But I am persuaded that, as there are planters now who are prosperous and contented, and who make handsome returns even with the sugar duty against them, so, if that were removed, there would be planters who would continue their regular and slow march toward bankruptcy; and for whom the remitted duty would be but a temporary respite, while it would deprive them of a cheap and easy way to account for their failure. Wherever on the islands I found a planter living on his own plantation, managing it himself, and out of debt, I found him making money, even with low prices for his sugar, and even if the plantation itself was not favorably placed; not only this, but I found plantations yielding steady and sufficient profits, under judicious management, which in previous hands became bankrupt. But on the other hand, where I found a plantation heavily encumbered with debt and managed by a superintendent, the owner living elsewhere, I heard usually, though not always, complaints of hard times. If a sugar planter has his land and machinery heavily mortgaged at ten or twelve per cent interest; if he must, moreover, borrow money on his crop in the field to enable him to turn that into sugar; if then he sends the product to an agent in Honolulu, who charges him five per cent. for shipping it to San Francisco; and if in San Francisco another agent charges him five per cent. more, on the gross returns including freight and duty, for selling it; if besides all this the planter buys his supplies on credit, and is charged one per cent. a month on these, compounded every three months until it is paid, and pays almost as much freight on his sugar from the plantation to Honolulu as from there to its final market—it is highly probable that he will, in the course of time, fail.
There are not many legitimate enterprises in the world which would bear such charges and leave a profit to the manager. But it is on this system that the planting of sugar has been, to a large extent, carried on for years in the Islands. Under it a good deal of money has been made, but not by the planters. Nor is this essentially unjust. In the majority of cases, planters began rashly with small means, and had to borrow largely to complete their enterprises and get to work. The capitalist of course took a part of the profits as interest. But the capitalist was in many cases also the agent and store-keeper in Honolulu; and he shaved off percentages—all in the way of business—until the planter was really no more than the foreman of his agent and creditor. When, under such circumstances, a planter complained that he did not make the fortune he anticipated, and reasoned that therefore sugar planting in the Islands is unprofitable, he seemed to me to speak beside the question—for his agent and creditor, his employer in fact, made no complaint: he always made money; and as he had invested the money to carry on the enterprise, this was but the natural result.
The planters make a grave mistake in not acting together and advising together on their most important interests. There are so few of them that it should be easy to unite; and yet for lack of concerted action they suffer important abuses to go on. For instance, it is a serious loss to the planter that when he ships or engages a hand he must pay a large "advance," amounting usually to at least half a year's pay. This custom is hurtful to the laborer, who wastes it, and it inflicts a serious loss upon the planter. Suppose he employs a hundred men, and pays fifty dollars advance, he invests at once five thousand dollars for which he gets no interest, though if, as is probable, he borrowed it, he must pay one per cent. a month. This abuse could be abolished in a day by the simple announcement that no planter would hereafter pay more than ten dollars advance. But it has gone on for years, and the sum paid gets higher every year merely by the planters outbidding each other.
Again, it is possible to ship sugar from some of the Islands direct to San Francisco, and for but little more than is now paid for shipping it to Honolulu. Half a dozen planters on Hawaii or Maui, clubbing together, could easily get a ship or half a dozen ships to come for their sugar, and thus save five per cent. on their gross returns, now paid to agents. But this is not done, partly because so many planters are in need of money, which they borrow in Honolulu, with the understanding that they will submit their produce to the management of agents there.
Again, the planters err, I think, in not giving personal study to the question of a market for their sugar. They leave this to the agents to manage. No doubt these gentlemen are competent; but it is easy to see that their interests may be somewhat different from those of the planter. For instance, some years ago an arrangement was offered by the San Francisco sugar refineries by which these agreed to take two-thirds of the product of the plantations in crude sugar, to furnish bags to contain this product, and to pay cash for it in Honolulu. Under this system the planter was saved the heavy expense of sugar kegs, and the cost of two agencies of five per cent. each, besides getting cash in Honolulu, whereas now his sugar is usually sold at three months in San Francisco, and he probably loses six months' interest, reckoning from the time his sugar leaves the plantation. This arrangement, several planters told me, was profitable to them; but it was discontinued—it was not to the advantage of the agents; its discontinuance was no doubt a blunder for the planters. Moreover, the Australian market has been too long neglected; but the advantage of possessing two markets instead of one is too obvious to require statement.
It is a reasonable conclusion, from all the facts in the case, that sugar planting can be carried on at a fair and satisfactory profit in the Hawaiian Islands, wherever skill and careful personal attention are given, and due economy enforced by a planter who has at the same time sufficient capital to carry on the business. The example of Captain Makee and Mr. A.H. Spencer on Maui, of Mr. Isenberg on Kauai and others sufficiently prove this.
If I seem to have given more space to this sugar question than it appears to deserve at the hands of a passing traveler, it is because sugar enters largely into the politics of the Islands. It is the sugar interest which urges the offer of Pearl River to the United States in exchange for a treaty of reciprocity; and it is when sugar is low-priced at San Francisco that the small company of annexationists raises its voice, and sometimes threatens to raise its flag.
There is room on the different islands for about seventy-five or eighty more plantations on the scale now common; and there are, I think, still excellent opportunities for making plantations. The sugar lands unoccupied are not high-priced; and men skilled in this industry, and with sufficient capital, can do well there, and live in a delightful climate and among pleasant society, in a country where, as I have before said, life and property are more absolutely secure than anywhere else in the world. But I strongly advise every one to avoid debt. It has been the curse of the planters, even of those who have kept out of debt, for it has prevented such unity of action among them as must have before this enabled them to effect important improvements. For instance, were they out of debt there is no reason that I can see why they should not succeed in making their market in Honolulu, and drawing purchasers thither instead of sending their sugar to far-off markets at their own risk and expense. If ships can afford to sail in ballast to more distant islands for guano, calling at Honolulu on the way, it is reasonable to suppose they could afford to come thither for the more valuable sugar cargoes.
