Mr. Comly to Mr. Evarts.
Honolulu , June 9, 1879. (Received June 26.)
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.
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.,