Honolulu star-bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1912-2010, 1916-10-14
Financial JVRqHSI &YZZgal q i D commercial
KONA.TODACCO COMPANY WILL BE
CONDUCTED ALONG DIFFERENT LINES
Committee Gives History Of Old Company. Points Out Mis-
takes of Past and How to Avoid Errors in Future and
Shows Way to Reorganization Of Company With No Out
standing Debts

teen months after the manager left
were al so low a figure that investors
would not put more money into IL.
1912 Is Unfortunate
I'm the meantime the assistant man.
ager planted 80 acres Of crop on the
company lands at Keokea. but through
a series OF unfortunate circumstances
only a small lot OF leaf was harvested.
This was cured and fermented by him
without outside assistance. The as
sistant manager had been a medical
student before coming to Hawaii with
his father TO become assistant man
practical experience with tobacco pro-
duction. About the end Of December,
1912, the fermenting house, contain.
ing all the 1911 and 1912 crops was
burned
Manager p. L. Daniels was dis.
missed shortly thereafter. Then W r.
Castle and J. F. Haekfeld put up $780,
900 by mutual agreement to grow an
other crop. Mr. Schrader was en-
ployed to grow crop on the assur-
ance that he could produce tobacco
worth 81 per pound 40 900 pounds on
80 acres. o. A. Bottleson, the cigar
maker who had been in charge OF the
Keokea Cigar Company, had entire
charge OF the curing and packing OF
this crop. The output was about f3.-
900 pounds of which about half has
now been sold. The remainder Is In
New York and San Francisco await
ing sale.
Mr.. Schrader spent about $4,000
instead Of the $4,000 Messrs, Castle
and Hackfeld had agreed to advance.
a considerable share OF the $4,000
deficit having been used in erecting
new barns and another costly ferment-
ing house. This overdraft was paid
or borne by Mr. Castle. The other
shareholders have no equity therein
except that this money was spent on
work which would have ultimately
identified the other shareholders in
the Kona Tobacco Company had Mr..
Schrader been more fortunate in pro-
dueing the quality OF leaf he believed
he could produce.
Since 1913 no crop has been grown
by the company.
Charles j.. Beal, treasurer and
bookkeeper for the company from
May. 1908, to July. 1910, was an ex.
pert accountant and had accumulated
accurate cost data on all operations
up to that time. No such data were
left in the offices Of the company
when ]. L. Daniels was dismissed In
February. 1913: and furthermore In
the numerous changes which have
taken place In the personnel Of the
company practically all records Of de-
tailed costs of operations have van
ished. The books have been well
kept but time books and field notes
and records are not In evidence.
The 1908 crop sold for % cents per
pound
THE 1909 crop: 4 bales wrapper
sold by j. G.. Smith to Merriam e
Company at $1.25-$l.40. Balance
shipped to San Francisco; returned
in 1910, repacked by Kretzschmar and
ruined.
The 1900 crop: Sold by J. L. Dan
iels at average of 30 cents per pound,
for $780, pounds.
The 1911-1912 crop: Burned I'm
fermenting house.
The 1913 crop: % bales, cases
and barrels have been sold at an aver
age price of 20 cents; 40 bales wrap
per of this lot have averaged $0.492
per pound; "A bales wrappers still I'M
sold; AZ packages filler and binder
still unsold; 6 bales wrappers (incIud.
ed in first item aboVel sold at 81. 90
$1.75 per pound.
"Mr. Smiths lack of success ND to
10 4 4
ing sufficient equipment to properly
handle the bumper crop of 1910. He
did the best that could have been
done up to the grading and packing
Kretzschmar. his Sumatra fermenter,
only knew the fermentation.
The two Daniels failed because
they were extravagant, and had had
no previous actual experience in plan
tation work. The elder Daniels knew
good tobacco, and how to sell Il but
he did not know how to produce Il.
Mr.. Schrader would have been
good foreman but did not have the
business training to be q good man
ager. Two bales of wrappers which he
produced sold at S1.75, the highest
price received for Kona leaf, but his
average lOT dlI IODdcCO SOLO was the
same as that received for other crops,
and his cost of production was the
highest
Conclusions Are Given
Your committee has not been able
to visit the property on account or
press OF other business, and it be-
lieves that enough has been learned
through the failures of the past to
make it possible to overcome the diff
ficulties OF the future.
The capital, expended has been lost
irreVocably, but If a new company is
formed. taking the property and equip
ment of the old concern and making
full use of the experience gained, we
believe success will follow. Enough
tobacco has been sold to prove that
the Kona product has exceptional
merit, provided the services of a COM
petent curing. fermenting and grad
ing expert can be obtained.
we therefore recommend. after
careful consideration of the proposal
made by W. R. Castle on August %,