No. 331.
Mr. Daggett to Mr. Frelinghuysen.
Honolulu, March 5, 1883. (Received March 29.)
Sir: Agreeably to your instructions embraced in dispatch No. 14, of December 13, 1882, I have the honor to report that I have made a careful examination of the representations made to your Department, to the effect that “Chinese sugar is taken to the Hawaiian Islands and exported thence to the United States as the product of those islands for [Page 553] the purpose of securing the advantages of our reciprocity treaty with Hawaii of 1875.”
My investigations have been directed to the establishment of definite conclusions in respect to three general inquiries, applying specifically to the twelve months ending December 31, 1882, and inferentially to previous years under the treaty as well as to the present, namely:
- 1.
- Would it have been reasonably possible to make such shipment and reshipment of Chinese sugars without detection?
- 2.
- Would it have been profitable to make such shipment and reshipment of Chinese sugars, an evasion of the payment of duty being the sole purpose and consideration?
- 3.
- Have such shipments and reshipments of Chinese sugars really been made?
In relation to the first inquiry I beg to state that but four vessels from Chinese ports were reported at the Hawaiian Islands during the year 1882, as shown by the following exhibit, courteously furnished by the collector-general, together with a statement of the commodities discharged by them:
| Vessels. | Port from. | Port of entry and date of arrival. |
| British steamship Triumph | Hong-Kong | Honolulu, July 11, 1882. |
| German bark Peiho | do | Honolulu, October 6, 1882. |
| British steamship Madras | do | Honolulu. November 2, 1882. |
| German bark Livingstone | do | Honolulu, November 24, 1882. |
From these vessels the following commodities only were discharged: Clothing, shoes, dry goods, earthen and china ware, medicines, matting, furniture, dried fish, preserved vegetables, fruits and provisions (no sugars), fancy goods, lacquered ware, bamboo ware, baskets, hardware, tools, China wines, samshoo, cigars, tobacco, tea, nut oil, paper and stationery, camphor-wood trunks, and pieces of stone.
It will thus be seen that but four vessels from Chinese ports reported to these islands in 1882, and that sugars were discharged by none of them. This statement embraces all the ports of the Hawaiian Islands. Hence if Chinese sugars were landed in any port of the islands in 1882 it must have been so done illicitly and without the knowledge of the customs authorities.
In relation to the possible clandestine landing of sugars, I beg to direct especial attention to the fact that there is but one port in the Hawaiian Islands where freights may be discharged without the aid of lighters. That port is Honolulu. There are seven other recognized ports where freights may be taken in and discharged with the aid of boats or lighters, namely, Hilo, on the island of Hawaii; Mahakona, on the island of Hawaii; Kawaihae, on the island of Hawaii; Keal-akekua, on the island of Hawaii; Kahului, on the island of Maui; Lahaina, on the island of Maui; and Kolea, on the island Kauai.
In addition to these ports are a number of small inlets in the island channels where freight may be taken in and discharged in small barges when the weather is favorable. These inlets are utilized to a considerable extent by planters in removing their sugars to island vessels for transportation to Honolulu and other ports for invoice and shipment to the United States. So difficult is it to make these landings, that freight can be removed to and from them only in daylight and when the channels are calm.
[Page 554]There are 81 sugar plantations on the islands, 54 of which mill their own cane, and 8 custom sugar mills. Of these plantations and mills 39 are on Hawaii, 21 on Maui 8 on Kauai, 8 on Oahu, and 3 on Molokai. Very few of these plantations are isolated. As a rule they are grouped in districts favorable to cane growings where a common port or inlet, at greater or less distance, serves them all.
As steamers and sailing vessels are constantly plying at short intervals between these sugar-producing islands and Honolulu and other-ports of shipment, and as no vessel large enough to be of service could enter any of these ports or inlets and in broad daylight take in or discharge in lighters or barges a cargo of sugar, or any considerable portion of it unobserved, it follows that the illicit landing of sugars undetected could be accomplished only through a widespread conspiracy of the planters, a presumption which I cannot ask you for a moment to entertain.
The second inquiry, “Would it have been profitable to make such shipment and reshipment of Chinese sugars, an evasion of the payment of duty being the sole purpose and consideration?” has already been? partially answered in referring to the difficulties of the undertaking; and in this connection permit me to add, (1) that the difference in the strength, granular structure, and general appearance of Chinese and Hawaiian raw sugars is so marked that the former could not be made to pass for the latter under competent and honest inspection without, at least, an equal mingling in quantity of each, and a regranulation of the combination; (2) that the mills necessary to this process are, possibly, with two or three exceptions, from 1 to 5 miles inland; and (3) that the laborers employed in the lightering, hauling and reworking of Chinese sugars could not be kept in ignorance of their character, and their silence would have to be purchased by increased wages or other considerations affecting the profits of the lawless business.
Were it possible, then, to land Chinese sugars undetected in Hawaiian ports in order to evade the light Hawaiian tax of 10 per cent, and our own duty of from 2 to 3 cents per pound, the expenses of handling and working, as follows, would have to be met:
- 1.
- Lighterage to the shore, probably at night and under unfavorable-circumstances.
- 2.
- Loading and transportation inland from 1 to 5 miles.
- 3.
- Mixing and working in with Hawaiian sugars.
- 4.
- Resacking, reloading, and retransportation to the shore.
- 5.
- Lighterage to the vessel.
The expenses of these services would vary somewhat at different ports and under different circumstances, but on the whole it would be under most favorable conditions that the profits would exceed the evaded duties.
In answer to the inquiry, “Have such shipments and reshipments of Chinese sugars really been made?” admitting them to have been both possible and capable of profit, I desire to call your attention to the important fact that the gross sugar product of the Hawaiian Islands in 1882 was not in excess of, but rather below, the estimated average yield of the acreage under sugar cultivation.
According to the latest exhibits, the total area of lands planted in cane on these islands is 39,000 acres. As cane matures here in about eighteen months, the number of acres cropped in 1882 may be placed at 26,000, which yielded a fraction over 57,000 tons of raw sugar, all of which, with the exception of less than 2 tons, was exported to the United States. The average yield per acre, it will thus be seen, was a [Page 555] little short of 22/10 tons, and that average on 26,000 acres, which is light for these islands, accounts for every pound of sugar produced and exported in 1882.
Again, for more than a year the United States consul here has exacted from shippers the procurement of separate invoices for the sugars of each plantation, and the exact places of product are stated under oath. So, if Chinese sugars have been shipped illicitly from these islands in 1882, every invoice naming them has borne a perjury upon its face.
It is manifest that no such shipment and treatment of Chinese sugars could be made without the knowledge of many; yet the charges I have been instructed to investigate have been neither repeated nor credited here.
It seems hardly necessary for me to say, in conclusion, that I cannot, believe that Chinese sugars have been in the past, or are now, brought to these islands and reshipped to the United States as the products of Hawaiian plantations.
Very respectfully, &c.,