The news that the Federal government plans to establish a huge corporation in the Virgin Islands to produce rum must appear as glad tidings to the people of the United States as well as to the inhabitants of the islands. For the natives it promises to end the poverty-stricken condition which has been the lot of almost the entire population since this country acquired the islands from Denmark in 1917, and should bring about an economic rehabilitation which should be the sounder and the more enduring for being based upon a cooperative corporation that will give the inhabitants their share of the profits.

In addition to solving the difficult problem of what to do with the apparently useless islands this latest effort of the administration should open to the United States a large supply of good, cheap rum. This will undoubtedly be a lever with which the government may force the distillers to lower their exorbitant prices, for the rum will be admitted duty-free and should be sold at a moderate price. With a supply of cheap rum available the few large companies now controlling the whiskey traffic should soon be brought to their knees and forced to sell their products at a reasonable price.

There is, of course, the danger--and it is by no means a slight one--that prices of rum will be maintained on about the present level by the retail liquor stores and that they will simply pocket the extra profit. If this happens the Federal government should take steps to insure the sale of the rum at a decent price to the consumer, for the whole project is being financed by the government out of the funds of the Public Works Administration, and in view of this public character of the work it should certainly not be permitted to become merely a means of enriching private interests that have already shown themselves among the most avaricious and unscrupulous on record.