The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1856-1888, 1871-06-03
Reasons for High Prices

MI. EDITOR I'm your issue of the 9th May,
r Publca takes the merchants of Honolulu to
task for the exorbitant and Internationally high
prices current here, - and begins with the ASSERT on
that prices are fully 100 per cent. higher here than
n any other country or amongst any other people
; -nder the sun.
- NV 1 wish to show -" Res Publica " q very good
reason why prices should be a great deal higher here
than in almost any other place under the sun and
then, as for tb,1 heavy profits, it is n well known fact
that competition is the life Of trade, and there is no
doubt that if all of your correspondents SUPPOSE
tons and statements are correct, he has q good
chance to reduce prices by such competition.
With the Australian markets, from which Res
Publica draws his examples, 1 do not profess to be
acquainted, but with English and American markets
1 plead guilty of a slight acquaintance, as a buyer.
Honolulu is at a distance from New York in time of
two and u half to three months, and from England,
of five to six months. By this 1 mean, that on an
average, it takes just about the above mentioned
time for an order for goods to be sent from here to
either of the above mentioned markets. filed, shipped
and landed on this beach by the shortest route.
Every one knows that the longer it takes to turn
money over, the greater proportionate profit must be
made on it, to realize a good interest.
Taking English goods as they run, they cannot be
laid down i'll this market much short of 40 per cent,
and if the invoice happens to be a bulky one, there
is no telling what the charges may amount to. They
are about as follows:
Nominal duty, 10 per cent, on net value Of the
goods in the invoice, not less than ............ IL per cent.
Insurance from England TO Honolulu ....... q per cent.
Coin in England is = to 3 per cent, say..-..... % per cent.
shipping charges, C rtage, DC, in Liverpool, say 2 per cent.
Freight to Honolulu, of course will vary as
goods are bulky or not, but will average about IL per cent.
Interest on money from time Of remittance with
order for goods. say NEUTRALITY-SUSPICIOUS.. 4 per cent.
Packing cas- 5 and charges. carriage. WHARFAGE
exchange, etc not less than ..-........... 8 per cent.
Total 40 per cent.
1t takes, as l have shown above, about five or six
months, after remittance of money, before goods are
received then making proper allowance for the
time the goods will have to lie on the shelves before
being sold, and the time before the money is received
In return for them after sale, it will be found hard
on to ten or twelve months. That is, it will take n
Honolulu merchant ten months or more to turn his
money when dealing in English goods. The English
dealer is at home his supply market is right at his
door he does not need to carry one fifth of the
stock that a trader in these islands does when he is
out of an article he can replace it either at once, or
at iarthest IN a few days. He can do as large a
business on a capital of e2 1000. as a man here can
on a capital of 100000 Or to put it in another
way, ne is IN circumstances to turn his money four
or hve times, while here he could in the same time
do it only once. Or still again, 10 per cent. profit
on each time he turned it would amount to a larger
profit in the year than 40 per cent. would every time
1T was turned here.
For instance. Suppose an article purchased by a
dealer in England for four shillings, or say $1.OO.
He retails it for $1.1O. The Honolulu dealer buys
the article for the same price, viz. $1.OO. 1t costs
him 40 per cent. to lay it down here, or $40.
Now, his profit has to be calculated mot on the first
cost in England, but on its cost when placed ON his
shelves, or. say 40 per cent. on Sl.40 would bring
the price up to S1.96. So that the buyer here might
with perfect truth say that an article costs nearly
IOO per cent. more than in any other country, and
yet, II he examined the subject, he would find that
the dealer did not make any such enormous profit
after all.
L have illustrated the subject thus, in order to
show that a comparatively large per ceutage is in
.Vltaole at a great distance from a supply market.
for the 40 per cent. taken as example, it would
be very safe to wager that no such profit is averaged
upon the goods brought into this market, if the
exact truth concerning it could be known.
The illustration of boots is well taken for me.
boots, an American make of world wide
cannot be laid down here and sold for
ess than $1,000 Fer pair, and clear the dealer,-
without saying a word about profits. And 1 have
to say that if Australia can furnish good boots
1t $500 per pair, Australia can Immediately look
'ut for Hawaiian custom in that line.
In the above illustration, 1 have supposed the Ha-
retailer to import direct, but this is hardly
the case in this or any other market, conse-