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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.