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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


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