“By 1941, every time a native Hawaiian switched on his lights, turned on the gas or rode on a street car, he paid a tiny tribute into Big Five coffers.” (Alexander MacDonald, 1944)
The story of Hawaii’s largest companies dominates Hawaiʻi’s economic history. Since the early/mid-1800s, until relatively recently, five major companies emerged and dominated the Island’s economic framework. Their common trait: they were focused on agriculture – sugar.
They became known as the Big Five:
C. Brewer & Co.
Founded: October 1826; Capt. James Hunnewell (American Sea Captain, Merchant; Charles Brewer was American Merchant)
Incorporated: February 7, 1883
Theo H. Davies & Co.
Founded: 1845; James and John Starkey, and Robert C. Janion (English Merchants; Theophilus Harris Davies was Welch Merchant)
Incorporated: January 1894
Amfac
Founded: 1849; Heinrich Hackfeld and Johann Carl Pflueger (German Merchants)
Incorporated: 1897 (H Hackfeld & Co;) American Factors Ltd, 1918
Castle & Cooke
Founded: 1851; Samuel Northrup Castle and Amos Starr Cooke (American Mission Secular Agents)
Incorporated: 1894
Alexander & Baldwin
Founded: 1870; Samuel Thomas Alexander & Henry Perrine Baldwin (American, Sons of Missionaries)
Incorporated: 1900
Some suggest they were started and run by the missionaries. Actually, only Castle & Cooke had direct ties to the mission – Castle ran the ‘depository’ and Cooke was a teacher.
Alexander & Baldwin were sons of missionaries, but not a formal part of the mission. Brewer was an American sea captain and merchant; the founders of Davies were English merchants and the founders of Amfac were German merchants.
Hawaiʻi’s industrial plantations began to emerge at this time (1860s;) they were further fueled by the Treaty of Reciprocity – 1875 between the United States and the Kingdom of Hawai‘i eliminated the major trade barrier to Hawai‘i’s closest and major market. Through the treaty, the US obtained Pearl Harbor and Hawai‘i’s sugar planters received duty-free entry into U.S. markets for their sugar.
As the sugar industry pushed ahead, something else new was introduced into the economic scheme of things. In Honolulu two or three new firms began business solely to handle the affairs of the scattered plantations.
They began by acting as selling agents for the planters. Gradually they took over other functions: financing crops, importing labor, purchasing machinery for the planters and serving in all ways as their business agents. The new businesses soon found themselves running the sugar industry.
By the 1880s, five of these concerns, called factors, eventually dominated the field. How effectively the Big Five could band together as one against outside forces whether the enemy was foreign capital, insects, labor, competing products or disease was well demonstrated by their Hawaiian Sugar Planters Association, more familiarly known as the HSPA. (MacDonald)
This group organization for Hawaii’s sugar industry was founded in 1882 as the Planters’ Labor and Supply Company when the planters found they had common problems in irrigating the sugar lands, growing the cane, and finding labor. That was its immediate official purpose.
“Everything that comes into the territory comes through a large corporation. The independent businessman who attempts to enter business here immediately finds that even nationally advertised lines from the mainland are tied up by the Big Five. It is almost impossible to get an independent line of business as they have everything – lumber paint, right down the line.” (Edward Walker, High Sheriff of Hawaiʻi, 1937; Kent)
Acting as agents for thirty-six of the thirty-eight sugar plantations, the Big Five openly monopolized the sugar trade. Twenty-nine firms, producing seven out of every eight tons of sugar exported from the Islands, refined, markets and distributed through the Big Five’s wholly owned California and Hawaiian Sugar Company, whose refinery, the largest in the world, was on San Francisco Bay. (Kent)
They branched out into other businesses. To squeeze additional profits out of the sugar trade, they started their own refinery in California; it was to become the largest in the world. They built up a fleet of ships, the Matson line, to carry the sugar away and to bring back goods and passengers.
They developed inter-island shipping, built hotels, put capital into insurance, cattle, pineapples, banking. They took over bodily the wholesaling of goods coming into the Islands; ninety percent of retail stock came from their warehouses.
Their capital started the public utilities. Their street railway transported Hawaiians, their gas and electric plants lighted the city, they acquired the communications systems. (MacDonald)
The sugar industry was the prime force in transforming Hawaiʻi from a traditional, insular, agrarian and debt‐ridden society into a multicultural, cosmopolitan and prosperous one. (Carol Wilcox)
With statehood in 1959 and the almost simultaneous introduction of passenger jet airplanes, the tourist industry began to grow rapidly.
The industry came to maturity by the turn of the century; the industry peaked in the 1930s. Hawaiʻi’s sugar plantations employed more than 50,000 workers and produced more than 1-million tons of sugar a year; over 254,500-acres were planted in sugar. (That plummeted to 492,000-tons in 1995.)
A majority of the plantations closed in the 1990s. As sugar declined, tourism took its place – and far surpassed it. Like many other societies, Hawaii underwent a profound transformation from an agrarian to a service economy.
There were a couple other associated entities that were associated with the Big 5” Dillingham (Benjamin Franklin Dillingham) and Campbell (James Campbell) and their associated companies.
Click HERE to view/download for more information on Hawai‘i’s Big 5 (plus 2).
Follow Peter T Young on Facebook
Follow Peter T Young on Google+
Follow Peter T Young on LinkedIn
Follow Peter T Young on Blogger
