Lit Review: Business Conflict Model — Case Study: Hawai’i and Sugarcane

The Hawai’ian archipelago lies about halfway between the Pacific North American and Asian coastlines and has been a possession of the United States since the late-nineteenth century. At the time of its annexation, Hawai’i was billed as a critical national security asset for the United States, providing strategic control of the northern Pacific and total control of the archipelago’s commerce (Thurston, 1897). The primary commerce that the island chain was concerned with was inter-Pacific trade trade — vying for control with the United States — and sugarcane. The latter had been a part of the archipelago’s tradition for millennia, but the arrival of Europeans, and later, Americans, transformed the cultivation on an industrial scale (Morgan, 2011).

The arrival of Europeans decimated the Hawai’ian people due to the introduction of disease. Conservative estimates place the pre-colonial population between 400,000 and 1,000,000, and by the early nineteenth century, just four decades later, the population had fallen to 135,000 (Silva, 2004). U.S. missionaries traveled to the archipelago in the early nineteenth century and were instrumental in the creation of the Hawai’ian alphabet and the establishment of a printing industry (Silva, 2004). Hawai’i was thrust into the Great Power games in 1839 after being extorted by the French for the sum of US$20,000 (Silva, 2004); four years later, a British naval captain attempted to take over the nation before the British government restored sovereignty on July 31, 1843 (Silva, 2004). Later that year, the Hawai’ian government received recognition as a sovereign state by the United States under President Tyler (Silva, 2004).

The U.S. missionaries played a pivotal role in the transition to industrial sugarcane production. In 1850, the Hawai’ian legislature approved the procurement of land by foreigners, which previously had not been permitted (Silva, 2004). Their position in Hawai’ian society rose with their land purchases, and along with British and American businesspersons, they grew to own some of the most prized land in the islands, which had previously been property of the Hawai’ian state (Silva, 2004). With the U.S. Civil War raging in the United States, domestic sugar production was disrupted for the Union, and Hawai’ian sugarcane imports surged to alleviate the supply-demand imbalance (Morgan, 2011). By this period, foreign, in particular, U.S., dominance of the Hawai’ian industry was largely complete, with native Hawai’ians subjugated to the labor class under the same racialized doctrine that had permitted slavery in the United States (Silva, 2004). The sugarcane industry came to dominate Hawai’ian politics, leading to the enactment of the Reciprocity Treaty of 1875 — over the protest of native Hawai’ians — which enacted a free trade regime for Hawai’ian sugarcane exports to the United States that had previously been subjected to protectionist tariffs (Silva, 2004). Exports increased by 50% within a year of the treaty coming into force, and by 1899, the year prior to annexation, Hawai’ian production had increased by 2,200% (Morgan, 2011).

The dramatic increase of sugarcane production brought wealth and political power to the foreign producers. While the United States maintained diplomatic relations with the Hawai’ian state as a sovereign entity, the Hawai’ian sugar lobby, with strong connections to the U.S. sugar lobby, was busy consolidating power in the archipelago for its own business interests. In 1887, the sugar lobby forced a constitutional change on the Hawai’ian Kingdom, the Bayonet Constitution, so named as it was enacted through the use of physical force, which enshrined an oligarchy for the sugarcane industry and businesspersons (Silva, 2004). Two years later in 1889, after a failed attempt by native Hawai’ians to take back control of their kingdom by undoing the Bayonet Constitution, U.S. troops landed to instill order in favor of the largely U.S.-led government (Silva, 2004).

The next year, the Tariff Act of 1890 was enacted by the United States, which cost Hawai’i millions as all sugar imports became duty-free, destroying the position of privilege that had been afforded to Hawai’ian imports over other foreign imports under the Reciprocity Treaty of 1875. During this financial loss, Liliʻuokalani rose to power in 1891 and sought to return control of the archipelago, including land ownership, to the native peoples (Thurston, 1897; Silva, 2004). Liliʻuokalani, respecting the wishes of her constituents, was prepared to enact a new constitution but was thwarted by the largely U.S. oligarchy (Morgan, 2011). Two days later, U.S. troops landed in Honolulu, and the oligarchy forced Liliʻuokalani to abdicate her throne, declaring the establishment of the Hawai’ian Republic — with the U.S.-oriented sugar industry in full control of the archipelago and having the aim of annexation, which would permanently resolve any tariff situation (Morgan, 2011).

The official U.S. perspective on the Republic varied by the party that controlled the White House. Democratic administrations, as non-interventionists, generally opposed recognition of the coup while Republican administrations, as interventionists, were in favor (Silva, 2004). However, neither party was fully invested in annexation at that point, much to the chagrin of the sugar lobby. That all changed once the sugar lobby’s aims aligned with U.S. foreign policy. The rise of the Japanese Empire in the late-nineteenth century threatened the new U.S. hegemony in the northern Pacific, and the sugar lobby feared the influx of Japanese workers on their sugar plantations would lead to loss of control should the Japanese government move to annex the archipelago, using the existence of Japanese workers as a pretext (Thurston, 1897; Morgan, 2011).

This alignment of interests came to a head in 1897 when the Japanese made several missteps, including sending warships to Hawai’i, prompting the United States to act in order to protect its commercial interests — Pacific commerce and sugarcane (Morgan, 2011). President McKinley secretly rushed the annexation treaty to signature within less than two months of Japan dispatching ships to Honolulu, but it would take a year before the treaty was ratified by the Senate (Morgan, 2011). The arguments in favor of annexation included control of trade, particularly full domestic control of the sugar industry, and the strategic military importance of the archipelago’s position in relation to Japanese and Spanish interests (Thurston, 1897). With the debate culminating in the midst of the Spanish-American War and the Japanese threat still looming, the Senate passed the Newlands Resolution on July 4, 1898, to annex the Hawai’ian Republic as a territory of the United States, thus securing a strategic base in the region and control of the North Pacific trade (Thurston, 1897; Morgan, 2011). The goal of the sugar lobby had been realized.

References:

Morgan, W. M. (2011). Pacific Gibraltar: U.S.-Japanese rivalry over the annexation of Hawai’i, 1885–1898. Naval Institute Press.

Silva, N. K. (2004). Aloha betrayed: Native Hawaiian resistance to American colonialism. Duke University Press.

Thurston, L. A. (1897). A hand-book on the annexation of Hawaii. A.B. Morse Co., printers.