Hawaii Chronicles III: World War Two in Hawaii from the Pages of Paradise of the Pacific

Hawaiian Economy, Present and Future

Hawaiian Economy, Present and Future DR. RUBY T. NORRIS, SENIOR ECONOMIST, OFFICE OF PRICE ADMINISTRATION Note: The following article represents the personal views of the writer and is not an official release from the Office of Price Administration. E The war is effecting many and sweeping changes in the economy of the Islands. The basic production of Hawaii—cane and pines—is being carried on under terrific strain. The Islands have been transformed into a fortress. The new airports and defense projects have commandeered much excellent land; and the labor supply has drifted away into the armed forces, defense work, and the highly lucrative service trades. The processes of importation, by which the Islands obtain the vast bulk of the consumption goods, are carried on under abnormal and trying circumstances. Old established firms find their quotas cut by their customary suppliers, and new firms are having to buy under very disadvantageous terms from far-flung sources. Invoices are high and differ widely from shipment to shipment. Goods come in, poorly selected for export, badly wrapped, handled in the boats by inexperienced help, crowded, and frequently damaged. For this chaotic buying and shipping , the consumer pays and pays and pays and cries for more. The market is so “dry” that anything that can be brought in, broadly speaking , will sell. “The lid is off.” Before the war a buyer would think twice before snapping up a high-cost lot of merchandise, as he would know it would have to sell in competition with properly bought, well-known brands. Now, if he can get it, he can sell it, and at a profit. 176 First published March 1944. Hence there have arisen many new ventures. The Islands are alive with new, small, manufacturing establishments in such lines as gifts, tropical novelties, and candies. Many use family labor. Equipment is pieced together with “Yankee ingenuity” taking the place of priorities. Sources of supply are high cost, perforce, in many cases. For example, many hand blocking establishments have bought cloth at retail. In almost all lines of trade, the old and large concerns are doing a smaller percent of the total business in their line,not because they are not doing more business, but because they cannot keep pace with the upsurge of the new and small. The big concern has an eye to its reputation and to the future and is less likely to buy from the high-cost mainland supply sources. Overhead is large and fixed and is not being expanded to meet what is obviously an abnormal demand. Hence, the big concern doubles its volume—but does not treble it, and the dozens of small new jobbers and manufacturers continue to rush into business. The service trades, of course, are even more prosperous than Island manufacture. The Islands are the hosts to the fleet and the Pacific army. New concerns in entertainment and restaurant fields spring up overnight and cannot begin to meet the demand. It will be worse (or better from a business angle) when the war in Europe ends and the full attention of the armed forces is turned to the Pacific. This, in a nutshell, is the picture of the current economy of the Hawaiian Islands as it appears to one observer. What of the future? In the future, the primary forecast is that there will be a permanent and large population increase. Several million potential residents have had the Islands exhibited to them, at government expense! Hawaii has never had a press agent to compare with Uncle Sam. Thousands will carry back to the mainland . . . tales of the spectacular mountains, the gorgeous flowers, the active year-round sport life of the Islands. It is true that these features are somewhat obscured for many by a temporary shortage of women and the crowded conditions of wartime living. However, many a mainland lad will take his honeymoon in the Islands, will return for his vacations, will return again to retire. Others will simply return—permanently. If this forecast be correct, then certain other results will necessarily follow. After the war, the economy of the Islands will be less focused on cane and pines than was the pre-war economy. The latter will always be important—as a primary source of cash income. Pineapple, particularly , is likely to see an important expansion. Much of the pineapple War!—1944 177 pack has been commandeered during the war by the...