From 1899 to 1941, Guam was under U.S. Naval Administration. At the outbreak of World War II, the Japanese seized Guam and occupied the island for two and a half years. American forces recaptured Guam in July 1944, and the U.S. Naval Administration resumed responsibility when peace returned.
In 1950, the U.S. Government enacted the Guam Organic Act, conferring U.S. citizenship on the people of Guam and establishing local self-government. Under the Organic Act of 1950, the Secretary of the Interior assumed administrative responsibility for Guam, formerly vested in the Secretary of the Navy.
The United States purchased the Virgin Islands for $25 million from Denmark in 1917. The Virgin Islands were placed under the jurisdiction of the Department of the Navy until they were transferred to the Department of the Interior in 1931.
Interior's relationship with other U.S.-affiliated Pacific islands stemmed from a post-World War II trusteeship. The Northern Mariana Islands, the Marshall, Palau, Yap, Kosrae, Chuuk and Pohnpei Islands were grouped into the Trust Territory of the Pacific Islands (TTPI) by the United Nations in 1947. Under the Trusteeship Agreement with the U.N. Security Council, the United States exercised administrative jurisdiction over the TTPI.
The Navy administered the TTPI until 1951, when that authority was given to the Secretary of the Interior. During those initial years of authority, the Secretary of the Interior exercised broad administrative authority in all the insular areas. Chief executives of the insular governments were appointees of the President or the Secretary and the Secretary had the legal authority to supervise and give binding directions to them.
However, this is no longer the case. Popularly elected legislatures (Guam-1950, USVI-1954, American Samoa-1961, and the CNMI-1979) and governors (Guam and USVI 1971, American Samoa 1978, the CNMI, 1979) were established. Each of the U.S. insular areas has become responsible for the administration of local government functions. Although the Congress has placed with the Secretary, certain continuing budget and program coordination authority and responsibility concerning U.S. insular affairs, the local governments are not entities of the Department, nor are they agencies or instrumentalities of the Federal Government.
Except for CNMI, which became a commonwealth of the U.S., the remaining TTPI entities chose a dramatically different political status.
On May l, l979, the United States recognized the Constitution of the Marshall Islands and the establishment of the Government of the Marshall Islands (RMI). The United States recognized the Federated States of Micronesia (FSM) constitution in 1979 and establishment of the Government of the FSM, both national and state levels. FSM created the 4 State levels from the islands of Yap, Chuuk, Pohnpei and Kosrae.
On October 1, 1994, the Compact of Free Association between the United States and Palau entered into force, (U.S. Public Law 99-658). The Compact entered into force for the Marshall Islands on October 2l, l986, (Presidential Proclamation No. 5564). The FSM Compact was fully implemented on November 3, 1986 (Presidential Proclamation No. 5564).
Under the Compact, the status of free association recognizes each Freely Associated State as a sovereign state with the capacity to conduct foreign affairs consistent with the terms of the Compact. The Compact places full responsibility for defense with the United States. The Compact also provides grant funds and Federal program assistance, principally through the Department of the Interior.
Under the Compact, the State Department is responsible for government-to-government relations, while Interior is responsible for the oversight and coordination of U.S. programs and funding assistance.
As a result of the President's National Performance Review, the Department took a major step in 1995 to redefine and restructure its relationship with the U.S. insular areas. In recognition of the political advancement and increased self-government of the insular areas, the Office of Territorial and International Affairs and the positions of Assistant Secretary and Deputy Assistant Secretary were abolished.
The current Office of Insular Affairs was created on August 4, 1995, by Secretary's Order No. 3191, and the Secretary's responsibilities for insular affairs were delegated to that office. As of mid-2002, the Office of Insular Affairs is headed by a Deputy Assistant Secretary who reports to the Deputy Assistant Secretary for Policy under the Assistant Secretary for Policy, Management and Budget.
The reduction in staff from 45 to 25, resulted in a cost savings of $l.2 million annually. Two of the five field offices were closed. Coordination of international activities was transferred to the Department's Office of Policy Analysis and certain budget activities were transferred to the Office of Budget.
Currently, the Department of the Interior has administrative responsibility for coordinating federal policy in the territories of American Samoa, Guam, the U.S. Virgin Islands, and the Commonwealth of the Northern Mariana Islands, and oversight of federal programs and funds in the freely associated states of the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau.