2 + REPORT OF THE GOVERNOR OF THE VIRGIN ISLANDS

funds for urban planning assistance and for a community renewal
program. The enactment of a zoning and subdivision law-for the
first time in these islands-made the islands eligible for such Federal
aid. As a result of representations made by the Governor, a U.S.
Housing and Home Finance Agency Office was established in the
islands with an Assistant Regional Administrator for Virgin Islands
Operations. There has been an encouraging response from the bank-
ing institutions of the islands to appeals to make more credit facilities
available for housing programs.
 The shortage of fresh water has always been a serious problem and
a handicap to the development of industry and tourism. Water is also
a vital need for the health, comfort, and well-being of the people who
live and work in the islands.
 A new salt water distillation plant, built by the Virgin Islands Cor-
poration on the island of St. Thomas, was completed and provides
over 275,000 gallons of fresh water a day. The use of fresh water in
St. Thomas increased substantially, about double the capacity of the
distillation plant, making it necessary to continue the round-the-clock
haul from Puerto Rico. Plans for a larger distillation plant are under
active consideration.
 In St. Croix the exploration for underground water met with suc-
cess. Thirty-nine wells were drilled, of which 30 were successful. Six
of these wells will provide 300,000 gallons per day of additional water
supply for the residents of Christiansted, while other wells in the
western end of the island will provide the additional water require-
ments for the people in the Frederiksted area. Under an arrange-
ment with the United States Geological Survey Division of the De-
partment of the Interior a further program for continued exploration
and evaluation of the underground water potential is being pursued
in all three islands. A geologist has now been stationed in the islands
on a permanent basis to supervise and carry out this program.
 During the fiscal year the problem of the supply of electrical power,
which is generated and distributed by the Virgin Islands Corpora-
tion, continued to be urgent and critical in the Virgin Islands as a
whole, but particularly on the island of St. Thomas. The major
problem faced by the corporation's power division is its difficulty
in obtaining sufficient financing of a capital nature to keep pace with
the extremely rapid growth of the islands and with the concomitant
high rate of increase in power consumption.
 The breakdown during the year of the then largest piece of generat-
 ing equipment in the St. Thomas power station (a 2,500 kilowatt diesel
 engine) caused serious outages throughout the island of St. Thomas.
 The situation was fortunately relieved by the installation during
 the year of a 3,000 kilowatt steam generating plant which did much