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so much for cultivating the cane that it would be cheaper to buy sugar from some other country than to make it here.

The Chairman. That relates to one interest only.

Mr. Spalding. And that is the only interest that I know of in that country.

Senator Gray. There is no other wealth-producing industry in that country?

Mr. Spalding. That is the only thing that produces money there, because it is the only thing that goes out of the country. We can not have manufactures there.

The Chairman. Your opinion would be that with Kaiulani on the throne her government would not be a success if not backed up by some other country?

Mr. Spalding. I do not think she would be of any use to the country at large. We have got to do one of two things—run the government by ourselves and support it by necessary taxation and stand the expenses of it, or have it under some foreign protection that would relieve us of those expenses.

The Chairman. Do you believe that the people representing the ruling, controlling interests in that country (which are intelligence and wealth) are the people to govern the country under a permanent form of government (whichever you may select, republican or monarchical) so as to make it a success and contribute to the happiness of the whole people?

Mr. Spalding. They are doing it now. The native people are better off now than they have been at any other time.

The Chairman. Do you believe that a Government on the existing basis, under the control of those who are now in authority, with the influence that they exert, can be established into a permanent form of government with such benefits to the people as to make it the best that can be done for that country?

Mr. Spalding. I would not like to say that I do believe that, because it depends upon whether we can support the present Government. I say I do not know about that. We are doing it for the present, but whether we can do it with sugar a half cent a pound lower than now is quite another question. And it depends upon how much money we have to pay out for our Government. But, if we have a powerful Government to back us, we get rid of a very large proportion of the expenses of the present form of government, and the expenses of the last Government, the monarchical Government. If the American flag were flying over the islands and one of the smallest and poorest warships with a crew of fifty men on board were stationed in Honolulu Harbor, you might give the suffrage to every man in the country, Chinese and Japanese, and there would not be any attempt to overthrow the Government. They might have their disputes in little affairs; but they could not overthrow the Government. But we do not know how safe we would be if we were to do away with the troops that we have. If that were done somebody else might want to have the official part of the Government to administer.

Senator Gray. Do you think that a democratic-republican government, as we understand it here in the States, could be maintained in those islands with an independent sovereignty, without the outside support of which you speak?

Mr. Spalding. We can maintain a government there so long as we can afford to keep an armed force; but not without.

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Senator Gray. Could you maintain a state government there as we understand a State government here?

Mr. Spalding. Do you mean if the islands were annexed to the United States?

Senator Gray. Yes.

Mr. Spalding. Yes, we could. That would be a republican form of government.

Mr. Gray. That is what I meant.

Mr. Spalding. I have already said that a republican form of government would not be suitable for that people. That is an independent form of government. You might, for instance, if the Hawaiian Islands were a part of the State of California do very well. I think they would send two or three or four representatives to the State capitol, who would be equally respectable with the representatives sent from the present counties in California, and I do not think there would be any trouble----all the struggle would cease. But we have there now these adventurers, an element that wants to rule or ruin. They have nothing to lose and everything to gain; and it would be simply men who have something to lose fighting men who have nothing to lose.

Senator Frye. That would require the maintenance in arms of a thousand men?

Mr. Spalding. Whatever would be necessary—a few hundred or a thousand.

Senator Frye. But the expense of keeping them is the question?

Mr. Spalding. That is all. And the question would be, where shall we get our taxes. If we had a sufficient revenue from the manufacture of sugar to pay these taxes, that might answer; we might say, "Yes, we can afford to pay for these troops to preserve good government." But if the price of sugar is to be so low, and the expenses of running the plantations so high, what would become of the country?

Senator Frye. Do you not think three hundred men under a good officer would exert complete control over those islands?

Mr. Spalding. Oh, very likely. We have not a very large force there now, and times have been probably as bad as they can be. What we want is to make something out of the country; make expenses out of the country. It is not a commercial, agricultural, manufacturing, or mineral producing country; it has no resources, no available resources; never has had. All this prosperity has come from this reciprocity treaty with the United States. Before that time we were making a matter of 15,000 or 20,000 tons of sugar a year.

Senator Gray. Are you a large sugar producer there?

Mr. Spalding. The largest personal producer. There are others, companies, producing more.

Senator Gray. Has Mr. Spreckels a factory there?

Mr. Spalding. He is interested with his friends. He has a mercantile agency and several plantations; but, of course, we send all our sugar to San Francisco.

Senator Frye. Have you ever thought over the question of annexation to California?

Mr. Spalding. Yes, a good deal.

Senator Frye. How would that do?

Mr. Spalding. I do not see any objection to it.

Senator Frye. You would elect your members of the house and senate, and perhaps one member of Congress?

Mr. Spalding. All these things would follow the change. To carry