No. 239.
Mr. Comly to Mr. Evarts.
Legation of the United States,
Honolulu, June 9, 1879.
(Received June 26.)
No. 75.]
Sir: Referring to your dispatches Nos. 40 and
43, I have the honor to report.
No. 40 directs me to communicate with “the Hawaiian Government upon the
subject, certain alleged frauds and contemplated frauds upon the
revenues of the United States.* * * *
No. 43, received May 27, informs me that the Secretary of the Treasury
“is now desirous that a full report be obtained from Honolulu concerning
the frauds alleged to be committed in the importation of sugars, and
also of rice, from the Hawaiian Islands into this country”; and I am
instructed and directed to comply, at my earliest convenience, with the
wish of the Secretary of the Treasury.
My attention is also directed to the report of the late Consul Scott,
before mentioned.
I have accordingly communicated with the Hawaiian foreign office and the
United States consulate, and inclose full copies of the correspondence
with each. (Inclosure No. 1 to No. 8, inclusive.)
At my request, Mr. Hastings also consulted with shipmasters long in
[Page 530]
the coasting trade, and
prepared a descriptive list of the harbors, roadsteads, anchorages,
landings, and ports of entry in the Hawaiian Islands, a copy of which is
made inclosure No. 9. I requested him orally, also, to ascertain, if
possible, the cost per pound of landing, repacking, and re-shipping rice
and sugar, and include the same in his report. He states the result
approximately in the conclusion that it would be cheaper to pay the duty
than to evade it by these expensive means.
The Secretary of State will find valuable, and I think accurate
information in the inclosures which make reply to my inquiries.
The vice-consul says:
I do not know of any frauds, either actual or contemplated * * *
Nor have I ever known or had any cause to suspect, during a
residence of nearly two years at this post, that either rice,
sugar, or any of the articles named in the schedule of Article
II of the treaty were being brought to these islands for any
such purpose.
As Consul Scott’s report is inclosed to me, and my attention is directed
to it by the Secretary of State, I will ask the Secretary to observe
that the facts as stated by Consul Scott do not differ from the facts as
stated by Vice-Consul Hastings.
Consul Scott says:
Knowing the strong temptation there would
be to commit frauds on the revenue, * * * I have been watchful
in that direction. So far, I have been unable
to detect anything to lead one to believe, &c.
Again:
From my observations and investigations, I have no reason to
doubt that the rice so far imported has
and is being (sic) consumed by the
Chinese on the plantations and otherwise on these islands; nor have I any reason to say now that the
lower grades of sugar being imported will be used otherwise than
for consumption here, but their importation certainly creates
great facilities for fraud on our revenues under the treaty,
&c.
Referring to the Hawaiian customs officials, he says that “they
understand that if fraud should be connived at by them it would be a
good reason on the part of the United States to declare the treaty null
and void, and this country has too good a thing in the
legitimate operations of the treaty to run any risks. “Still,”
says the late consul, “this has not made me less vigilant.”
The collector-general, in his letter to the Hawaiian minister of foreign
affairs, states that “there has been no unrefined sugar imported since
the treaty went into effect, except one small lot of 180 pounds from
China.”
It seems safe and patriotic to hope that the vigilance of our late
consul, combined with that of the interested Hawaiian customs officers,
has prevented the exportation of this 180 pounds of Chinese sugar to the
United States as the growth and product of the Hawaiian Islands, and it
seems fair to suspect that it has not been “used otherwise than for
consumption here,” whatever “facilities for fraud on our revenues under
the treaty “may have been generated by “this importation.”
As to rice: The Hawaiian minister of foreign affairs states that nearly
all that is imported here comes from Japan and “pays a duty in this
country of one and a half cents per pound.” This
rice could hardly be taken out of bond here and exported to the United
States as Hawaiian rice. It would be necessary to first get it out of
the hands of the government by paying the duty. I leave the question
whether rice can be brought here, pay a duty of 1½ cents per pound, be
landed, repacked, re-shipped, and carried to the United States at a
saving over our own tariff on the direct article.
I agree with the late consul that “this country has too good a thing in
the legitimate operation of the treaty to run any risks.” There is no
question that the treaty is largely to the advantage of this country,
and
[Page 531]
that the United States
will not realize equal advantages pecuniarily. This was foreseen by the
Secretary (then Senator) Sherman; yet the treaty was ratified and
confirmed. But, as matter of good faith, I am bound to say that every
citizen in this country is interested in preventing frauds, if for this
reason alone. The planter has the additional inducement of preventing
any such damaging competition with his own labor through the
manipulation of an alien product.
I call your attention, also, in this connection, to the statement of
Vice-Consul Hastings, as to the cost of landing, repacking, and
reshipping. He states that, in his opinion, sugar from any producing
country in the world can be landed in any port of the United States, duty paid, “much cheaper than such sugar could be
brought to these islands, and landed, repacked, and shipped from any
port or place on these islands” (except the three harbors and, perhaps,
the roadstead of Lahaina), “and landed in San Francisco, or any port in
the United States, duty free.” And he says: “From
the harbors mentioned, such sugars cannot be shipped without the fact
coming to the knowledge of this [consul’s] office.”
It is not sufficient, however, to quote from Mr. Hasting’s report; it
should be read in full. I believe it states the facts fairly, without
unjust suspicion or unsafe laxity.
Mr. H____ does not seem to suspect an army of thieves, against which
eternal vigilance is the price of honesty; but he modestly takes the
safe ground that, “should any refined sugars be landed on these islands,
I should at once take it for granted that fraud was intended on our
revenue.”
I do not know that I am called upon to comment on the communications of
the Hawaiian minister of foreign affairs, as I have nothing to say in
correction or contradiction.
My local experience may be of service to aid in one particular, i. e., the understanding of the difficulty (if
not practical impossibility) of landing and reshipping cargoes of rice
or sugar at any “remote harbor” of these islands—a difficulty which I
was unable to comprehend before making the circuit of the islands, and
observing the process of landing from the island steamers.
There are no “remote harbors”; there are only three harbors in the
kingdom, and only one of these (Honolulu) has wharves. There is not
another landing (in the strict sense) in the
kingdom—meaning by that, a place where vessels may touch the shore
without going to pieces. “Landing” usually means, however, any place
where it is possible to communicate with the shore.
Having made the circuit of the islands in the “Likelike,” the subject of
landing and shipping cargo may be of sufficient interest to justify a
description of the mode of handling cargo at some points.
Leaving Honolulu for the circuit, there is no other landing on Oahu; it
is dangerous to approach the shore. A fine English ship, the “Esk-bank,”
was lost here recently in broad daylight, with a fair wind, by coming
too near the shore.
The next island is Molokai, a very dangerous coast, where the regular
coasters do not stop. It is possible at times to stop at the lesser
settlement, and one or two other points, but there are no regular
landings. The Harriet N. Carleton was wrecked on this island, and it was
23 miles to the nearest point where communication could be effected and
her passengers and crew got off.
Lanai, only open roadsteads; landing
difficult.
Maui, one of the richest islands of the group, has
only one harbor—Kahulũi—and that for vessels of
not over 300 tons. But there are several
[Page 532]
good roadsteads. Lahaina is almost equal to a
harbor and is one of the ports of entry. Our whalers used to put in
there, and it was the capital. At the leeward landings vessels anchor
usually with safety from half a mile to one mile out, and communicate
with the shore by means of boats. Hawaii, on the windward side, the
landings are all bad and dangerous up to Kilo,
described in the list as “Hilo Bay—good harbor.” Being a “good harbor,”
I wish to describe it.
Its mouth is open to windward and the trades blow straight into its
throat. Vessels have to anchor from half a mile to a mile from the
shore, and the only way to land cargo is by lading boats which dance up
and down the side of the vessel in the waves ceaselessly. The boats are
then pulled to shore through heavy rolling waves, but” little better
than the open sea. There is a small warehouse on piles, something like
the floating “wharf-boat” of a western river in appearance. It has steps
leading down to and under the water, where the landings are made. The
boat is never still an instant; it constantly rises and falls with the
waves, one moment six or eight steps deep, the next plunging forward,
and only held by the boat-hooks as it rears up six or eight steps high.
The only time either person or cargo can land safely is the instant the
boat is at the highest point. Persons jumping out at any other point in
the ascent or descent would be liable to be soused by the next wave
before they could escape, as happened to a party under my observation.
If the boat comes too near, it is liable to be drifted against the side
of the steps, where the first retiring wave leaves it to gracefully
capsize upon the incline of the steps, unless it is caught in time by
the reflux wave. Every pound of freight taken on or off at Hilo, I was
told, has to be handled in this way. This is put down as a “good
harbor.”
Kawaiháe, although an open roadstead, has the
advantage of being behind and to leeward of the north point of Hawaii,
and when the wind is “right” is considered a good landing. The wind was
right the day the “Likelike” anchored half a mile off shore to take on
freight during the passage before mentioned. Some boat-loads of supplies
were sent ashore covered with heavy tarpaulin or other water-proofs. The
difficulties from the ceaseless motion of the ship and the boats are the
same at all these landings, except that I am describing only the best of
them. There were forty or fifty head of cattle, live freight, to be
taken on here. The process was as follows:
The cattle were dragged, one at a time, to the boats in the water by
lassoes. The head of the struggling beast was then hauled up till one
horn lay over the gunwale, where it was fastened firmly. In this way
each boat brought off six cattle at a trip, three on each side. Although
the noses of the bullocks were hauled up to the gunwale in this way,
they would be half drowned as the boat pulled off to the steamer.
The pull occupied a laborious fifteen or twenty minutes. The bullocks
were hauled up the side of the steamer by having a girthing passed under
the belly, which was then rigged to a pulley worked by steam.
The whole force of the “Likelike” was employed in getting these cattle
aboard. In order to save hands and hasten the work, one boat was rigged
to the windlass of the anchor by a mile or so of rope, worked by steam,
and this supplementary boat made trips at the pace of hauling up anchor
in this way, with only one man in the stern to steer and one in the bow
as guard. Yet, with all these expedients, it took over three hours to
take on those cattle by these expert men, with steam to help them, at
one of the best roadsteads in the islands. I have described the process
at the risk of being tedious, because I do not believe, from my own
experience, that any stranger can understand the difficulties of
[Page 533]
shifting cargo, even at the
best landings on these islands, without a minute description.
As to the second-rate landings, it is not uncommon for the regular
packets to carry freight the round trip two or three times over before
finding an opportunity to land it. Mr. Atherton, of Castle & Cooke,
told me about two months ago that their house had then schooners which
had been six weeks trying to take on cargoes at some of their
plantations. Mr. Atherton had no knowledge of this present inquiry, and
the remark was entirely disconnected from the subject. A fortnight ago
Mr. Hutchinson, a planter, was very desirous to land at one of these
second-rate landings. The officers of the vessel declined to land him,
because “the wind was not right.” Being a determined man, he demanded a
crew and attempted to land. The boat was “stove in,” two of the crew
were killed, one injured, and Mr. Hutchinson was so seriously injured
that he has since died. This was in fair average weather, except that
“the wind was not right” for that landing. It may serve as a fair
specimen of what might be accomplished in the way of landing and
reshipping a cargo of sugar at any “remote” landing-place on these
islands.
I surely do not wish to undervalue any danger to the United States
revenue, nor to see any relaxation in the vigilance of our officers; but
it seems to me that when the difficulty of landing cargoes Anywhere
else, except at the entry ports of the kingdom, makes it easy to collect
a tariff of $3 a pound on opium here, while other restrictions put up
the price of “honest” opium to $16 and $30 per pound, it ought to be
easy comparatively to prevent the evasion of a duty of 2½ cents per
pound on rice or sugar, by an expensive process of concealment,
repacking, and reshipping to the United States, with adverse eyes behind
every cane-field in the kingdom, to spy out and detect such evasion of
duty.
I have, &c.,
[Inclosure 1 in No. 75.]
Mr. Comly to
Mr. Kapena.
Legation of the United States,
Honolulu, May 15, 1879.
No. 154, H. F. O.]
Sir: It is brought to my notice that
certain allegations are made as to frauds and contemplated frauds
upon the revenue of the United States, by the importation of sugar
and rice from the Sandwich Islands that were brought there from
other countries and repacked and sent forward
with certificates that they were the products of those islands. It
is alleged that a large sum of money had been subscribed by
proprietors and business men in the Sandwich Islands, to which it
was believed was to be added a further large sum to be contributed
by interested parties in San Francisco, all to be paid, provided a
reciprocity treaty was made and ratified; that the treaty was
procured by fraudulent misrepresentations; that one of the parties
who had a prominent interest in securing this treaty has purchased a
large tract of unoccupied lands in one of the distant islands that
contains a fine harbor, a quiet place of refuge, where he can order
cargoes of rice and sugar from various parts of the Pacific Ocean to
be there landed and repacked and sent up by coasting vessels to
Honolulu, and other ports of export, to be shipped thence to the
United States as the growth and product of the Sandwich Islands;
that through these fraudulent manipulations, duty-paying sugar and
rice, evading and defrauding the customs, can be landed in the ports
of our Atlantic coast from the Sandwich
Islands at an expense of about half a cent per pound against a
saving in duties of about two and a half cents; that brokers were
offering in New York and Boston cargoes of sugars to be delivered
from the Sandwich Islands by authority of parties in San
Francisco.
Without doubt, your excellency will clearly see the necessity I am
under of promptly communicating information so injurious in its
bearing upon the treaty, and so threatening
[Page 534]
in its aspect towards the customs revenue of
the United States and the home producer, already sufficiently
weighted by competition with the Hawaiian rice and sugar.
I await your excellency’s prompt and earnest consideration of these
matters, renewing the assurances of my high respect and esteem.
I am, &c.,
[Inclosure 2 in No. 75.]
Mr. Jarrett to
Mr. Comly.
Sir: I am directed by his excellency, the
minister of foreign affairs, to acknowledge the receipt of your
dispatch No. 154 of date 15th instant, stating, “It is brought to my
[your] notice that certain allegations are made as to frauds and
contemplated frauds upon the revenue of the United States, by the
importation of sugar and rice from the Sandwich Islands, that were
brought there from other countries and repacked, and sent forward
with certificates that they were the products of those islands; with
other grave matters as contained in your now acknowledged
communication, tending, if substantiated by facts, to destroy the
integrity of our reciprocity treaty with the United States.
I am further instructed to say, that after due inquiry into the
allegations as made to your excellency, an early and full response
will be given to your said pre-cited letter.
With the highest respect and most distinguished consideration,
I have, &c.,
WILLIAM JARRETT,
Secretary
Department of Foreign Affairs.
[Inclosure 3 in No. 75.]
Mr. Kapena to
Mr. Comly.
Department of Foreign Affairs,
Honolulu, May 21, 1879.
Sir: I have the honor to acknowledge the
receipt of your dispatch No. 154 under date of the 15th of the
present month. In this dispatch you state “it has been brought to
your notice that certain allegations are made as to frauds and
contemplated frauds upon the revenue of the United States, by the
importation of sugar and rice from this country that were brought
here from other countries and repacked, and sent forward with
certificates that they were the product of these islands.”
You will permit me, Mr. Minister, to say, that it is very difficult
to meet allegations which are somewhat vague, and, for aught which I
know, anonymous; it would, therefore, be possible for me to make my
reply much more satisfactory to you if I could know who makes these
allegations, “and what instances are given of such baseness.
I need not say to you, Mr. Minister, that it is for the interest of
every business man in this country to watch narrowly and see that no
such thing as that indicated by your dispatch should be done; nor
need I remind you that the men engaged in the production of sugar
and rice are of great ability and untiring energy, and that their
influence is so extended here that they are present in every
business and social circle. If three people are assembled by chance,
two must be interested in the production of these articles, so that
it is quite impossible that anything should be done, which may have
any bearing on their interests, and go undetected.
Now, what can be more improbable than that our planters should stand
by and see any frauds committed on the revenues of the United States
which would endanger their present relations with that country, and
likewise enable other people to bring their sugars or their rice
into competition with the products of our own labor in the market of
the United States? The mere statement of the thing carries its
refutation on the face of it; but, however that may be, Mr.
Minister, I assure you that at any time whensoever any suspicious
circumstances shall be brought to the notice of any of the officials
of the United States in this country, on the smallest hint from such
officials, the utmost power of this country shall be used for the
examination of such an offense, and it will be punished with the
utmost rigor of the law. In the mean time, I beg to assure you that
any allegation that there has been any sugar or rice exported from
this country to any ports of the United States, being the product of
any other country than this, is utterly without foundation.
[Page 535]
In the second paragraph of the dispatch you say: “It is alleged that
a large sum of money was subscribed by proprietors and business men
in the Sandwich Islands, to which, it was believed, was to be added
a further large sum to be contributed by interested parties in San
Francisco, all to be paid provided a reciprocity treaty was made and
ratified, and that the treaty was procured by fraudulent
misrepresentations.”
Now, my dear Mr. Minister, I have to say that this is only an old
story revamped. To say that it was believed that a further sum was
to be added in San Francisco, suggests immediately the question, Who
believed it, and on what ground was it so believed? There was never
one dollar expended for the procurement of the present treaty with
the United States otherwise than the payment of our legitimate
expenses. Never one cent paid to influence a vote on the treaty; and
so far from any assistance in San Francisco being rendered, we had
from the first reason to complain that our business friends did not
take a sufficient interest; and as for misrepresentations of any
kind made to Senators or Representatives in Congress, or made by
Senators or Representatives who favored the measure on the floor of
Congress, it has been frequently challenged to produce such
misrepresentations, and the challenge has as frequently come back
unanswered.
To proceed, you say that “it is said that one of the parties who had
a prominent interest in securing this treaty has purchased a large
tract of unoccupied lands in one of the distant islands, that
contains a fine harbor, a quiet place of refuge, where he can order
cargoes of rice and sugar from various parts of the Pacific Ocean,
to be there landed and repacked, and sent up by coasting vessels to
Honolulu and other ports of export, to be snipped thence to the
United States as the growth and product of the Sandwich Islands;
that through these fraudulent manipulations, duty-paying sugar and
rice, evading and defrauding the customs, can be landed in the ports
of our Atlantic coast from the Sandwich Islands, at an expense of
about half a cent per pound., against a saving in duties of about
two and a half cents; that brokers were offering in New York and
Boston cargoes of sugar to be delivered from the Sandwich Islands,
by the authority of parties in San Francisco.”
I cannot but think that this refers to the purchase made by Mr. Claus
Spreckels, and take occasion to say, in starting, that, as far as I
know, Mr. Spreckels was not considered as favoring the treaty, at
least until after its passage became pretty well assured. We may
have been mistaken in our view, but we certainly looked upon him
with uncertainty as to whether he was a lukewarm friend of the
measure or deemed it hostile to his interest. But, regarding his
purchase, I could wish your excellency would accompany me to Maui to
look at it, and you would find that it is not on a remote island,
but in the midst of a large population and involves large
expenditures of money, so that Mr. Spreckels becomes interested in
the preservation of the absolute integrity of the treaty, and
whether he is or not, the harbor of Kahului, which is the harbor
adjacent to his estate, is not within his property, but, on the
contrary, is the most public of public places, from which on all
sides the ground rises to the mighty dome of Haleakata, so that it
is overlooked for many miles, and every action can be observed by
every plantation in the district, and that it is quite impossible
that any cargo could be landed from any vessel without being
observed by those interested, and since this treaty went into
operation no vessel has arrived there from any foreign port other
than ports of the United States; and, further, the harbor is the one
used by all the planters in that region of country for the
deportation of their sugar and the reception of their supplies. A
glance at the place, Mr. Minister, will convince you that the
representations which you say have been made were either maliciously
or basely false or the result of thorough ignorance.
To the remark that brokers were offering in New York and Boston
cargoes of sugar to be delivered from the Sandwich Islands, by the
authority of parties in San Francisco, I have to say, that if by
that is meant Sandwich Island grown sugars, it is not impossible,
although, inasmuch as the prices ruling in New York and Boston are
so much lower than those ruling on the Pacific coast, it is so
improbable that I shall have no hesitation in saying that it is
quite untrue; but if it is meant to say that any one offers to
deliver cargoes of sugar, or is contemplating to deliver any sugar
other than that grown in this country, I have no hesitation in
saying that it is an unqualified falsehood, and I would challenge
any man to mention the name of any broker in either New York or
Boston offering to contract for the delivery of any sugars from
these islands.
You say, Mr. Minister, that without doubt I will clearly see the
necessity you were under of promptly communicating information so
injurious in its bearing upon the treaty, and so threatening in its
aspect toward the customs revenue of the United States, and the home
producer, already sufficiently weighted by competition with Hawaiian
rice and sugar.
I thank you, Mr. Minister, for your communication, and hope that you
will think it expedient to make the information more particular with
regard to persons from whom it emanates, and facts and circumstances
which they may give, to the end that we may subject it to the most
rigid, and, if you shall think expedient, public examination;
[Page 536]
and this I do with full
confidence that such an examination will show the Titter
groundlessness of the allegations.
Renewing the assurances of my highes trespect and most distinguished
consideration,
I have, &c.,
[Inclosure 4 in No. 75.—Supplementary
dispatch.]
Mr. Kapena to
Mr. Comly.
Department of Foreign Affairs,
Honolulu, May 21, 1879.
Sir: Referring your excellency to my
dispatch forwarded this day, to which I intend this as a supplement,
I have the honor to inclose a letter and statement from the
collector-general of customs. By them you will find that all the
sugar imported into this country since October, 1876, amounts to
213,072 pounds, of which 22,000 pounds were imported from Germany,
and the remainder, 191,072 pounds, from the United States, and is
the product of their refineries. You know that the course of
business with us at present is to make no refined sugar, as it is
not worth while for any of us to make refined sugar for our own
limited market, and, therefore, all our supplies of that kind come
from abroad, and you see how small a supply it is; and yet I
apprehend that it will not be a disagreeable fact to you to learn
that so large a portion of it comes from the United States.
You will see that there has been only 180 pounds of unrefined sugar
brought into the country in two years, and a half, and that was from
China, surplus stores of ships bringing emigrants.
You will further see that no vessel has carried any cargo from
Kahului, the port in Maui referred as being near to Mr. Spreckel’s
estate. I do not refer to this as being a point of importance,
except so far as it shows that any statements that sugars have been
shipped from that port are not true. Inasmuch as the region of which
Kahului is the port is one of our chief sugar-producing regions, it
is as likely to go from there as from anywhere in the future.
I think it worth while to remind you that there are no what may be
called private harbors in this country, by which I mean that there
are no remote harbors which can serve as shelter for illegal
transactions. The landings for the most part, outside of the ports
of public entry, though affording sufficient facilities for the
taking off of cargo, would make the landing of any cargo most risky
and laborious. And there is a great difference between a place
sufficiently convenient for the landing of supplies necessary for a
planter and one commodious enough for the taking on and off of
cargoes intended to defraud the revenues of the United States, which
must be of considerable quantities to make it remunerative; and I
would likewise submit to your consideration whether’ a shrewd man of
business would be likely to submit himself to the risk of exposure
and forfeiture of cargo, and whether any man of sound sense would
imagine for a moment that he can rely upon the silence of the large
number of men that would be cognizant of the transaction, in view of
the immense rewards which exposure of it would bring to the
informer.
I likewise inclose you an abstract of the rice imported into this
country. This I do because I do not wish that there should be the
slightest appearance of any concealment. The rice is imported for
the consumption of our own laborers; and you will see how small a
quantity it is, and it is steadily decreasing, whereas, if it be the
means of fraud upon your country, it would be increasing. In the
year 1877 the amount was 928,905 pounds. Our rice-planters were not
in so extensive a form at that time, and orders had necessarily gone
forward for rice wherewith to feed our own men. In 1879 the
importation into this country of all foreign rice whatsoever fell
off to 541,020 pounds, and so tar in the present year the amount
imported is 378,994 pounds.
It is all inferior rice, of even a different species from ours, and
cannot possibly be mistaken for Hawaiian rice. One million
seventy-six thousand seven hundred and seventy-three pounds of it
were brought from Japan, and pays a duty in this country of one and
a half cents per pound, and not one pound of it has ever been
re-exported from this country. I think your excellency will see that
the amount is so small itself, and more especially when you consider
the number of hands in which it is, and that they are all, with the
single exception of Mr. Waterhouse, consumers of the article, being
agents for sugar plantations, as to justify the assertion that it is
impossible that it should be imported for fraudulent
purposes—impossible, because so very unremunerative, more especially
when, as I have said above, it is taken into consideration that the
duty in this country would be added to the first cost, freight
hither, landing, storage, and repacking, certainly the margin on so
small a quantity of rice would not
[Page 537]
justify the risk of exposure. You see that Mr.
Waterhouse’s purchase was only 10,000 pounds.
With my highest and most distinguished consideration,
I have, &c.,
JOHN M. KAPENA,
H. H. M. Minister
for Foreign Affairs.
[Exhibit with inclosure No.
4.]
The Collector-General
to Mr. Kapena.
Collector-General’s Office,
Honolulu, H. I., May 22, 1879.
Sir: I have the honor to acknowledge
receipt of your excellency’s communication of the 19th ultimo, in
regard to the importation of rice and sugar. There has been no
unrefined sugar imported since the treaty went into effect, except
one small lot of 180 pounds from China.
There has been no sugar or rice imported into any of the other ports,
except a little refined at Hilo, from San Francisco. The only
vessels sailing from any other ports carrying cargo were from Hilo,
as follows, viz:
April 27, 1878, Mary Swan, San Francisco, with 180,540 pounds
sugar.
November 18, 1878, Bonanza, for San Francisco, with 49,945 pounds
sugar, molasses, and bananas.
January 11, 1879, Timandra, for San Francisco, with 231,226 pounds
sugar, molasses, and bananas.
In April the schooner Dashing Wave sailed from Hilo with a cargo of
sugar, the particulars not received.
No rice has been shipped from any port other than Honolulu.
Referring your excellency to the two accompanying statements, I have,
&c.,
W. F. ALLEN,
Collector-General.
Statement of sugars imported at Honolulu from
October, 1876, to May 19,
1879.
[Copy of exhibit to accompany letter of
Collector-General Allen.]
| Years. |
By whom. |
From— |
Quantity. |
Value. |
| 1876 |
Hackfeld & Co |
Germany |
10,000 pounds. |
$655 78 |
|
H. May |
} |
United States |
15,494 pounds. |
1,308 78 |
|
H. McIntyre |
|
G. C. McLean |
| 1877 |
The Grocers |
Germany |
47,009 pounds. |
4,706 56 |
| 1878 |
Hackfeld & Co |
do |
12,000 pounds. |
967 55 |
|
The Grocers |
United States |
{ |
98.114 pounds |
} |
10,853 18 |
|
26 barrels |
|
40½ barrels |
| 1879 |
The Grocers |
} |
do |
30,455 pounds |
2,597 85 |
|
Hackfeld & co |
All of this sugar was refined; mostly white sugar; some coffee
sugar.
W. F. ALLEN,
Collector-General.
Collector-General’s
Office, May 22, 1879.
[Page 538]
Statement of rice imported at Honolulu from
October, 1876, to May 19,
1879.
[Copy of exhibit to accompany the letter of
Collector-General Allen.]
| Year. |
By
whom. |
From— |
Quantity. |
Value. |
|
|
|
Pounds. |
|
| 1876 |
Chulan & Co |
China |
34,500 |
$870 00 |
| 1877 |
J. T. Waterhouse |
do |
40,000 |
1,060 00 |
|
Castle & Cooke |
do |
10,000 |
300 00 |
|
do |
Japan |
120,000 |
3,600 00 |
|
F. T. Lenehan & Co |
China |
12,200 |
393 50 |
|
Th. H. Davies |
British Possessions |
117,376 |
3,062 63 |
|
Afong & Achuck |
do |
224,060 |
5,676 64 |
|
do |
Japan |
189,968 |
4,524 45 |
|
H. Hackfeld & Co |
Dutch Possessions |
108,362 |
2,889 18 |
|
W. G. Irwin & Co |
China |
3,600 |
111 00 |
|
C. Brewer & Co |
Japan |
103,240 |
3,257 20 |
| 1878 |
Surplus stores vessels bringing
Chinese passengers. |
China |
32,655 |
1,187 40 |
|
H. Hackfeld & Co |
Japan |
200,965 |
5,734 65 |
|
T. H. Davies |
British Possessions |
44,800 |
1,317 66 |
|
C. Afong |
Japan |
100,000 |
2,400 00 |
|
J. T. Waterhouse |
do |
10,000 |
410 00 |
|
Castle & Cooke |
do |
42,600 |
1,746 60 |
|
W. G. Irwin & Co |
do |
110,000 |
3,025 00 |
| 1879 |
Chulan & Co |
China |
58,144 |
1,047 10 |
|
J. T. Waterhouse |
Japan |
200,000 |
8,000 00 |
|
On Ching |
China |
111,370 |
922 50 |
|
Surplus stores |
do |
9,480 |
314
90 |
|
|
|
1,883,320 |
51,850
41 |
The total amount is 1,883,329 pounds, valued at $51,850.41, produced
as follows, viz: Japan, 1,076,773 pounds; British Possessions,
386,236 pounds; China, 311,949 pounds; Dutch Possessions, 108,362
pounds,=1,883,320 pounds.
None of this rice could possibly be mistaken for Hawaiian rice, and
none of it has been shipped out of this kingdom.
W. F. ALLEN,
Collector-General.
Collector-General’s
Office, May 22, 1879.
[Inclosure 5 in No. 75.]
Mr. Kapena to
Mr. Comly.
[Private and
unofficial.]
Department of Foreign Affairs,
Honolulu, May 21, 1879.
My Dear General: In your dispatch of the
15th instant you make a remark to the effect that your home
producers were overweighted by competition with the Hawaiian
producer.
In my public dispatch I have taken no notice of that remark, but
trust at some future time, perhaps, I may be able to remove that
impression from your own mind, if, indeed, upon reflection, you
shall find that it has effected a lodgement there. I think I shall
be able to show you that the production of rice in the Southeastern
States has so fallen off as not to be able to supply the Eastern
demand, and that the imports into the Pacific ports of the United
States of Asiatic rice are so immense, that the product from the
Atlantic States forms so inconsiderable an item that ours cannot be
said to compete at all with the South Carolina and Georgia rice.
With regard to sugar this remark would apply very largely; but more
especially I would call attention to the fact that supply of any
particular article follows largely the course of business. I mean by
that, that when there is no direct trade—as, for instance, there is
none from New Orleans to San Francisco—it is impracticable to buy in
the New Orleans market for the San Francisco market, and the oftener
that an article passes through the hands of middle-men the more
expensive it gets to the consumer; thus, if the New Orleans man
ships to Boston or New York, his sugar is handled and stored there
and then purchased by an agent of a San Francisco man, who pays
transportation again by sea or land. Such a transaction does not
follow the legitimate course of exchange of commodities. Hence, it
is very difficult to change the customs general to traffic. The
buyer buys of him who, in return, buys something from him, and it is
difficult to establish new relations of business. I think I shall be
able to show you
[Page 539]
that even
though our sugar was not at all in the market on the Pacific coast,
the Louisiana sugar would not be a competitor to that of Peru,
Mauritius, or Manila.
I am conscious of not makiug myself very clear at present; but, as my
main object is to make an impression upon your own mind personally,
perhaps it will be sufficient if I should succeed in directing your
thoughts and inquiries more especially to the subject.
I remain, my dear general, yours, very truly and respectfully,
[Inclosure 6 in No. 75.]
Mr. Comly to
Mr. Kapena.
Legation of the United States,
Honolulu, May 31, 1879.
Your Excellency: I have the honor to
acknowledge the receipt of dispatch, and your supplementary dispatch
with inclosures, and your note, “private and unofficial,” all under
date of May 21.
I have delayed this note, hoping to include further information; but
as it is already ten days since your dispatches were written, I will
no longer delay.
I beg your excellency will accept my acknowledgments for the
promptness and comprehensiveness of your reply, which I hold under
further consideration. Your excellency’s private and unofficial note
contains matter of a very suggestive character for reflection, and
which seems to me of sufficient interest to be included in the
official consideration of the subject. You will observe, however,
that your excellency has somewhat enlarged the scope of my
observations which speak of the native (American) producer as
“already sufficiently weighted,” not overweighted, by Hawaiian competition.
Renewing, &c., I remain &c.,
[Inclosure 7 in No. 75.]
Mr. Comly to
Mr. Vice-Consul Hastings.
Legation of the United States,
Honolulu, May 28, 1879.
No. 260.]
Sir: The Secretary of the Treasury has
information alleging frauds and contemplated frauds upon the revenue
by the repacking of foreign rice and sugar at these islands, and
their importation into the United States as the product of these
islands, thus evading the duty.
This information (this letter as well) is confidential, and I will
ask you to hold it strictly so. Meantime it enters largely into your
province to be informed of such frauds and contemplated frauds, if
there be any such, and to use your best skill in uncovering and
preventing them. Relying upon your faithfulness and skill in the
matter, I have the honor to ask your assistance in the discovery of
the facts of the case, and reporting them to me at the earliest
practicable time, in order that I may comply with certain
instructions directed to me with reference to these alleged
frauds.
- 1.
- Do you know of any frauds or contemplated frauds upon the
revenue of the United States, through which sugars and rice
produced in other countries are brought to the Hawaiian Islands,
repacked, and subsequently shipped to the United States for free
entry under the provisions of the treaty?
- 2.
- Please state what facilities you know of for the prosecution
of such a scheme of fraud; whether there are not remote harbors
on the islands affording facilities for transshipment and
repacking of cargoes without risk of discovery, and whether
there are not opportunities and temptations to provoke parties
to the prosecution of such illegal traffic.
- 3.
- State what facilities are within your control for the
discovery and prevention of such fraudulent shipments.
- 4.
- In your judgment what would be the attitude of the authorities
and people of these islands toward any such breach of the
treaty, and what opportunities for connivance and assistance
would the case present?
- 5.
- State whether there are or are not peculiarities
characteristic of Hawaiian rice
[Page 540]
and sugar, such as would enable an expert
to detect attempts to import the product of other countries as
Sandwich Island rice or sugar.
- 6.
- Such other information as you may have bearing on the
question.
I would be glad to have an answer as early as practicable.
Very respectfully,
[Inclosure 8 in No. 75.]
Mr. Hastings to
Mr. Comly.
Consulate of the United States,
Honolulu, H. I., May 30, 1879.
Sir: I have the honor to acknowledge the
receipt of your letter of the 28th instant, informing me
confidentially that information had been received by the Secretary
of the Treasury of alleged and contemplated frauds upon the revenue
of the United States, by the repacking of foreign rice and sugars at
these islands, and their importation into the United States as the
product of these islands, thus evading the duty.” Requesting such
assistance as I may be able to render in the discovery of the facts
in the case, you submit the following questions, viz:
[Recites all of my questions in full. Vide
inclosure No. 7, preceding this.]
In reply I have the honor to state:
1. That I do not know of any frauds, either actual or contemplated,
upon our revenues by the repacking of rice and sugar not the product
of these islands at this port or any of the ports of these islands,
for export to the United States for free entry under the provisions
of the treaty of reciprocity, nor have I ever known or had any cause
to suspect, during a residence of nearly two years at this port,
that either rice, sugar, or any of the articles named in the
schedule of Article II of the treaty were being brought to these
islands for any such purpose. Had any such transactions been
discovered or suspected, it would have been the duty of this office
to at once [have] brought the matter to the attention of the
collector of the port to which such goods were destined, and to have
sent full information in regard to such intended fraud to the
Secretary of the Treasury at Washington.
2. In my judgement there are no facilities whatever for the carrying
out of such a scheme of fraud. In the first place, Honolulu is the
only harbor of the islands that affords any conveniences for
reshipment. Kahulũi, the port for Wailuku, and Hilo are very good
harbors, but with no wharves or conveniences for landing goods;
besides, they are not at all remote, but are the harbors of two of
the largest ports of the island outside of Honolulu.
At all the parts of the islands, except Honolulu, freight of all
kinds is landed in boats from the schooners and steamers in the
interisland carrying trade, and the loading of freight is done in a
like manner, and at many of the landings at some risk. I do not
think a vessel could be chartered to land a cargo at any port or
place on the islands, except the three harbors hereinbefore
mentioned, and possibly Lahaina, an open roadstead, on the leeward
side of Maui.
If such a charter was made, it would be at a very high rate per ton.
The cost of landing, repacking, and reloading sugar so landed would
be at the lowest calculation one cent per pound, not including
damage by sea-water, which is quite a risk. It is my opinion,
therefore, sugar from China, Philippine Islands, Mauritius, or any
sugar-producing country in the world, could be landed in San
Francisco or any port of the United States, Atlantic or Pacific, duty paid, much cheaper than such foreign
sugars could be brought to these islands and landed, and repacked,
and shipped from any port or place on these islands, except at the
harbors mentioned, and landed in San Francisco or any port of the
United States duty free. From the harbors
mentioned such sugar cannot be shipped without the fact coming to
the knowledge of this office.
3. I am cognizant of all sugars and rice taken out of bond in the
United States and landed here, through landing certificates which
have to be presented at this office for verification, and by the
publication in the papers here of the manifests of the cargoes coming from all countries to these
islands.
All importations to these islands, excepting now and then a cargo of
lumber, coal, or machinery landed at Hilo, Lahaina, Kahulũi, are
entered at this port.
I do not think it possible that a cargo of any kind could be landed
or transshipped from one vessel to another, at any port or place on
these islands, without the fact coming to the knowledge of this
office. News is weekly received from all parts of the group. Should
any unrefined sugar be landed on these islands, I should at once
take it for granted that fraud was intended on our revenue.
4. The merchant, the planter, and I may say the whole people of these
islands, having a pecuniary interest in the continuance of a treaty
so much in their favor, and the fact that any fraud committed under
it would be sufficient cause for its abrogation,
[Page 541]
makes the customs officials and all
interested in its continuance ever on the alert to see that no fraud
is committed.
On one or two occasions the customs officials here hare informed me
of the landing of Chinese and Japanese rice from Hong-Kong, and have
acted in concert with me to see that no attempt was made to
re-export it as Hawaiian produce. There are Hawaiian customs
officials stationed at the ports of Lahaina and Kahulũi on the
island of Maui, Koloa on the island of Kauai, and at Hilo, Kawaihæ,
and Kealakekúa, on the island of Hawaii.
5. The bulk of the rice imported into this kingdom is from Japan,
having been purchased in bond at San Francisco. This rice costs in
bond at San Francisco from 3 to 3½ cents per pound, and can be laid
down here, duty paid, for about 4 cents per pound. It sold here for
4½ cents per pound. It is used to feed Chinese servants and laborers
on the plantations in the various parts of the islands and here in
Honolulu. Hawaiian rice brings from 5½ to 7 cents per pound,
according to quality, laid down in San Francisco. It is, therefore,
very easy to be seen why foreign rice is imported into this, a
rice-producing country.
In regard to the peculiar characteristics of Hawaiian rice, an
unpracticed eye can at once detect the difference between Chinese,
Japanese, and Hawaiian rice. The grain of the Chinese rice is long
and slender, the Japanese short and quite full, while the grain of
the Hawaiian is rather flat in appearance, a medium between the
Chinese and Japanese in length, and takes a better polish than
either of the other two. The dffierence in size and shape could
easily be detected at any of the ports of entry of the United
States.
The difference between Hawaiian and other sugars I am not able to
describe, but I am satisfied that no unrefined sugars have been
imported into these islands since the reciprocity treaty took
effect. All the refined sugars used on these islands are imported,
from San Francisco in bond, and the landing certificates for the
same are verified at this office.
6. About one year ago the attention of this office was directed to
this subject. It was then claimed that the increase in the
exportation of sugar from these islands, from the time the treaty
went into effect (September 9, 1876) up to that time (June, 1878),
was from ten to twenty-five million pounds, an increase of fifteen
million pounds in the two years, and it was assumed that this
increase in the exportation could not have been from the increase in
the production.
On looking over tables of domestic exports for the years mentioned I
fail to find any such increase, as the following table will
show:
Amount of sugar produced on these
islands and exported to the United States for the year ending
December 31.
|
Pounds. |
| 1875 |
23,762,744 |
| 1876 |
25,001,397 |
| 1877 |
25,506,478 |
| 1878 |
38,399,862 |
From the enlargements of old plantations and the opening of new ones
since the treaty took effect, it would not be a surprising fact if
the increase in the production of sugar, does not bring the amount
of export up to 50,000,000 pounds at the end of the next two
years.
The consular agent at Hilo, Hawaii, was instructed, under date of
July 27, 1878, to at once inform this office of any vessels touching
at that port, or any of the ports within his jurisdiction, having on
board unrefined sugar or rice not the product of these islands.
While I am of the opinion that it is impracticable to import foreign
sugars and rice into this kingdom and re-export them as Hawaiian
product, I shall preserve the same watchfulness as heretofore to
observe that such a scheme is not carried into practice.
I have, &c.,
F. P. HASTINGS,
United States
Vice-Consul.
[Inclosure 9 in No. 75.]
Descriptive list of all harbors, roadsteads,
anchorages, landings, and ports of entry in the Hawaiian
Islands.
island of kauai.
Nawilivili.—Bad landing; fair anchorage.
* Koloa.—Bad
landing; good anchorage.
[Page 542]
Waimea.—Bad landing; good anchorage.
Haualei.—Good landing; good anchorage.
island of molokai.
No landing, except for small schooners or steamers.
island of lauai.
Open roadstead, with anchorage for small vessels only.
island of maui.
* Lahaina.—Open
roadstead; good landing; good anchorage.
Makena.—Open roadstead; good landing; good anchorage.
Haua.—Open roadstead; good landing; good anchorage.
Maliko.—Open roadstead; good landing; good anchorage.
* Kahulũi.—Small
harbor for vessels not over 300 tons.
island of hawaii.
Kohala.—Open roadstead; bad ianding.
Hamakua Coast.—Open roadstead; bad landing.
* Hilo Bay.—Good
harbor.
Punaliui.—Open roadstead; good anchorage.
Kona Coast.—Open roadstead; good anchorage.
* Kealakekua.—Open
roadstead; but safe anchorage.
Kailúa.—Open roadstead; but safe anchorage.
* Kawaihae.—Open
roadstead; but safe anchorage.
Mahukona.—Open roadstead; but safe anchorage.
island of oahu.
No harbor on Oahu except Honolulu, There are several landings where
small steamers or schooners can go in and load—vessels drawing 5 or
6 feet.
