The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1856-1888, 1866-08-18
Fer the Pacific Commercial Advertiser
To the Planter. Of the Sandwich Island

bt present ullttCtttuttdlN low price OF sugar
leads me to lay before you my view OF the only
way which | can see To restore the market TO a rea
sonably paying condition. without ~inficting con
; tinuei loss upon all who are interested. TIL,
market will most certainly be restored. because the
/ natural law of supply and demand is above and
beyond any human law or combination, and every
necessary OF life as a rhs IciH Be supplied, and at 8
rate which will pay the producer, whether it be
sugar now become . necessity of life). OF cotton,
or wool. or grain but. in order 10 pay. the supply
must not erceed tie demand. If the supply at any
time exceeds the demand. the price must go down
the result is inevitable. If the supply is de-
fcient, the price will as certainly go up to q figure
that cannot be maintained, for the high price will
soon stimulate an oyer-production. which often and
generally inilicts losses resulting in failures and
Withdrawals. until scarcity again follows plenty, as
the latter had followed the former. This is an I'M
doubted cause of the almost periodical revulsions
and failures and panics which succeed each other
every few years in the commercial and financial
world.
This now, without doubt. is the cause of the de-
preston in the price of sugar. Since 1861. the
amount Of sugar produced on these islands has in
creased from two TO about fifteen or twenty mil
lions of pounds, and this, with supplies from other
sources. has overstocked the market upon which
you depend. The supply has increased more rap
idly than the demand. The demand increases from
two causes: FTrSt-lncrease of population, and
consequent I'M and Second-depressed
prices, which also increases the consumption OF the
necessaries of life, but the latter does not pay the
producer. and. as before stated. can have no per-
manence. The former is permanent, and warrants
an increase of production equal to the increased de-
mand hut in this case the production has gone on
increasing whilst the population and demand of
the Pacific slope. 1 mean California, Oregon. Wash
ington Territory and British Columbia have re-
manned almost stationary. Statistics of population
and consumption establish this fact, at least an
pro1imately, and hence the large surplus is I'M
questionably the cause of the low price of sugars.
In view of a prospect of this state of things. and
with the hope of preventing it, George Gordon.
Esq. Manager of the San Francisco and Pacific
Sugar Refining Company, on the Sd of April, 1865,
addressed the planters of these islands proposing
to contract here for 4 part of our sugar crop-say
one-haf-to be boiled for refining purposes. whilst
the other half would be boiled as usual into the
best quality of coffee or grocery sugar of which it
was capable, and to diminish by so much the
orders which the Refinery had been accustomed TO
send to Manila. This would relieve the market.
keeping it even, firm and paying, as Manilas were
only imported 10 order for refning-heingu unsafe
able for other purposes. He offered, for this p,u-
pose, to pay fifteen per cent. more for our sugars of
the same standard than for Manila, whilst by sus-
tanning the market in good condition, the Refinery
could afford to do so for the same reason the
planters could also. as although the part sold to
rcliners might not net them as much as they had
been receiving. yet the price of the best sugar be-
ing sustained. the Gggregdte receipts would be more
for both parties than they would remain without
an understanding. But he supposed the increased
quantity of sugar from any given amount of Juice,
boiled high for refining. would partially if not
wholly compensate for the smaller price. | will
give his own illustration from a subsequent letter.
lie says A planter can make from his cane saw
100000 pounds of fine raw sugar; or he can make
from the same cane $4,000 pounds of fine sugar
and Ga. 900 pounds of refining sugars. If by throw
ing, on 4 limited market. so much fine raw sugar
he reduced the price SO that it nets him only 5 cents
per pound without containers. equal to l04 cents
in San Francisco) he will obtain S., 600 for his
crop. But if he makes 65, 600 pounds of refining
sugars at say 4 cents, and by so doing can obtain
6 cents for the 10000 pounds of fine sugars, he will
obtain $500 for his crop and with less outlay.
Ny object in addressing a circular to the sugar
planters was for their and orr common benefit.
We are both engaged in supplying the same mar
ket that market is a limited one"
He further says THE matter of price will adj
just itself. In my circular | named Is per cent.
above Manila quotations as a basis. This. at the
present time DUNE, 1869, would be 81 75 per 100
pounds cash in Honolulu for sugar in mats or bags
of quality equal to standard Manila"
Whether Mr.. Gordon is correct in regard to the
extent of the increase of the yield, having no pos
tive knowledge | cannot say. But l doubt whether
by any method of boiling we can much increase
the aggregate yield Of our first and second sugars.
OF sugars which will drain dry. but allowing the
aggregate to remain about the same, without doubt
we can largely increase the first, and by as much
diminish the second sugars U speak of drained
sugars and not mclado) and had we last year
made this arrangement, the results would have
been greatly in our favor the present wear. As
you are aware. l advocated Mr.. Gordon's views
because they seemed to me sound. Others viewed |
the matter differently, not with any wish to com
pete with the refiners. but with the full belief that
We culd no, 50 easily over'toct the market that the increas-
ing population and consumption would create an increased de-
The result, has proved that this has no, been tie case, .d
@ 1o,h ptA bs. s-s q .f hr,1sr nave er ,snGTea n 1s eon" o In.
increased but little il at all, and it is the opinion Of able men
who have turned their thoughts to the subject, that the renewed
South offers such opening, for capital and enterprise that little
INCREASE can be looked for till the Pacific Railroad is completed.
to the demand, 1 think it would have 30 nearly lone so as to
Mr.. Gordon stated the consumption of the Pacific Coast, in
d 5 =. a: It, oc, 100 pounds n ,S Of Of sugar; The Who'll amount
Amount exported from here to Portland. ........ 100000 :"
Amount exported from here to yictoris......... 100000 "
Amount exported from here to Port Townsend. 100000 "
Total to the Pacific Coast. 100000 lbs.
or th, these islands have e5edi. FOR /. little over 100000
ing out Of crushed and coffee sugars about 100000 pounds.
pound, OF the raw sugar. which leaves in the market OF raw
coffee sugar 200 ooo pounds, to which the refneries zl add
amount Of ~, 100000 for a market requiring about 100000
pounds under which a decline in price, was inevitable. WV
Now had We sold the refneries 100000 pounds, they
would have ordered 100000 pounds less from Manila. and
the whole amount of rsvs would have heen SO 80. 900
pounds for the Pacific Coast, from which take 81, 75OO 6o
pounds FOR refinery use AZ before, and you have 9 OOO.OOO
pounds OF raw coffee sugar, to which add from refinery $3.50 900
pounds, and you have of coffee sugar = total Of Il. 100000
pounds, or just about enough to supply the demand, apd price,
would have been maintained.
At present prices both planters and refner, IRE large suffer
ers- Their views differed as TO the extent OF the demand, hut
neither party wished to run the other. Mr.. Gordon in his cir
says: 1t cannot but be a matter u regret IL the plant
es and refncrs, instead OF working together for 8 mutual
profit, shall enter into needless competition to their mutual
loss " And again The rehners cannot cease their pruluc-
hon or yellow sugars without ccasing to produce IrhIE,. They
merely work up the syrups OF white su ;ars into yelovs"
Nos is there any way TO restore the market to a healthy state
without the ordinary one az withdrawal or failures, which by =
natural law Genes sooner or later in such cases; Both parties
made large investments and neither wishes to retire it's
,anlaL; and nr.hsnIx n no Lar md .nst arzlnGcm.nt can %.