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Washington, D. C., Monday, February 5,1894.

Subcommittee met pursuant to notice.

Present the chairman (Senator Morgan), Senators Gray, Sherman, and Frye,

Absent, Senator Butler.

SWORN STATEMENT OF WILLIAM E. SIMPSON.

The Chairman. When did you first visit the Hawaiian Islands?

Mr. Simpson. I went to Honolulu on the first ship which left San Francisco after the Presidential election, and was on the ship that carried the news that Mr. Cleveland had been elected. This was in 1892, and I must say that I never witnessed such a public demonstration as there was when the knowledge was given out that Mr. Cleveland was elected. The wish had been so general that he should be elected that of record there was not more than half a dozen wagers that the election would be otherwise. I never saw a community so bound up in the information which they hoped to receive, that Mr. Cleveland would be elected.

The Chairman. Was that common to all classes, natives as well as the white people?

Mr. Simpson. Natives, Germans, English, and Americans. They told me afterward that the oldest inhabitants never knew when the wharves had been so well filled with people as they were upon the arrival of that ship, expecting Mr. Cleveland's election. That impressed me as being a very clear idea of what they wanted down there.

The Chairman. Was there any satisfactory reason stated that was commonly accepted by this mass of people for their rejoicings at Mr. Cleveland's election?

Mr. Simpson. Yes; and it was acquiesced in by all classes. The people at that time believed that the action of the McKinley bill in placing sugar from all countries on the free list and placing a bounty of 2 cents a pound on American-grown sugar was an injustice to the sugar-raisers who are so much Americans that it practically meant all of them, and those who were not Americans secured their profits from the business by their proximity to the American market. They believed it was an injustice, for the reason that, in 1876, when the reciprocity treaty was concluded and put into effect between the United States and the Sandwich Islands, it had been done with the direct purpose of augmenting the sugar interests of the Americans living in the islands, and the best reasons that I could get for the same favor not being shown them when the McKinley bill was put into effect was that the matter had been overlooked by the framers of the bill.

The Chairman. What was the purpose of your visit to Hawaii?

Mr. Simpson. In July, 1892, having previously been in the commission business in Tacoma, it was brought to my attention that the bananas raised in the Hawaiian market would find a much better market in the Northwest if they were brought direct; that in handling the trade the principal profits were made by the San Francisco jobbers and consumed by the extra freights to such an extent that they had been getting their bananas to the Northwest from New Orleans by rail by the way of San Francisco. In looking up the matter, and having been commissioned by some of the business houses there to go to Honolulu and secure a cargo of bananas, I became interested in the subject. I looked the

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matter up carefully, and from the investigation I had given it I came to the conclusion that there was a splendid market for the merchants and farmers in the Hawaiian Islands. I found that nearly all the bananas that were raised were shipped to San Francisco and reshipped by the San Francisco trader with the Hawaiian Islands. So I collected considerable data, compiled it----

The Chairman. Were your observations confined to the banana trade?

Mr. Simpson. No; confined to all lines of trade. I immediately organized a company for the purpose of running a steamship from Tacoma, in the State of Washington, to Honolulu. When the organization of the company was completed the board of directors requested me to go to Honolulu to see what arrangements could be made for the steamship we hoped to place on the line. Prior to going to Honolulu I made a tour of the principal cities of the Northwest and received orders for 5,000 bunches of bananas per month.

The Chairman. You mean the American cities?

Mr. Simpson. The American cities in the Pacific northwest. That insured us a profitable cargo coming back. I based my calculations on the successful operations of the company with freight transportations, paying no attention to the passenger part of it, because that was not staple; you could not depend upon its being a regular thing. I collected data from the various manufacturers and farmers in the Pacific northwest, and went supplied with samples of all kinds and descriptions ready to do business with Honolulu. When I got there I immediately made myself known through letters of introduction from the chambers of commerce in Tacoma and Seattle and from the governor of the State and various others. A meeting of the chamber of commerce was arranged, and I appeared before those gentlemen and laid the matter before them. They thought quite favorably of it. The great trouble I had to work against the first week was their lack of knowledge of the Pacific northwest, but they became satisfied that they were buying goods in a market that had originated in our country. They entered with considerably spirit into the scheme. I established an agency with the house of C. Brewer & Co., the oldest house doing business in the islands. They were very enthusiastic over the matter.

The Chairman. I do not care about the present details of your business transaction. Did you find the commercial community of Honolulu aroused to an interest in your enterprise?

Mr. Simpson. Yes; and that interest was manifested in the orders that they gave me. They gave me an order for 1,250 tons of merchandise, consisting of oats, wheat, and barley.

The Chairman. Did you start your line in operation?

Mr. Simpson. No, sir.

The Chairman. What prevented it?

Mr. Simpson. The revolution prevented it.

The Chairman. To what revolution do you refer?

Mr. Simpson. The revolution of January 14 to 17, in Honolulu. I left the islands on the steamer prior to the revolution. At that time there was no intimation that any such thing would take place. For months the Legislature had been in session. I had become well acquainted with the leaders on both sides of the question, for the reason that I had made application to the Legislature for a subsidy.

The Chairman. Did you succeed in getting it?

Mr. Simpson. Yes. The subsidy consisting of $500 per trip, mail contract, remission of all port charges, light-house fees, free wharfage,

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free storage, and remission of all dues upon any goods which were transported to Honolulu for the use of our company. Just prior to the time I made my application Mr. Spreckles was engaged in the same thing. His subsidy was about to run out, and I was told that it cost him considerable money to get his subsidy through. I waited until he got his subsidy through, and I worked mine through on the proposition that what is good for the goose is good for the gander. So soon as the natives learned that I had no money-I was approached by some of them----

The Chairman. You speak of native members of the Legislature?

Mr. Simpson. Some of the native members.

The Chairman. Did you concede anything to them on that score? use any money?

Mr. Simpson. Not the slightest. All the money that was spent was on a prospectus in the American language and the Kanaka language.

The Chairman. Which cabinet signed your concession?

Mr. Simpson. It was known as the Wilcox-Jones cabinet. It consisted of Wilcox, P. C. Jones, and the minister of foreign affairs, a native, but in sympathy with the American movement. The Legislature granted my subsidy with not more than 3 votes against it, whereas Mr. Spreckels's subsidy carried quite a number of votes against it, from the fact that he did not see them all in the proper spirit. Before I went to the Hawaiian Islands the impression I had always had was that Mr. Spreckles controlled things down there. After I had been there a while I found that to be untrue. There were six business houses there, and they practically do all the business in the islands, with the exception of what local retail trade there is done outside of Honolulu. These six houses are either owners, part owners, managers, or agents for all of the sugar plantations and some of the other plantations in the islands. They practically control the entire business of the islands.

The Chairman. In that industry?

Mr. Simpson. Commercially.

The Chairman. You speak that broadly.

Mr. Simpson. I speak that quite broadly. They buy in the round lot for their own sailing vessels. They buy and sell the sugar and rice, and they supply the plantations with whatever they need and operate them, acting for resident and nonresident owners. I do not know that I can better explain my ideas of the situation politically as it stood than by giving you a small extract of an interview which was published in the Portland (Oregon) Telegram, January 15, 1893.

The Chairman. That was while the revolution was going on?

Mr. Simpson. While it was going on and before I returned to the islands, and prior to any information being received in this country.

"POLITICAL MATTERS.
"The Legislature of the Hawaiian Kingdom is composed of representatives and nobles, elected by the people, the representatives being in the same relative standing as our Representatives and the nobles taking the place of our Senators. They all sit together as a body of the whole, and it is a very interesting proceeding to see and hear them transact business, as all speeches delivered by natives and in the native language are immediately interpreted and repeated in English, and everything said by members who speak the English language is likewise interpreted into the native speech. The cabinet of the country
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is appointed by the Queen, under the advisement of the leader of the party voting a 'lack of confidence' in the previous cabinet.
"ANNEXATION QUESTION.
"A great deal is heard there in reference to annexation to the United States. This agitation doubtless originates from the fact that prior to the passage of the McKinley bill Hawaiian sugar entered the ports of the United States free, while sugars from all other countries paid a duty. The McKinley bill placed the Hawaiian product on an equal basis with that of all other countries, and the American Government pays 2 cents per pound on its homegrown sugar. This the plantation owners of the Hawaiian Islands believe to be an injustice, and with good reason, as of the $36,000,000 assessed valuation of the property in the country American citizens own $22,000,000, or nearly two-thirds of the taxable property in the Kingdom. There is a great difference of opinion even among the American residents of the islands as to whether annexation would be the best method out of the difficulty or not.
"Among other remedies they mention for placing them on their former footing is for the United States Government to cease the payment of a bounty on sugar grown in this country; or it to place a duty of 1 cent per pound on all other foreign sugars, admitting the Hawaiian product free, and the payment of a bounty of 1 cent per pound by this Government to the Hawaiian sugar planters. Of the foreign population of the Hawaiian Islands, after the Portuguese, the Americans predominate, with the Germans and English about evenly divided. The Germans as a rule take sides with the Americans in all commercial undertakings, while the English of course oppose the annexation of the island to the United States, and in support of their position argue that the natives would lose their identity in becoming suffragists of the American Government."

Now the data that I looked up, prior to the time that the company was organized, begun with the commercial beginning of the islands and extends up to the present time. It is historical, and shows the connected commercial workings of the islands from the time Capt. Cook landed there in 1778.

The Chairman. Before you go into that I would like to ask you something more about the political situation in Hawaii at the time you were there. What time did you leave the islands to go away?

Mr. Simpson. It was a few days before Christmas. I do not remember the date of the month. It was a few days before Christmas, 1892.

The Chairman. Was the subject of annexation, of which you spoke, a matter of much conversation among the people there at that time?

Mr. Simpson. It was.

Senator Sherman. A few days before Christmas, 1892, you left the islands?

Mr. Simpson. Yes.

The Chairman. That was the only visit you made to Hawaii?

Mr. Simpson. That was all. My visit was made for purely commercial enterprises. The only interest I had in getting acquainted with the people was to further the interests of my corporation. The people, as nearly as I can remember now, were in this condition: The Legislature had been in session a number of months longer than its ordinary term. The white members, composed principally of the wealthy citizens in the islands, were sacrificing their business and remaining

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in Honolulu in attendance upon the Legislature: It was a pecuniary loss to them, but they did it purely in a spirit of defense; that is to say, they expected some action of the Queen, through her henchmen in the Legislature, which would be detrimental to the business interests of the islands; just what it was they did not know. There was nobody there who was willing to say that annexation would likely take place within the near future. The general impression was that it was bound to come. They were to wait, but they feared some action of the Queen. They had no idea that the subject of a new constitution was under consideration. They had no idea that the Queen would be able to pass this opium bill. While, of course, that had been introduced in the Legislature, it had been side tracked. So long as these white members remained in Honolulu there was a feeling that the Queen could not carry it through.

The Chairman. Are the same remarks applicable to the lottery bill?

Mr. Simpson. And the lottery bill. But they finally stayed on so long that one after another would drop out, and very shortly the Queen had control of the legislature, and, as I am informed, she had these bills passed. The people went about their ordinary business. They did not disguise the annexation question, nor disguise any of the Queen's actions at all, but treated the thing as though she and the particular bill she desired to put through were standing menaces of their interests. I had several talks with Minister Stevens while I was there. Minister Stevens had been advocating the same principle of trade in Honolulu that I had been advocating in the Puget Sound region, and when he learned that I had, he very kindly called on me at the hotel and I returned his call. In the course of several conversations we became as intimate as persons might be under the circumstances. We talked principally as to the interests of the country in a commercial way. While we talked in a general way, I can not recall anything that Mr. Stevens said to me that I could construe as being in the light of anything more than a wish.

He told me that frankly and politely-made no bones about it-that the question of annexation was certainly a very live one there, and that it undoubtedly would become an issue sooner or later. He also told me that he did not express his opinion on the subject to anybody in Honolulu. That I remember distinctly. He told me that he could not do that, because it would give a wrong impression. He always stated that he took information from all classes, and I remember that some information he gave me appeared to me as though the thing must necessarily come up in some shape sooner or later. That was that in 1876, when the reciprocity treaty between this country and the Hawaiian Islands was first put into effect, the United States had practically exercised protection over these islands; that it was beyond any question not only the duty of the United States to exercise this protection at that time, but to continue to do it, on account of the monetary interests of its citizens. Mr. Stevens stated that the United States was the only country that had systematically kept a war ship there; that the British Government rarely had a ship there, and then only temporarily on its way to Australia.

The Chairman. I suppose you have stated as fully as you desire to do the political situation out there? Are there any other facts you wish to state?

Mr. Simpson. The natives did not seem to take any particular interest in the matter except that they felt that something ought to be done by the United States to relieve the sugar situation. They had no

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organized idea as to annexation or a protectorate or a better treaty, or anything of the sort, and they did not look to their own Government; they looked to the United States to relieve them. I guess that is about all I have to say on that subject.

The Chairman. Now, if you will, proceed to give the data which you say you have collected with respect to the commercial situation of Hawaii.

Mr. Simpson. Prior to the settlement of the white men in the islands, the native products were taro (or kalo), sweet potatoes, yams, sugar cane, bananas, calabash gourds, wauke (or paper mulberry), out of which they made their clothes; awa, from which they manufactured their drinks, and also a few hogs and fowls. At that time there was no circulating medium, the trade being carried on by barter. The natives were not an ingenious people, and the improvements they made were quite crude, but apparently carried on with very good judgment. They built extensive irrigation ditches, and leveled terraces, and worked their taro patches with very crude tools and implements. The first trade with the outside world was in January, 1778, when Cook traded them some nails and bits of iron for hogs, vegetables, fresh water, and wood. Portlock and Dixon were the first to recognize the commercial importance of the geographical location of the group in 1786, when they purposely made it a stopping place to replenish their ships. Portlock and Dixon were engaged in buying furs from Indians on the Northwest coast of America and selling them in the Canton market. This trade was augmented to a considerable extent.

In 1791 Capt. Kendrick, of Boston, in the sloop Lady Washington, left 3 sailors at Kauai to collect sandalwood and pearls against his return to England. This was the beginning of the sandalwood trade with China, which reached its height during the period of years covered from 1810 to 1825. Sandalwood was sold on board the vessels in the Hawaiian Islands at that time at $10 a picul, or 1351/2 pounds. The trade averaged $400,000 a year for some years. In 1835 the sandalwood trade had practically ended. Capt. Vancouver first gave the natives the slips and seed for raising orange trees and grapevines and many other subtropical plants, in 1792. The great bulk of marketable vegetation of the islands was not indigenous to the islands. Nearly everything they have there is brought from the different shores, in fact the way the city of Honolulu is located there is no foliage, except 15 or 20 cocoanut trees. Now it is a beautiful city of subtropical trees and foliage. In 1793 Vancouver returned from his trip to California and landed a bull, 5 cows, 3 sheep, the first of the kind placed on the islands. Horses were first taken to the islands in 1803 by Capt. Cleveland. Vancouver superintended the building of the first ship in 1794.

The Chairman. Where was that built?

Mr. Simpson. It was built at Lahawa.

The first organized effort for commercial relations with the United States was made when missionaries landed from New England in 1820. The first whaling ship arrived at Honolulu in 1820, to be soon followed by many others, and Hawaii was made a base of supplies. Much time was saved by ships engaged in whaling by taking their oil to Hawaii, transshipping it to New England, making necessary repairs, laying in supplies, and utilizing natives on their whaling voyages. The Hawaiian proved to be the best sailor obtainable. In 1826 it was estimated that 100 whaling ships annually were putting in at Honolulu, and each ship is said to have expended on an average the sum of $20,000 each, or about $2,000,000 a year. Recognizing the value of this growing traffic merchants

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established trading houses to gather in this important industry. The whaling trade continued to be the chief source of income to the islands for a number of years. In 1845 there were 500 whaling ships arrived there. In 1878 the whaling trade practically died out. Experiments were made in growing commodities, such as silk, cotton, wheat, sugar, coffee, but nothing of particular value was accomplished, except in raising coffee and sugar. The coffee culture increased rapidly and promised well until there came a drought in the years 1851-'52, which it was said caused a blight. That for a time ended the advancement of this industry.

The Chairman. Coffee, like the other plants you have been speaking of, was not indigenous?

Mr. Simpson. No. They have experimented in coffee for a number of years down there, and the trouble has been that the people who have been engaged in experimenting do not understand their business. They would start their trees at too low an altitude. Whenever they got above 2,000 or 2,500 feet they have had the best results. Now they are going into the matter to a greater extent than they have ever done before. They grow a splendid quality of coffee.

Senator Gray. Have they sufficient area at that altitude and higher to make it an important matter?

Mr. Simpson. Yes. Their area to a certain extent is limited, but there is a vast area that it will take a good many years to set out, especially the island of Hawaii, which has 4,500 square miles, and the greater portion of it is above 1,500 feet. The other islands are not, of course, so large.

Senator Gray. On what island is Honolulu?

Mr. Simpson. Oahu.

Senator Gray. Do you know what the area of that island is?

Mr. Simpson. Six hundred square miles.

Senator Gray. Is that all?

Mr. Simpson. It is next to the largest inhabited island in the group. There are five principal islands.

Senator Gray. The city of Honolulu has the greater portion of the population?

Mr. Simpson. Yes. Coffee that they raise there has a splendid flavor, and in time is going to become a very profitable commodity. It is known as the Kona coffee on account of its being raised in a district by the name of Kona, and it has a flavor that resembles a mixture of Mocha and Java. It has never been gone into systematically, but they are going ahead with it now, and they will undoubtedly build up a great business there.

Senator Gray. Mr. Spalding, who was before us, expressed the opinion that it would not be a success there.

Mr. Simpson. That is the opinion of nearly everybody who lives there, but it is not borne out in experiments which have been made by men who understand coffee culture. It is a peculiar industry, and must be given careful attention, and the knowledge of years must be brought to it. The merchants of Honolulu net more money for the coffee that they sell in the San Francisco market grown on the island of Hawaii than for any coffee sold in the San Francisco market, and in spite of the fact that it is not prepared for market in what would be ordinarily termed a marketable condition; it is not separated. The good and the bad are all dumped into the same sack, and while I was there one house in Honolulu had quite a little stock of it, some 1,200 or 1,500 bags, and the proprietor had refused at Honolulu 25

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cents a pound for that coffee. Anyone who is posted in green coffees knows that that is a pretty good price placed at shipment.

The Chairman. Your inquiries into the industries of Hawaii were stimulated by the trade you were trying to establish between those islands and Puget Sound.

Mr. Simpson. I took up each article to see whether we could handle it, and also took up articles that promised well. In fact, when I returned to Tacoma I completed a good size coffee company to go into the culture of coffee there, but it was killed by the revolution. The sugar business is completely controlled by the American Sugar Refining Company.

The Chairman. You mean in San Francisco?

Mr. Simpson. No; I mean the sugar trust in the United States. The sugar trust now controls all the sugar refineries in San Francisco. Do you want me to give you some sugar data?

The Chairman. Not just now; you may proceed with your statement.

Mr. Simpson. The first plantation for sugar purposes was established in 1835 by Ladd & Co., Americans, and cane was raised in a small way for a number of years. They got quite a valuable charter from the Hawaiian Government. They claimed at that time it was procured for the purpose of selling the charter. It gave them the selection of a vast quantity of land for a nominal consideration. When gold was discovered in California a new market was opened up, and the trade of the islands had greatly increased up to the year 1893. When the gold fever was on in California they had very few supplies there, and the people of the Sandwich Islands went into the raising of commodities to a greater extent than they had before or since. For instance, they started flour mills and went into the raising of wheat on the islands. I do not believe any is raised now. In the fifties sugar sold up to 20 cents a pound in California, and later the acreage was considerably increased in the hope that a reciprocity treaty would be successfully negotiated with the United States. When the reciprocity treaty was finally signed and ratified in 1875-'76 the raising of sugar cane became the chief product of the island. The first commercial treaty that was ever negotiated with the United States was in 1826; the steam navigation between the islands in the group was first started in 1853; the first steamship line between San Francisco and the islands was established in 1870, a line running through to Australia.

The Chairman. Where do they get their coal for the operation of that steam intercommunication between the islands? I want to know whether it is imported.

Mr. Simpson. It is all imported.

The Chairman. And from what part of the earth particularly?

Mr. Simpson. Altogether you may say with one or two shipments of coal it has come from Newcastle in Australia.

The Chairman. Sydney?

Mr. Simpson. New South Wales. It is from the Newcastle mines of Australia. They call it Newcastle coal. It is a bituminous coal, and it costs them in Honolulu from $6.75 to $7.50, according to the cost of shipping from Australia.

The Chairman. Is there any wood or other substance in Hawaii that will be of use in steam navigation hereafter?

Mr. Simpson. No.

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The Chairman. So that their dependence for fuel for this purpose is upon foreign ports entirely.

Mr. Simpson. Yes.

The Chairman. They ought to make a good market for coal between Honolulu and Seattle?

Mr. Simpson. Do not say Seattle. That is the poorest coal on the Pacific coast.

Senator Gray. Have you good coal in the Northwest?

Mr. Simpson. Yes; we have good coal in the mines that have been worked a long while. Now, about the woods; the indigenous woods of the Hawaiian Islands number 150 kinds. The insects have done considerable damage to them; the most common is the borer, a species of bug. I may say right there, on account of the limited amount of wood on the islands the question of rain has become quite a serious matter. When hogs and cattle became so plentiful they were turned loose, and they rooted up the trees and roamed wild, and the greatest sport they get down there is hunting wild cattle. They have destroyed all the trees below 2,000 feet, and they passed laws while I was there prohibiting them cutting trees except for firewood.

The Chairman. When you say the cattle destroyed the trees you mean they ate the foliage and under plants?

Mr. Simpson. Yes. Of indigenous woods the most common are the Oahea.

The Chairman. I do not care to go into that wood subject. My question was about getting fuel for steam navigation in the islands.

Mr. Simpson. On Oahu is the best, at $13 per cord in 4-foot lengths. And right there I would state that I sold, strange as it may seem, quite a quantity of firewood. I have an order from one firm in Honolulu to fill up whatever space we had with firewood from Puget Sound.

The Chairman. You sold that to be delivered, but you never got a chance to deliver it?

Mr. Simpson. No.

The Chairman. Where did you get the data that you now hand me in relation to the commerce between the United States and Hawaii??

Mr. Simpson. From the annual reports of the collector-general of customs of the Hawaiian Islands, and from reports emanating from the Treasury Department of the United States. One verified the other.

The Chairman. Are you satisfied that the figures that are based upon that data are correct?

Mr. Simpson. I am. The figures are as follows: The total export and import trade of Hawaiian Islands from first year of official data recorded, 1855, to December 31,1892, amounts to $265,136,486, the imports being $98,981,325 and exports $166,155,251. This is with all countries. The first year in which there is a complete record of the business done between the United States and Hawaiian Islands was the year 1870. The total amount of merchandise and bullion exported to and imported from Hawaiian Islands from 1870 to 1892, inclusive, is valued at $203,145,447, divided as follows:

Exported to Hawaiian Islands.

Imported from Hawaiian Islands.

Total.

Merchandise

$55,183,611

$138,670,737

193,854,348

Bullion

8,108,508

1,182,591

9,291,099




Total

63,292,119

139,853,328

203,145,447

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The above table gives some idea of the profit which has accrued to the American traders from the Hawaiian Islands traffic. The United States secured from the Hawaiian Islands during a period of twenty-two years----

Merchandise and bullion to the value of

$139,853,238

For which they returned merchandise and bullion to the value of

63,292,119


Showing a balance of trade in favor of the United States of

76,561,209

The reciprocity treaty went into effect in September, 1876. The net total excess of imports over exports of both merchandise and bullion up to 1877 was $3,139,997. By deducting this amount from the net balance of trade from 1876 to 1892 the amount derived, $73,421,212, represents the balance of trade in favor of American traders under the operation of the reciprocity treaty.

The foregoing figures show the difference in the volume of trade and the value of trade prior to and during the time of the operation of the treaty of reciprocity of 1876.

The Chairman. Does your table show whether there is any material falling off in the trade in consequence of the repeal of the tax on sugar?

Mr. Simpson. The figures do not show that conclusively, for this reason, that the season following the adoption of the McKinley bill the gross tonnage was increased very much, but the price was reduced for that reason. The actual figures show the production of sugar was much greater than it had been prior. Some new sugar plantations came into bearing that were not producing before.

The Chairman. Have the business enterprises with which you have been associated made any examination into steaming coals in what you call the northwestern Pacific, that is, along the line of the United States and the British Possessions on the Pacific Ocean?

Mr. Simpson. I have In a general way. Of some particular kinds of coal I made a specific examination for the purpose of using them on our line of steamship.

The Chairman. Where was your line designed to run; from the United States to where?

Mr. Simpson. To points on Puget Sound; that is to say, Victoria, Seattle, and Tacoma.

The Chairman. Where did you expect to get your supply of fuel?

Mr. Simpson. It depended very largely on where we got the greatest amount of our freight. If we could get a sufficient quantity of freight to warrant us in going into Victoria to stop there, we would have to get coal from the Comax mines in California. If it were not advisable to go in there we proposed to get a quantity of coal in Roslyn in Washington, which is mined exclusively by the Northern Pacific. It is equal to any coal in the State of Washington; but the Vancouver coal is a little cheaper, from the fact that the Northern Pacific Railroad Company put an arbitrary rate on carrying coal to the seaboard, because they had to haul over the mountains.

The Chairman. What is the length of the haul to the sound?

Mr. Simpson. About 75 miles.

The Chairman. Is there no coal available on Puget Sound?

Mr. Simpson. That is the Roslyn coal.

The Chairman. Is there no coal on Puget Sound but that which is brought 70 or 75 miles by rail?

Mr. Simpson. Within 7 or 8 miles of the sound.

The Chairman. Is that good coal?

Mr. Simpson. It is fairly good coal, but not so good as Roslyn coal.

S. Doc. 281, pt 6----72

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The Chairman. Have they many open mines in the State of Washington?

Mr. Simpson. Quite a number; I should say in the neighborhood of 40 or 50. But there are not many of them that are worked. The fact is, the coal deposits are so great that it does not pay to work them, except they have a guaranteed channel for their trade. Nearly all the coal mines are owned or controlled by large corporations, such as the Southern Pacific Railroad Company, the Union Pacific Railroad Company, the Northern Pacific Railroad Company, the Great Northern, and the Pacific Coast Steamship Company. They are large users of coal, and nearly all of them have gone into the coal business, because they wish to make the profit.

The Chairman. As the mines are worked deeper does the quality of the coal improve?

Mr. Simpson. That is the general belief. Of course, where coal deposits run, as you might say, along the surface, they do not increase; they are rarely worked; they do not bother with them.

The Chairman. What was to be the tonnage of the ships that you were to send out on this line?

Mr. Simpson. About 3,000 gross.

The Chairman. How much of that would be occupied in carrying fuel to and from Honolulu?

Mr. Simpson. Do you mean for the use of the ship?

The Chairman. Yes.

Mr. Simpson. We figured that we would put in 1,000 tons of coal.

The Chairman. That would leave how much room for freight-about 1,000 to 1,200 tons?

Mr. Simpson. Yes.

The Chairman. About one-half your cargo would consist of fuel for the ship?

Mr. Simpson. The size of ship we proposed to operate.

The Chairman. That would be still greater on a smaller ship?

Mr. Simpson. The proportion would be still greater.

The Chairman. So that, in making a voyage in a steamship from Puget Sound to Honolulu and return, you would make the calculation that one-half your space in going out to Honolulu and one-fourth of it returning would be occupied by fuel?

Mr. Simpson. In a general way; yes.

The Chairman. How would the cost of coal, if you had to purchase it in Honolulu, compare with what you would have to give for it, say, in Victoria?

Mr. Simpson. A good steam coal sold by the dealers in Honolulu would cost us $14 to $21 a ton, according to the man's ability to make a trade with those fellows. But that is a contingency we would not meet?

The Chairman. What did it cost in Victoria?

Mr. Simpson. The best coal that we could put on at Victoria would cost us $3.50 a ton.

The Chairman. In both cases do you mean on board ship?

Mr. Simpson. Alongside the ship, on a lighter. The Roslyn coal would cost us a trifle more than that; and there is another still nearer the coast, known as the South Prairie coal, which carries a high proportion of steam properties. But it is a small mine, and we could not probably get very much of it. If we could get any we would put that coal on board the ship from coal bunkers at about $3 a ton. Do you want the coal proposition of the Pacific Ocean?

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The Chairman. I want to know what acquaintance you have with steam communication between the eastern and western shores of the Pacific Ocean. I want to know generally what your acquaintance with the subject is.

Mr. Simpson. The way it is operated now is by two lines of ships from San Francisco to China and Japan, making Yokohama the port of entry, making one line from San Francisco to Australia, stopping at Honolulu, Samoa, Apia, New Zealand, and Sidney; and a line of ships to Vancouver, British Columbia, to China and Japan, operated by the Canadian Steamship Company, and also under subsidy from the English Government and Canadian Government-heavy subsidies, too-and a line of steamships from Tacoma to Yokohama and Hong Kong.

The Chairman. Have you ever had any business connection with any of the trans-Pacific lines?

Mr. Simpson. I have imported a few goods, but nothing of any importance. I have never been employed by any of them.

The Chairman. As a rule, what is the tonnage of ships that cross the Pacific Ocean?

Mr. Simpson. Ships running from San Francisco to Yokahoma, on the Oriental and Occidental line, average from 4,000 to 5,000 gross tonnage. On the Pacific Mail, operating between the same points, they run from 3,000 to 5,000. On the Spreckles line, between San Francisco and Australia, they run about 5,000 tons, and they have one ship that runs only between San Francisco and Honolulu, 3,500 tons. One of the ships of the Canadian Pacific Railroad Company, operating between Vancouver, China, and Japan, the Empress of India, is about 14,000 gross tons, and the ships running between Vancouver and Australia on the Canadian Pacific line are about 5,000 gross tons, and those between Tacoma and China and Japan are from 3,000 tons to 5,500 tons.

The Chairman. Would all these ships on leaving the American coast take coal for the entire voyage across the Pacific Ocean?

Mr. Simpson. That is according to circumstances. Possibly I can give you full information in reference to that subject. The ships running from San Francisco to Yokahoma, as a rule, only carry enough coal to take them to China and Japan, except the coal market in Yokahoma for Hong Kong is such as to to warrant them in carrying coal from San Francisco, provided they have plenty of space to carry it. They usually take from San Francisco a coal supply for twenty days. The ship going from San Francisco to Yokahoma takes about sixteen days out and about fourteen days to return, and they consume in round numbers from 40 to 50 tons of coal per day. That coal costs them in San Francisco from $6.50 to $7.50 per ton, and they purchase whichever coal is most advantageous to them in price and quality. Coal is taken to Australia from San Francisco, from England, and from the Pacific northwest coast. The prices are of various kinds, averaging about the same; that is, for some coals. Of course, cannel coal for stove or grate purposes from the English mines runs higher. The manner in which that coal is taken from San Francisco is by the operation of established lines of colliers between San Francisco and the mines of the Pacific northwest by ships going from England to San Francisco or points on the Pacific coast, bringing coal in ballast, and by ships carrying lumber from the Pacific northwest to Australia and securing a return cargo of coal.

The Chairman. Is that a large trade?

Mr. Simpson. Quite a large trade. It is very rarely that a ship finds

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it necessary, a steamship engaged in the transportation business, to stop at any way port for coal. It is very seldom that they do that now.

The Chairman. Does the course of a vessel from San Francisco to Yokohama take in Honolulu?

Mr. Simpson. No; Honolulu does not lie in the direct course between San Francisco and Yokohama.

The Chairman. How far away is it?

Mr. Simpson. The Geodetic Survey people make it 952 miles.

The Chairman. How long would it take a steamer to make that distance, running at the ordinary rates at which they run in crossing the Pacific Ocean?

Mr. Simpson. The ships now in that traffic, when they go into Honolulu, lose an average of about three to three and a half days. Now, there is a point that comes up right there.

The Chairman. You are speaking now of Yokohama and San Francisco?

Mr. Simpson. Yes.

The Chairman. Suppose it were between Hong Kong and San Francisco?

Mr. Simpson. Those lines do not go to Hong Kong.

The Chairman. I mean, suppose there were a line between San Francisco and Hong Kong, would not that go by Honolulu?

Mr. Simpson. I am not sufficiently posted to say.

The Chairman. A steamship line from San Francisco to Australia, would go by the Sandwich Islands?

Mr. Simpson. It is in direct line.

The Chairman. So that a steamer going from Yokohama to San Francisco would have to leave its course about three days, if it had to go into Honolulu for refreshment, fuel, or anything else? That would be about the length of time?

Mr. Simpson. Yes. But it does not seem to me to be very much of a loss. The Pacific Mail Steamship Company and the Occidental and Oriental Steamship Company, operating between San Francisco and Yokohama, are operating on an agreement between them whereby the ship of one line stops in at Honolulu one month and one of the other line the next month. They have a schedule of a year at a time, and by stopping in at Honolulu they do not make any more trips. Consequently the pay roll goes on the same. In reference to the pay rolls there is less difference between the money spent for labor on board those ships running to China and Japan than there is on the ships running from the American coast to the other points in the Pacific Ocean, for the reason that they employ Chinese and Japanese laborers, and get them very much cheaper. The cost of labor is only 5 per cent less than it is upon ships operating in the Atlantic Ocean and employing English labor; so that, for that reason, they only lose what coal is actually necessary for them to buy in making the trip.

The Chairman. The point of my inquiry was in reference to the advantage of the Hawaiian Islands-of course, Honolulu in particular-as a resting place, place of refreshment, place of repairs in case of any disaster to ships crossing from any portion of the United States to any of the large cities of Asia they might choose to enter. That was the point of my question-what you have to say on that subject. If you have anything to add you may proceed to state it.

Mr. Simpson. There can be no question about the advantage of the Hawaiian Islands in the case either of disaster to ships or the use of the islands as a coaling station for the Navy of this country. In a

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commercial way the loss of the principal lines in running from the United States to the Orient is practically confined to the extra coal that they may consume in making the trip, which, on the line now in operation between San Francisco and Yokohama, would be in the neighborhood of $600 or $900. Of course, the lines running from points between Vancouver and Yokohama are of no benefit; but the running between Vancouver and Australia, or San Francisco and lines Australia, or Nicaragua and the Orient, are of inestimable value.

The Chairman. If the Hawaiian group of islands were in charge of some great and powerful maritime government, in your opinion would it become a central distributing point of the commerce of the Pacific Ocean in almost every direction-a point of interchange and distribution? Of course, the idea which is couched in my question means that under such conditions would it be likely that Honolulu or the Hawaiian Islands might become a great commercial center?

Mr. Simpson. From a commercial sense, strictly speaking, the Hawaiian Islands can hardly be a commercial distributing point except for the goods used within their own country. But in so far as the protection of commercial shipping is concerned, the islands are certainly of great importance. That is to say, the Hawaiian Kingdom possessed by any maritime power would give to the ships of that nation a particular advantage in times of peril.

The Chairman. What is the objection to productions of India and China and Japan meeting the productions of Mexico and the United States and British America for exchange at Honolulu?

Mr. Simpson. That is a condition that more likely would have existed prior to 1850 than it is likely to exist there now, from the fact that in those days a line of clipper ships was in use, which made it advantageous for an interchange of commodities on through business. But now, with the railroad and steamship traffic, I can not see where it is going to be of any benefit to the commerce of the world, in a strictly commercial sense, in so far as making it a trading post is concerned.

The Chairman. You, therefore, assume that steam power is to supplant the sailing ship entirely?

Mr. Simpson. Certainly. In the days of sailing ships it was common to use that point as a base of supplies where ships were engaged in various kinds of traffic, as, witness the whaling trade. It was better to employ ships to transport the products which the whaling ships procured than it was to send those ships all the way around the Horn; it saved them considerable time for getting oil from the whale.

The Chairman. But transportation on sailing ships is cheaper than on steamers?

Mr. Simpson. That is true, of course, if limited to steady markets. But as that country stands there is no product that passes by that island, no two products, one growing in the Orient and one in the South American Continent, that are interchangeable as a common thing. The usual route of vessels engaged in that trade is, they start from England, go to Australia with commodities, and pick up a cargo there if possible. From there they go to some point on the Pacific coast, load a cargo, and return to the United Kingdom.

The Chairman. Perhaps I can illustrate my question to you better by supposing a case. Suppose you have your choice between sending a cargo of pig iron, hardware of the coarser kinds, heavier kinds, or steel bars for railways, or other material of that sort, on board a sailing ship or steamer?

Mr. Simpson. You mean commodities?

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The Chairman. Commodities, yes; which do not require too rapid transportation, but one that is cheap and safe, would you not prefer to ship your commodities on a sailing ship if you could save freight by doing so??

Mr. Simpson. Do you mean, if they were going to the Orient, to take them to Honolulu and then ship them to the Orient??

The Chairman. Or as a place of refreshment for ships?

Mr. Simpson. In that case it undoubtedly would be of great advantage.

The Chairman. I do not agree with your assumption that steam transportation or steam navigation is going to supplant the sail. I think it will be found, after a while, that the supply of coal is so limited, or the price will be so great, that for the heavier commodities it will not be used for transportation and sailing ships will come in vogue and be an important part of the commerce of the world.

Mr. Simpson. One reason why I take that ground is, when I was in Honolulu I saw a bill of lading issued by the Southern Pacific Railroad Company of goods shipped from London and routed across the Atlantic and the United States by the Southern Pacific Railroad Company, and from San Francisco to Honolulu by steam navigation. Arbitrary rates exist across the American Continent and between San Francisco and Honolulu. The rate fluctuates on the Atlantic according to the displacement of cargo offered, and that transportation was 31 shillings and 6 pence. The same articles taken from New York City to Honolulu overland would cost us in American money $5.30. The same articles taken in a sailing vessel from London to Honolulu, occupying some eight months in time, (and it would be a good trip to make it in eight months), would cost $4.85, according to the then existing rate. Now, the persons shipping those goods preferred steam across the Atlantic and the American Continent, over a sailing vessel, from the fact that the money invested in the cargo in transit would be greater than the cheap rate on the return cargo from Honolulu, except the ship struck there in the sugar season, when they could get a return cargo to the Pacific coast. There would have to be that difference arranged for.

The Chairman. As a general proposition, I suppose, it is not to be disputed that over a long distance the transportation of heavy articles of commerce would be cheaper by sail than by steam?

Mr. Simpson. That was the generally accepted idea, except where you get cheap fuel. The resources of the Pacific Ocean for fuel are greater than on the Atlantic. They have three distinct bases of supply where there is an enormous amount of coal. I speak of the Japanese coal fields, the Australian coal fields, and the coal fields of the Northwestern Pacific coast. The Japanese coal fields and the Northwest Pacific Coast fields are almost inexhaustible. An enormous amount of coal can be produced there. The methods of handling in the Northwest Pacific coast are very crude in comparison with the manner the business is handled in well-settled and well-worked coal fields. It is so much in its infancy that it has hardly gone beyond its experimental stage.

The Chairman. As yet the real value of the coal out there is not known, and can not be known, until they go further down into the seam or vein?

Mr. Simpson. No. Known coal fields are so numerous and known deposits are so numerous at this time that it would be a waste of money to expend it in finding new fields.

The Chairman. You mean in our own country?

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Mr. Simpson. In the State of Washington, I know that to be true.

The Chairman. Give a general statement of the commercial relations between Hawaii and the United States.

Mr. Simpson. The Hawaiian Islands are to the Pacific Coast and to the country west of the Mississippi River what the West Indies are to the Atlantic and the country east of the Mississippi River. They raise and can raise the same products. They are at present nearly identical in formation, in methods, and manner of doing business, and of articles actually handled. There is, to my mind, no alternative for the United States except to provide conditions and manner of doing business with the Sandwich Islands, from the fact that the country west of the Missouri River is practically dependent upon those islands for the commodities which are raised in the islands, to procure them at anywhere near the price at which the same commodities are sold east of the Mississippi River. In the West Indies sugar, rice, and the fruit culture is in its infancy, but it will be augmented very fast. The principle article, sugar, is dependent upon the Pacific coast market, so called, and the Pacific coast is compelled to reciprocate. For this reason sugar raised in Cuba and refined in the Eastern part of the United States is compelled to pay too great a transportation fee to reach the markets of the Pacific coast. Were there no sugar raised in the Hawaiian Islands the sugar would be received from China and Japan rather than from Cuba, on account of this transportation. The sugar business is controlled by the American Sugar Trust, of which Spreckels and his interest are a part. During the winter of 1892-'93 contracts were made by the American Sugar Trust, through Spreckels as agent, for their product of sugar for five years. The stipulations of that contract are these:

The trust agrees to pay to the grower for sugar laid in San Francisco the same price, that Cuban sugar brings in New York City, less a quarter of a cent per pound. This quarter of a cent per pound difference is for the purpose, as claimed by the sugar trust people, to compensate them for the difference in freight that they would have to pay if they had to take Cuban sugar to the Pacific coast. It is simply a subterfuge for the purpose of obtaining the advantage of a quarter of a cent per pound. That contract also states that all sugar running in grade of 96 per cent saccharine shall pay a thirty-second of 1 cent per pound for each degree over 96 per cent saccharine, and a sixth of 1 per cent on each degree under 96 per cent saccharine. All the planters in the islands engaged in the sugar business have signed this contract from the fact that there is no other outlet. When I was in Honolulu in the winter of 1892 the growing price of sugar was about $90 per ton. The cause of that was that the previous crop of Cuban sugar had been practically a failure, and they were enabled to get a much better price than they are getting at present. The last quotations which I received from Honolulu they were paying for Hawaiian sugar laid in San Francisco 27/8, almost the lowest price it has ever reached, and which price does not pay even a small interest on the investment.

The rice business of the islands is carried on principally by the Chinese and Japanese. The rice they raise grades with what is known commercially as No. 1, or as good as any rice in the South Sea Islands or off South Carolina.

The Chairman. How is it raised?

Mr. Simpson. By irrigation; different from what it is in the fields in the South.

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The Chairman. You mean irrigation brought on the land by ditches?

Mr. Simpson. No; but they allow the water to stand until the crop ripens, then they draw it off. If they can not, the men go on and do it in rubber boots. Most of that rice is milled by one concern at Honolulu, and very little of it is shipped to the United States in the condition of what is known as paddy. It enters successfully in competition with Japanese and other Oriental rice on the Pacific coast, and very rarely does any rice from the Atlantic seaboard, South Carolina, or Louisiana reach the Pacific coast. I do not know of but one season where any was shipped there, and that was three years ago when there was an enormous crop in the South and they could not find a market.

The next interest of importance in the Hawaiian Islands is the banana business. In the Hawaiian Islands they are raised usually in very small patches by Chinese. They are handled through a middleman, and the cost on board ship at Honolulu is about 100 per cent more for bananas than it is in any of the West India countries. In 1892 there were $175,000 worth of bananas shipped from the Hawaiian Islands. Ten years before there were none. With the decline of the sugar products in the Hawaiian Islands the people have no alternative except to turn their attention to raising of coffee and fruits. It will require some years to bring coffee to a distinctively commercial point, as that requires a system of individuality which fruit does not need. However, experiments are now being made and organized plantations are going into the matter in a scientific way. The fruit culture in the islands will unquestionably take lead in the new departure for other goods to raise beside sugar and rice. That is from the fact that there is no other commodity they can raise and which will have so great and popular a market, particularly, as bananas.

To illustrate that, in 1882 there were 35,000 bunches of bananas landed at New York City. In 1891 there was an average of 35,000 bunches per day arrived in New York City. Today the banana in the New England States is the poor man's food. Down to eight years ago the banana was unknown except as a curiosity, and now they buy them by the carload. I am told that they affect the trade in flour, bacon, and other common foods of the people. One pound of bananas has as much nourishment in it as 4 pounds of bread. There is a great market west of the Missouri River, which is practically virgin, and the cost of raising bananas in the Hawaiian Islands will be undoubtedly decreased with the scientific growing of them, and the conditions are such that they can be transported to points east of the Pacific slope and west of the Missouri River as cheap as they can be brought from west of the Atlantic and east of the Mississippi. At present a bunch of bananas from Honolulu, sold in the markets of the Pacific Slope outside of San Francisco, will bring from $3 to $4.50.

The Chairman. Are not bananas raised abundantly and profitably in southern California?

Mr. Simpson. No; no more than they can be raised profitably in the southern part of Florida. I have seen them raised in Florida, but their growth was stunted. While they are in the same latitude that the Hawaiian Islands are the conditions seem to be different. The pineapple is another food which is being raised systematically, more so probably than bananas. They can raise and mature pineapples every month in the year. That is also true of bananas. It is different in the Hawaiian Islands from what is in any other portion of the world. This would insure a high price in the markets of the Pacific coast. In two months of the year, in August and September, the pineapples

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are an overproduction, and until a treaty is effected with the United States on a much broader plan than the one now in effect, the raising of these fruits, and especially pineapples, will not be so great a success. The present treaty with the United States admits comparatively a few of the Hawaiian articles into the United States and all of the articles produced and manufactured in the United States into Hawaii, with the possible exception of spirits and tobaccos.

Until a treaty is effected whereby manufactures of all descriptions and canned goods are placed on the free list from that country no marked improvement can be made. The general impression in the Hawaiian Islands when I was there was that when the treaty runs out in 1894, when canned goods in the Hawaiian Islands would certainly go on the free list, the effect would be to accelerate the trade to a greater extent than any other method that could be adopted. Strange as it may seem, the Hawaiian Islands are entirely dependent upon the Pacific coast for their supplies of every kind and description.

The Chairman. What do you mean by supplies? They do not depend upon the Pacific coast for taro?

Mr. Simpson. Of every class and description. That is to say, the chief subsistence are the articles which are procured from the Pacific coast. Of course, the most indigenous article of food the natives live on is what is commonly called poi, a pasty stuff that is made from taro and raw fish. But in spite of that fact, of the 92,000 people in all the islands, they are known as the greatest consumers per capita of any people in the world.

The Chairman. Do you mean of provisions?

Mr. Simpson. Of everything. There is more stuff bought and taken in there than in any other place in the world. To illustrate a little more fully, I will cite some of the articles which I sold while I was there. Brick, lime, apples, potatoes, butter, eggs, fire wood, beer, banana crates, flour, whole barley, rolled barley, chopped feed, cracked corn, bran, shorts, feed wheat, oats, timothy hay, wheat hay, alfalfa, carrots, mules, coal (steam and stove), plaster, shingles, salmon (canned and salted), coarse sand, wire nails, onions, sash, doors, and blinds, crackers, provisions, hardware, etc.

The Chairman. With what do they pay for all this?

Mr. Simpson. The manner of doing business in the Hawaiian Islands is, these principal houses pay cash for what they get; that is to say, nearly all of them carry their profits to San Francisco. One of the large houses showed me its books, disclosing that he had not, since he had been in business, had less than $34,000 of cash on deposit in San Francisco. Goods are paid for in cash in San Francisco when they go on board the ship and discounted.

The Chairman. Is the money actually shipped to San Francisco, or is there exchange?

Mr. Simpson. No; it is carried there.

The Chairman. How do they get hold of this money?

Mr. Simpson. The money that they get from the sale of sugar is deposited to the credit of these concerns in San Francisco, and they pay their bills in that manner.

The Chairman. Is there enough commerce in the Hawaiian Islands to enable them to become the largest consumers per capita in the world?

Mr. Simpson. Yes. The figures that I have heretofore submitted to you prove that assertion, showing that since the year 1870 there has

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been a profit to the traders in that business of about $76,000,000 in round figures.

The Chairman. If I comprehend your statement correctly the whole population of Hawaii is dependent for subsistence in every way upon the sugar crop?

Mr. Simpson. The sugar crop and the rice crop; they are the two principal crops.

The Chairman. Do they not raise cattle, hogs, and poultry?

Mr. Simpson. No; they are the most improvident people I have ever met with. I have never lived in the South, but in the West Indies and in the several countries where they have cheap labor they have utterly no idea of the value of money. I was standing on the corner talking to a contractor when a native laborer came up and asked for a position. The contractor and I were talking of the improvident character of the native Kanaka. The contractor asked him how much he wished for his work and the fellow said $50 a month. The contractor said, "Jack, I can not pay you that; I will give you $2 a week," and the Kanaka at once said, "When shall I go to work?" That is true, they have no idea or conception of the value of money.

The Chairman. You are now speaking of the very low classes?

Mr. Simpson. Of the natives.

The Chairman. They are not all that way; some of the natives are respectable people, having sense and character.

Mr. Simpson. I do not remember having met more than one or two full-blooded natives who were men of means. I do not wish to question their character, because they are the most honest people that I ever met. Of the so-called 35,000 natives in all the islands, as a matter of fact there are only about 6,000 who are full-blooded natives, the balance having a strain of various kinds of blood. Liliuokalani has a strain of negro blood, and is not a descendant of the ancient chiefs of the islands, as is generally supposed.

The Chairman. You think the mixing of the blood has improved the people?

Mr. Simpson. Yes. There are other articles which can be raised and manufactured with profit in the islands. For instance, common salt can be gathered at a very low price, and if the trade were entered into it could be sold at a very good profit.

The Chairman. There are none of the leading minerals-iron, copper, and lead?

Mr. Simpson. No; the soil is all disintegrated lava, and everything nearly requires irrigation.

Adjourned to meet on notice.

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Washington, D. C., Wednesday, February 7, 1894.

The subcommittee met pursuant to notice.

Present: The chairman (Senator Morgan) and Senators Butler, Sherman, Frye, and Senator Dolph of the full committee.

Absent: Senator Gray.

SWORN STATEMENT OF COMMANDER NICOLL LUDLOW.

The Chairman. At what time have you visited the Hawaiian Islands?

Mr. Ludlow. I have only been there once. I was commander of the Mohican. I arrived there on the 10th of February last and left there on the 1st of May.

The Chairman. What American ship did you find in port?

Mr. Ludlow. I found the Boston there. Subsequently the Alliance came in and reported. The Adams was sent down to take the place of the Mohican, and on her arrival I went north. The Mohican was Admiral Skerrett's flagship; I was his chief of staff during the time I remained there.

The Chairman. On your arrival at Honolulu, what did you find to be the condition of the community there as to quietude and regularity in the conduct of business?

Mr. Ludlow. I had never been there before, and I am not able to make any correct comparison of the affairs then with what they had been. But the people complained of hard times, as they began to do everywhere. Of course, business went on just the same; they did a good deal of talking; apparently they had not much else to do; stand around and talk on the streets and on the piazzas.

The Chairman. Were you around in the city much during the time you were there?

Mr. Ludlow. Yes; I was ashore every day. I was brought in contact with everybody in town of every position. As the admiral's chief of staff, I returned a great many calls with him, and made a great many social calls.

The Chairman. Were you at that time aware of the existence of any organization for the purpose of overturning the Provisional Government?

Mr. Ludlow. None whatever, any more than, of course, the adherents of the Queen on one side and of the Provisional Government on the other; there was some talk. There was no conspiracy or fighting, simply talk. I have been around in different parts of the world, and I thought that Honolulu was as quiet a community as you could find; everybody's doors and windows were unlocked. It was so night and day; as quiet a community as exists on the face of the earth.

The Chairman. Would you describe it as a community satisfied with the existing government?

Mr. Ludlow. The Provisional Government?

The Chairman. Yes.

Mr. Ludlow. A great many were dissatisfied with it; thought that it ought not to be there; thought that it was not the legitimate government of the islands.

The Chairman. Were they satisfied with the administration of the affairs of the Government?

Mr. Ludlow. Oh, yes; I heard nothing said about their honesty and proper administration of the affairs of the Government; never heard


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