William Matson was born in 1849 in a Swedish seacoast town and ran off to sea at the age of twelve. According to his daughter, he had not a single day’s schooling in his life.
At 18, Matson “came round the Horn” to California and soon worked his way up to the captaincy of a scow schooner (barge) in San Francisco Bay.
At age 33 he became one-quarter owner—for $5,000—of the new three-masted schooner, Emma Claudia, and brought her to Hilo on her first voyage. Matson saw opportunity on the Big Island and began to focus his service there.
“My father used to do everything. He bought the horses, he bought needles, thread, mules, dress materials… a floating store.” (daughter Lurline Matson)
Every voyage was a partnership—with different partners holding shares, generally in eighths—and then splitting the profits. Matson expanded in this way, buying more ships and chartering others.
Matson became well established in the Hawaiian trade. His small fleet of sailing vessels shuttled back and forth between Hilo and San Francisco.
Westbound to Hawai‘i, he would bring goods of all descriptions. Eastbound to California, he would take sugar, molasses, fruits, vegetables and hides.
His fleet was still all wind-driven sailing ships, though in 1889 he was quoted: “I was wondering whether I’d ever be able to run a steamship between the islands and San Francisco.”
In 1901, Matson acquired his first steamship, the Enterprise. At that time, most steamers burned coal to fire the boilers. Matson immediately converted the Enterprise to the first oil burner in the Pacific, because oil was cheaper.
It cost $2.10 in oil for the same energy provided by $7.00 worth of coal. Oil was also cleaner, more space efficient, and demanded less manpower.
Matson recognized the potential of oil. He convinced Hawai‘i’s plantation and sugar mill owners to switch from coal and bagasse (sugar cane waste) to oil. Then he converted some of his sailing flee into tankers to carry the oil to the Islands.
Matson said, “If you use fuel in large quantities, you must control the source.” To insure a supply of oil for his ships, Captain Matson bought some wells in California and built a “couldn’t be done” 112-mile pipeline from the Coalinga oil fields to Monterey.
In 1903, he formed the Monarch Oil Company and five years later bought the Buena Vista Hills property (Matson later renamed the area Honolulu Hills) and a year later (1910) created Honolulu Oil Company.
Matson told investors: “You’ll either go broke or get rich.” (Castle and Cooke invested $140,000. Fifty years later, the company was receiving $400,000 in annual dividends, and finally liquidated its shares (at government behest) for over $23-million.)
Honolulu Oil Corporation was engaged in exploration for, and extraction and sale of oil and gas in 15 states and the Dominion of Canada. The actual drilling was done by independent contractors, with Honolulu’s engineers acting in an advisory capacity.
Honolulu’s operations were divided into five geographical divisions: California (California, Nevada and Utah,) Mid-Continent (Texas, New Mexico, Colorado, Nebraska and Oklahoma,) Canadian, Rocky Mountain (Montana and Wyoming,) Southeastern (Mississippi, Louisiana, Alabama, Florida and Tennessee.) Reports note Honolulu Oil was later acquired by a larger oil company.
In 1911, Matson developed compressors to convert his oil product into gasoline and a year later built a pipeline to Los Angeles. That led to the modernization of the US Navy and their conversion to oil. (David Whitley; Taft Midway Driller)
Captain Matson brought the Falls of Clyde into the Hawaiian sugar trade, specifically servicing the plantations of the Big Island, bringing needed goods and machinery from the West Coast to Hilo, and returning with burlap sacks full of raw sugar on its way to the California refineries and then to the markets of the US.
He modified the Falls of Clyde sail plan, added a deck house and chart house, and rearrange the after-quarter for passengers. From 1899 to 1907, the Falls made over sixty voyages between these ports. Sailing time averaged seventeen days.
To help move oil, the Falls of Clyde was converted to a sailing oil tanker (1907;) her insides were gutted and ten large tanks were constructed along both sides and the bottom, giving her a capacity of 756,000 gallons of oil.
Heavy-duty pumps and a second steam boiler to operate them were installed. She sailed between Gaviota and Honolulu Harbor; molasses was often loaded into her tanks for the run back to California.
She continued to carry a few passengers and small amounts of cargo “tweendecks.” (Simpson) (Lots of information here is from Simpson, Stanford, Castle & Cooke and Taft Midway Driller.)
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