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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,