Statehood & Business: Hawaii Statehood 50 Years
By HARRY EAGAR, Staff Writer
POSTED: August 23, 2009
In 1959, plantation agriculture was big business in Hawaii. The plantations were branching out into tourism, but sugar and pineapple – and coffee in Kona – dominated.
In August, with the days of the territory numbered, a typical issue of The Maui News advertised a total of half a dozen help wanted ads. The plantations didn’t advertise for help; they had their own labor recruitment system.
It dwarfed the nonplantation labor system. In August 1959, pineapple plantations hired 1,100 Maui youngsters on school vacations, most of them to work in noisy, hot canneries.
The jobs were much sought after. Damien Farias, owner of Maui Toyota, recalls waiting for three days on a labor bench for a chance to work at a cannery on Oahu when he was in school.
Statehood was expected to give a boost to agriculture. The summary of Hawaii agricultural history published by the state Department of Agriculture says that "with statehood, federal funds became available for the development and growth of Hawaii’s agricultural industries with funding for programs such as farm credit, natural resources and statistical services."
It did not, of course, work out that way.
Coffee production peaked during 1957-58 at 15 million pounds of green beans, and it was down to half that in 2008. Sugar was still expanding toward a record 1,234,121 tons in 1966, but this year production will not be much more than 10 percent of that. There were nine pineapple canneries in 1959, producing 80 percent of the world’s canned pine. Today, none.
The men – and they were all men – who ran the island’s "Big Five" companies understood that farming was not Hawaii’s future, even if as early as in the 1950 territorial Constitutional Convention they had put promotion of agriculture into their organic law. As early as 1954, Alexander & Baldwin Inc. began planning to convert 1,500 acres of desolate rock at Wailea into a tourist destination to compete with Waikiki – which also embraces about 1,500 acres.
But there wasn’t water at Wailea, or paved roads, so Amfac got the jump on A&B by hiving off a similar amount of Pioneer Mill land to build the Kaanapali resort, the first destination resort in the Neighbor Islands. Pioneer Mill had the advantage of a nearby town, though Lahaina was decayed with mostly empty storefronts along Front Street.
In those days, United Airlines advertised that its new prop planes had reduced the trip from California to only eight and a half hours. Jets were on the way, though, and it was going to be possible for middle-class Californians to trip over to Hawaii for a week or two. Waikiki’s days as a chummy resort attuned to a few wealthy visitors who could afford to stay for weeks or months at a time were numbered.
And so were the days of the Big Five. A&B is the only one left with a plantation (Hawaiian Commercial & Sugar, as well as Kauai Coffee), and that is probably attributable to its absorption of Matson Navigation more than anything else.
As the number of tourists delivered by air rose from hundreds of thousands to millions, the food, T-shirts and rental cars they needed were shipped in, along with the construction materials to build the tens of thousands of hotel rooms to house them.
Today, Matson is half of A&B, HC&S only about 7 percent.
Amfac did worse. It was acquired by Mainland interests, and for a time was buoyed by ownership of Liberty House, a local department store chain that made lots of money selling to spendthrift Japanese tourists enjoying a strong yen in the 1980s.
But Liberty House stopped being profitable in the 1990s and was sold to Macy’s; the Kaanapali resort (most of which had been sold off) was in trouble; and Pioneer Mill went out of business. The land remains as Kaanapali Development Corp., which intends to build large housing projects in West Maui.
Castle & Cooke was taken over by David Murdock, who juggled its name variously with Dole, a pineapple company that turned itself into a global diversified farming and distribution company. The name lives on as owner of most of Lanai and builder of its two luxury resorts. Pineapple, though, is gone from Lanai, no longer an isolated island with a population of barely 2,000 people.
C. Brewer & Co., the oldest operating business in the islands, went out of sugar and everything else. Also going through a series of Mainland owners, it sold off its land and businesses and all that is left today is Wailuku Water Delivery Co., which owns about 13,000 acres of rain forest that it would like to sell to Maui County.
Theo Davies got out of agriculture early and turned to urban businesses like selling cars and pizzas.
Today big business in Hawaii means diversified companies like HEI (whose core business is electricity), banks like First Hawaiian (which is owned by a French bank) and hotels (which likewise are almost entirely owned offshore).
The biggest business operation on the island, though, is Kahului Airport.
The revenues generated by the owner (the state Department of Transportation) and the private businesses that use the airport total hundreds of millions of dollars a year, probably surpassing the total income of all the businesses operating at Kaanapali. (It would be difficult to work it out, though, because so many of the businesses in both of these island economic centers are parts of other, much bigger businesses that do not report their local enterprises separately.)
At statehood, business was mostly local, big or small. Today, island business is part of a global web of commerce.
* Harry Eagar can be reached at email@example.com.