reynolds, Crosby, and Davis are doing and full em ployment for the 138,000 native Bahamans. The native population of 138,000, which is almost ex actly equal to the population of New Haven, Connecticut, caters to 900,000 tourists a year where New Haven has only a few thou sand Yale students coming in from outside. With 900,000 spenders descending upon you, there are other sources of government rev enue which make income and capi tal gains taxes unnecessary. Since Lynden Pindling took the port folio of "Tourism and Develop ment" in his own cabinet, the chances are that he sees this. The golden goose is not yet ticketed for the abattoir. ~ A Better Approach IF INDIVIDUALS say that they want high-bracket income taxes re duced because it is unfair to have to pay such high rates - the common argument - nobody is convinced because so many lower income people think that those who pay 70 per cent are lucky to have the income to pay it on. But if, on the other hand, we declare our objective to be a new and greater prosperity and a higher standard of living for everyone, and then show by examples how certain tax rates - not exclusively income - hamper industrial development, reduce the incentives for expansion, and keep people who need them out of jobs, we make an argument that is at least acceptable to intelligent people.

HAROLD BRA YMAN, Corporate Management in a World of Politics THE FREEMAN yI Compulsory sharing of wealth for the benefit of consumers has the sorry effect of diminishing the capital and tools that provide employment opportunities p. 323 yI Dr. George Roche here reviews the history of the uses and abuses of po litical power, and in subsequent ar· ticles will examine some modern man ifestations and their effects and look to the prospects for curbing these excesses p. 326 JII" A low level of mediocrity is the best "'~that can be expected, suggests Dr. Howard Kershner, from penalizing the successful , p. 340 yI Henry Hazlitt points out that the imitators of capitalism are unlikely to secure its blessings until they under stand and respect the property rights of owners p. 342 JII" And that's just about what Leonard Read is saying we'll have to do if we ever hope to deliver mail in a business·like way p. 350 ", Even our moral affairs, if we would heed the teachings of Erasmus of Rot terdam, depend for improvement upon the responsible behavior of individuals ............ p.356 VI' Professor D. T. Armentano offers a timely warning against the latest re formist efforts at price control ............ p.366 JII" Those who fail to understand why the same company shouldn't be al lowed to sell both soap and Clorox will want to share Harold Fleming's latest look at antitrust policies p. 369 Y" But not Patricia Carney! She's sim ply grateful to the businessmen who "exploit" her out of the kitchen drudgery of the past p. 378 yI John Chamberlain checks his recol lections of The First New Deal against those recorded by Raymond Moley ............ p.379 ~ Professor Alexander Evanoff finds valuable ore and numerous nuggets as he digs Deeper Than You Think with Leonard Read p. 383 Anyone wishing to communicate with authors may send first-class mail in care of THE FREEMAN for forwarding.