Big Five (Hawaii)
|Hawaii's Big Five|
The Big Five (Hawaiian: Nā Hui Nui ʻElima) was the name given to a group of what started as sugarcane processing corporations that wielded considerable political power in the Territory of Hawaii during the early 20th century and leaned heavily towards the Hawaii Republican Party. The Big Five were Castle & Cooke, Alexander & Baldwin, C. Brewer & Co., American Factors (now Amfac), and Theo H. Davies & Co. The extent of the power that the Big Five had was considered by some as equivalent to an oligarchy. Attorney General of Hawaii Edmund Pearson Dole, referring to the Big Five, said in 1903, "There is a government in this Territory which is centralized to an extent unknown in the United States, and probably almost as centralized as it was in France under Louis XIV."
Though commercial sugar production began in the first years of the 1800s, the industry remained relatively minor until the Reciprocity Treaty of 1875. This treaty provided duty-free trade of sugar between the Kingdom of Hawaii and the United States, and it generated massive disruptions in the sugar industry. Plantation growth and consolidation soon followed, with the number of plantations falling from 79 in 1875 to just 20 in 1883. Prior to this disruption, the agencies played a much more limited role in Hawaiian industry. They served primarily to add liquidity to an agricultural industry with long growing periods (18-24 months) by both providing credit against future sales and providing transportation to foreign markets and equipment procurement. With the growth pressure imposed by the Reciprocity Treaty, however, plantations required capital infusions in order to expand their cultivation into more marginal lands, leading to increased reliance on the agencies for credit. With Hawaii's annexed by the United States, this change was locked in as sugarcane plantations gained a new infusion of investment. By eliminating tariffs imposed on sugarcane producers by the United States, planters had more money to spend on equipment, land and labor. Increased capital resulted in increased production. Five kingdom-era corporations benefited from annexation, becoming multimillion-dollar conglomerations that controlled 90% of the sugar business. The companies colluded to keep the prices on their goods and services high. Their profits skyrocketed even more. Soon, the executives of the Big Five sat on each other's boards of directors. With economic power came political power, and the families usually favored the Republican Party of Hawaii.
During the Democratic Revolution of 1954, the unions inflicted a decisive blow against the giants and the sugar industry declined after Hawaii became a state in 1959; so did each of the Big Five companies. The greatest post-statehood challenge came as the U.S. Department of Justice challenged the ownership of Matson Navigation Company by four of the five companies (all except Theo H. Davies). The lawsuit was settled when the four companies agreed not to share officers, executives, and directors. Alexander and Baldwin eventually bought out the other three stakes in Matson in 1964.
In the 1970s, as sugar plantations closed, many of the Big Five companies themselves were bought out. Where the companies are now:
- Theo H. Davies was bought in 1973 by Scottish-controlled Hong Kong firm Jardine Matheson. Until December 2004 it owned the Pizza Hut and Taco Bell franchises in Hawaii. The sole remaining unit is its travel agency which was spun off and sold to management.
- C. Brewer was bought in 1978 by Philadelphia-based IU International, and was later bought out by its management in 1986. In 2001 the company's shareholders voted to liquidate the company over several years.
- Castle & Cooke merged with Flexi-Van Corporation, owned by David H. Murdock, in 1985. Murdock became its chairman after the merger, then took full control in 2000. It still owns large portions of Central Oʻahu and the Iwilei area of Honolulu around the former Dole Food Company pineapple cannery. Until recently, Castle & Cooke owned nearly all of the island of Lānaʻi; in June 2012, Oracle CEO Larry Ellison bought their share for approximately 500 million dollars.
- Amfac was bought out in 1988 by Chicago-based JMB Realty. In 2002 Amfac declared Chapter 11 bankruptcy and emerged as Kaanapali Land, LLC. It owns 5,000 acres (20 km²) in West Maui. Its department store, Liberty House, was sold to Federated Department Stores and is now part of the Macy's chain.
- Alexander & Baldwin diversified and remains in business. Today it owns about 91,000 acres (370 km²) of land and is the fifth-largest landowner in the state.
The Big Five are mentioned in Kaye Starbird's THE LION IN THE LEI SHOP (p. 43).
- Lyn Danninger (September 29, 2002). "Isle institutions' economic impact endures". Honolulu Star-Bulletin. Archived from the original on 2008-06-28. Retrieved 2010-05-01.
- Maenette Kapeʻahiokalani Padeken Ah Nee-Benham; Ronald H. Heck (1998). Culture and educational policy in Hawaiʻi: the silencing of native voices. Psychology Press. p. 137. ISBN 0-8058-2704-8.
- Jung, Moon-Kie (2006). Reworking race : the making of Hawaii's interracial labor movement. New York: Columbia University Press. ISBN 0-231-50948-0. OCLC 76705642.
- Frederick Bernays Wiener (1982). "German Sugar's Sticky Fingers". Hawaiian Journal of History. Hawaiian Historical Society. 16: 15–47. hdl:10524/462.
- Charlotte Curtis; Carl T. Gossett Jr. (November 27, 1966). "Where Aristocrats Do the Hula and Vote Republican; Land and Commerce Screens From Japan New England Heritage Attended Punahou Cousins Society Plumeria and Orchids". The New York Times.
- Lagos, Maria (20 June 2012). "Oracle's Ellison is buying a Hawaiian island". San Francisco Chronicle.