Essay/Term paper: Prologue of history

Essay, term paper, research paper:  Economics

Prologue of History

Until statehood, Hawaii was ruled economically by a consortium of corporations
known as the "Big Five": C. Brewer and Co., sugar, ranching, and chemicals,
founded in 1826; Theo. H. Davies & Co., sugar, investments, insurance, and
transportation, founded in 1845; Amfac Inc. (originally H. Hackfield Inc.-a
German firm that changed its name and ownership during the anti-German sentiment
of WW I to American Factors), sugar, insurance, and land development, founded in
1849; Castle and Cooke Inc., (Dole) pineapple, food packing, and land
development, founded 1851; and Alexander and Baldwin Inc., shipping, sugar, and
pineapple, founded in 1895. This economic oligarchy ruled Hawaii with a velvet
glove and a steel grip. With members on all important corporate boards, they
controlled all major commerce, including banking, shipping, insurance, hotel
development, agriculture, utilities, and wholesale and retail merchandising.
Anyone trying to buck the system was ground to dust, finding it suddenly
impossible to do business in the islands. The Big Five were made up of the
islands' oldest and most well-established haole families; all included
bloodlines from Hawaii's own nobility and ali'i. They looked among themselves
for suitable husbands and wives, so breaking in from the outside even through
marriage was hardly possible. The only time they were successfully challenged
prior to statehood was when Sears, Roebuck and Co. opened a store on Oahu.
Closing ranks, the Big Five decreed that their steamships would not carry
Sears's freight. When Sears threatened to buy its own steamship line, the Big
Five relented. In the end, statehood, and more to the point, tourism, broke
their oligarchy. After 1960 too much money was at stake for Mainland-based
corporations to ignore. Eventually the grip of the Big Five was loosened, but
they are still enormously powerful and richer than ever, though these days they
don't control everything. Now their power is land. With only five other major
landholders, the Big Five control 65 percent of all the privately held land in
Hawaii.

Why was the 1946 Strike so important?

Before 1946, Hawaii's economy, politics and social structures were completely
dominated by a corporate elite known as the Big Five (Alexander & Baldwin,
American Factors, Castle & Cooke, C. Brewer, & Theo. Davies). The leaders of
these factor companies exercised absolute control over Hawaii's plantation
workers and the majority of the islands multi-ethnic workforce. The 1946 strike
forever changed the balance of power between workers and the plantations. No
longer would living and working conditions be set unilaterally by the plantation
owners or their parent corporations. Nor was the lesson lost on the workers
outside the plantation either. As sugar workers were now successful in
challenging the plantations, so too would all the other employers often
subsidiaries of one of the Big Five now be brought to the bargaining table to
improve their wages and working conditions.
The 1946 sugar strike was monumental both in terms of the numbers of people
involved and the issues at stake. Never before had all the sugar workers of
every ethnic group joined together in the same labor organization. Previous
efforts of the workers to organize had been easily smashed because of a lack of
worker solidarity across ethnic lines. Japanese workers belonged to their own
higher wage association just as the Filipino sugar workers had their own union.
Bitter lessons were learned from the unsuccessful 1909 and 1920 Japanese strikes
and the 1920, 1924 and 1937 Filipino labor movements which failed because of
ethnic unionism. The great strike of 1946 started with a new premise of
organizing workers of all races into a single labor union. Never again would
workers be divided and conquered because of ethnic antagonism. This strategy of
ethnic solidarity was successful but it was not easy. A concerted effort to
include the concerns and issues of all Hawai'i's workers, to communicate in
every language was necessary for the multi-ethnic union to succeed.

The legacy of the great Hawaiian sugar strike of 1946 is the success we can see
today of Hawai'i's multi-ethnic workforce to bridge ethnic differences and build
trust based on worker solidarity. Hawai'i's diverse workforce united in 1946 and
began for the first time to form a single working class culture, unique to
Hawai'i.

Like today, the issues of housing, medical care, pensions and wages were key
issues for the 1946 sugar workers. Previously the quality of housing, medical
care and old-age pensions depended upon the whim of individual plantations. The
1946 sugar strike negotiated new labor relations establishing these important
issues as contractual rights of workers, rather than as favors the plantations
could wield to force worker compliance. Thus, the 1946 sugar strike is an event
whose impact reaches beyond the sugar fields, into the lives of every worker in
Hawai'i.

Importantly, the role of the neighbor islands in the 1946 sugar strike was
tremendous. Concentrated, community-based organizing made these communities a
special place in the history of Hawai'is working people. The 1946 strike was the
first island-wide sugar strike, the first industry-wide shut-down in Hawai'i's
history. The strength of the 1946 sugar strike and the community organizing it
built upon was so solid on the neighbor islands, especially Kaua'i and Hawai'i,
that it soon became the bedrock of a new political order.

The active support and involvement of family and workers throughout Hawai'i,
made this strike a success. Appropriately, the history of the 1946 sugar strike
is the history of community organizing all members of the community including
wives and children. The success of the strike built upon the support of not just
workers, but workers families both relatives who had left the plantations and
children themselves only a few years from working for the plantations. The story
of the 1946 sugar strike includes soup kitchens, morale committees with talent
nights and dances, community garden, hunting and fishing parties, bumming
committees to solicit from stores and other supporters, baseball teams through
which organizers like Major Okada met and solicited new members.

The 1946 strike is recent enough that many adults have a recollection of the
events. But our young people and even many adults in their 20s and 30s have
neither memories, nor access to their history in regards to this important event
that changed the way workers and employers in Hawai'i interact not only sugar
workers, but all workers. The legacy of the 1946 sugar strike is larger than
sugar. Its legacy is the formation of a multiethnic community force working
together to address social and political problems. Community organizing not only
won the 1946 sugar strike, it also laid the foundation for political change
including the Democratic Revolution of 1954.

Alexander and Baldwin

History of (A&B)

Alexander & Baldwin, Inc. ("A&B") is a diversified corporation with most of its
operations centered in Hawaii. It was founded in 1870 and incorporated in 1900.
Ocean transportation operations and related shoreside operations of A&B are
conducted by a wholly-owned subsidiary, Matson Navigation Company, Inc.
("Matson"), and several Matson subsidiaries, all of which are headquartered in
San Francisco. Container leasing operations are conducted by a wholly-owned
subsidiary of Matson, Matson Leasing Company, Inc. ("Matson Leasing"), which is
headquartered in San Francisco. Real property and food products operations are
conducted by a wholly-owned subsidiary of A&B, A&B-Hawaii, Inc. ("ABHI"), and
several ABHI subsidiaries, including California and Hawaiian Sugar Company, Inc.
("C&H"), all of which are headquartered in Hawaii or California.

The industry segments of A&B are as follows:

A. Ocean Transportation - carrying freight primarily between various United
States Pacific Coast and Hawaii ports; providing terminal, stevedoring, tugboat
and container equipment maintenance services in certain of those ports; and
arranging United States Mainland intermodal transportation.

B. Container Leasing - leasing marine cargo containers in standard 20-foot
and 40-foot lengths to transportation companies, primarily ocean carriers in the
liner trades.

C. Property Development and Management - developing real property in Hawaii
and on the U.S. Mainland; selling residential properties; and managing, leasing,
selling and purchasing commercial and industrial properties.

D. Food Products - growing sugarcane and coffee in Hawaii; producing raw
sugar, molasses and green coffee; refining raw sugar, and marketing and
distributing refined sugar products in the western United States; marketing and
distributing roasted coffee and green coffee; providing sugar and molasses
hauling and storage, general freight and petroleum hauling and self-storage
services in Hawaii; and generating and selling electricity.

C. Brewer and Company

C brewer is the parent company of Mauna Loa Chocolates. And is also the parent
company of Hawaiian Isles Kona Coffee Co. The oldest of the former Big Five
companies, C. Brewer and Co., plans to relocate its corporate headquarters from
downtown Honolulu to Hilo. C. Brewer, one of the state's largest agricultural
companies, today said it plans to move its offices and 30 employees to a former
sugar mill on a 10.34-acre site at Wainaku Point, overlooking Hilo Bay. C.
Brewer Chairman J.W.A. "Doc" Buyers said the relocation will probably take place
in the first quarter of 1998.

"This is a move for the 21st Century," Buyers said. "The move is more than just
a visionary business strategy - it signifies what we've been saying for some
time - the Big Island's vast potential is beginning to surface and we want to
help accelerate the process." C. Brewer, founded in 1826, said it wanted to be
closer to its main assets on the Big Island, which Buyers described as "the
bread basket of Hawaii." The Big Island subsidiaries include Mauna Loa Macadamia
Nut Corp., Hilo Coast Power Co. and Brewer Environmental Industries. The move
also was prompted by the fact that the company's lease for its historic downtown
headquarters expires in December 1997. The company had been paying about $1.5
million a year in rent, Buyers said. C. Brewer had leased the 65-year-old
building at Fort Street Mall since 1986 after selling it to All Hawaii Holding
Inc. for $8.3 million.

Buyers noted that the move will mark the first time that a former Big Five
company is based on a neighbor island. Other former Big Five companies, such as
Dole Food Co. and the former Amfac Inc., have relocated to the mainland, he said.
The Big Five companies, which also included Alexander & Baldwin Inc. and Theo
Davis & Co., were agricultural concerns that dominated Hawaii industry into the
1950s. News of the relocation comes about six months after C. Brewer Homes Inc.
relocated its headquarters from Honolulu to Wailuku. The company, a former unit
of C. Brewer before the parent firm spun it off in late 1993, develops housing
projects on Maui. Big Island Mayor Steven Yamashiro said the addition of C.
Brewer will have a major impact on the county's economy. Yamashiro said that
county officials had been negotiating with the company for six to eight months
as part of a big push by Hawaii County to attract new business. The new
headquarters will be renovated at a cost of up to $3 million.

Another article states that C. Brewer Homes is Loseing money:

C. Brewer Homes Inc. became the third major Hawaii home builder to report
disappointing earnings for the latest quarter. C. Brewer yesterday said it had a
loss of $82,000, equal to 1 cent a share, in its second quarter, compared with a
profit of $327,000, or 4 cents a share, in its second quarter of last year.
Revenues in the latest quarter, ending Sept. 30, were up 29.3 percent from a
year earlier at $5.3 million compared with $4.1 million. But the company also
said it had significant increases in costs during the quarter. C. Brewer, which
is active in housing development on the neighbor islands, also said sales have
been adversely affected by uncertainty among prospective buyers because of the
poor condition of Hawaii's economy. C. Brewer Homes President Pete Moynahan said
the company's profitability is being hurt by incentives it offers to get people
to buy in a tough market. Costs soared as options such as design enhancements,
air conditioners and other improvements that would usually be bought as extras
were given away to encourage sales, the company said. At Kehalani, Brewer's
2,400-home project at Wailuku, Maui, the company closed sales of 24 single-
family homes in the second quarter at an average price of $219,000. Sales there
in the year-earlier quarter totaled 13 homes at an average of $266,000. At Iao
Parkside, a Maui project in which Brewer is a 50-50 partner, 10 condominium
units were sold in the latest quarter at an averageil,9p6,7p price of $129,000.
In the 1995 quarter, Brewer sold 17 units at an average price of $127,000. As of
Sept. 30, Brewer had a backlog of 25 homes on order but not completed at
Kehalani, with a total sales value of $5.4 million, and six units at Iao
Parkside, its partnership with Schuler Homes Inc., with a total value of
$900,000. Brewer is the last of the three publicly held builders of Hawaii homes
to report disappointing results for the latest quarter. Schuler saw its profit
drop to $485,000 from $2.9 million a year earlier. Castle & Cooke Inc. had a
profit of $2.1 million, but said that without the sale of some mainland
commercial properties it would have reported a loss of $500,000. The previous
articles show that Hawaii's Economy is declining very rapidly, unlike when they
first started their company, where the economy was great.

Castle and Cooke

Castle & Cooke Homes Hawaii is one of several successor companies to the
company founded by Amos Starr Cooke and Samuel Northrup Castle in 1851, began
residential development of the company's lands in the early 1960's with the
Mililani Master Plan. Castle And Cooke now owns about 99 percent of the land on
the island of Lanai, and they own about 29.75 percent of the other islands.

American Factors

"What Amfac has to do with delicious Kona Coffee" Coffee first came to
KealakeKua-Kona in 1828 by way of Reverend Samuel Ruggles, but it was actually
an arabica strain of coffee from the Hamakua region of the Big Island that was
actually brought to Kona in the mid 1800's and seriously propagated by a few
upstart farmers Much of the coffee production in the latter half of the
nineteenth century was controlled by large land owning companies such as
American Factors, and worked by migrant laborers mostly from Japan. When the
world coffee market collapsed at the end of this century much of the land was
leased to these Japanese farmers who began operating under a barter system with
many local area stores. When the coffee was harvested and sold in the fall,
these farmers would then pay off their debts to these stores. Despite the
maneuvering that took place between the stores and the larger mills, the coffee
was still the property of those responsible for processing and selling the
coffee in the mainland United States. Throughout those difficult years of barter
and land leases, the Japanese farmer slowly gained control of an industry
originally established by the larger corporations. Many farms around Kona began
small milling operations on their property which added value to their product.
The industry ran itself like this for over a half a century, but always at the
mercy of what the international coffee market was doing to the price of coffee.
Having no control over these prices or market value of their coffee a series of
booms and busts occurred over the years making coffee farming a risky business.
Coffee production was as high as 7,000 acres in 1958, but the pound price for
cherry was only 12! (You will better understand this relationship between price
per pound and cherry later in this article.) It wasn't until the influx of
haoles (Hawaiian slang word for Caucasian main landers) in the early 1970's that
the local Kona coffee industry began to monitor and administer its own market.
Today's push for purity, up scaled means of production, direct marketing by the
farmer and the gourmet reputation of the product has proven to be a lucrative
means to achieving a stable marketplace.