The Big Five Essay, Research Paper

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.