| After the Second World War, a number of countries implemented industrialization programs based on import substitution, some of these with great success. One of the key elements in this success was the influence the Development Banks played in the economic development. This dissertation examines the Development Bank of Puerto Rico, and the role it played in the industrialization of the Island. It carefully analyzes the Minutes of the Board of Directors and the 450 loans approved by the Bank, information not available to researchers for more than 60 years.; Rexford G. Tugwell, a New Dealer with ties to the Roosevelt Administration, was appointed governor of Puerto Rico in September of 1941. The combination of this appointment, the electoral victory of the populist Popular Democratic Party, and the horrific poverty of the Island, lead these newly appointed leaders to conclude that industrialization was to only way to rid Puerto Rico of most of its social and economic problems. The newly chartered Development Bank of Puerto Rico---one of the institutions that was though to be instrumental in achieving these goals---was organized in order to finance the industrialization effort.; The Development Bank was funded with limited capital, but additional deposits insured that capital would not be a hindrance for this institution to achieve its goal. However, the lack of prior manufacturing experience on the Island and qualified engineers and administrators, limited experience on exporting products to the United Estates marketplace, and lack of coordination among the political leaders of the time, severely limited the success of this institution.; The Development Bank coordinated and sold {dollar}75,000,000 in bonds of the Puerto Rico Water Resources Authority, the proceeds of which where used to improve the electrical capacity of the Island, as the industrialization required more electricity than was available. In this venture, the Development Bank was highly successful. The lending policies of the Bank, however, where more conservative than those adopted by the commercial banks operating on the Island. This, in addition to the fact that the Banks President, Rafael Buscaglia, though the Island Industrialist to be non-existent, severely limited the Banks loans to the industrial sector. |
