The Transformation of Hawai‘i
An oral history tells the behind-the-scenes stories of broken color barriers, big land and financing deals, and other colorful incidents that helped create modern Hawai‘i
Jane Marshall Goodsill has spent thousands of hours listening to people’s stories, both as a licensed professional counselor and a volunteer oral historian. When she set out to collect people’s recollections of her father, Marshall Goodsill, a founder of the local law firm Goodsill Anderson Quinn & Stifel, what she gathered was so much more.
The result is an oral history book, “Voices of Hawai‘i: Life Stories from the Generation that Shaped the Aloha State.” The personal recollections take readers inside events that transformed the Islands from the Big Five era dominated by haole business leaders and politicians into the modern era. The book is published by Watermark Publishing, a sister company of Hawaii Business Magazine.
The recollections of almost 100 local people are included in the book. Here are excerpts:
Former OHA and Kamehameha Schools trustee Oswald Stender on his family’s 999-year lease:
We lived off the land in the Native Hawaiian way. Grandfather John, who died when I was 14 or 15, leased the Hau‘ula property we lived on from the Territory of Hawai‘i. When I was at the university, my sister was living on the property. She wanted to build a house and she needed to find out who owned the land. We never knew who owned it; we just lived there. I researched the property and found that it was owned by the state and we had a lease on it. My grandfather had signed the lease in 1922 and it was for 999 years.
Author Goodsill: I’ve never heard of a lease that long. Was that common?
Stender: It was common in those days. There are a few left and we are one of them.
Alexander & Baldwin President and CEO Chris Benjamin, on closing the last sugar plantation in Hawai‘i, the Hawaiian Commercial & Sugar Co. operation on Maui, in 2016:
I would never blame the anti-cane-burning people for shutting down HC&S. I would never blame any single group. Water opposition didn’t help us much either, but our demise was a result of many, many factors. It was very difficult for me to be the one to shut down the plantation – and the industry – because I had worked there, and I knew all the employees. On the other hand, I was the perfect person to make that decision because I wasn’t some bean counter from Honolulu coming in to say in a heartless way, “We’re going to shut this thing down.” I knew all those people. I cared about them tremendously and they knew that if I was making this decision, it was unavoidable. They knew how much I loved the plantation. It was a sad day.
Henry Clark, former president and CEO of Castle & Cooke, on breaking the color barrier on the boards of Hawai‘i’s biggest companies during the Big Five era:
When Dr. Putnam decided to retire from the Honolulu Gas Co., he asked me if I wanted to be on the board and I said that would be fine, I appreciated it. The next thing I knew I was on the board of the gas company.
I noted that racially the board of the gas company was all haole. When I asked how come, they said that was the way it has always been and that’s the way it probably would be for a long time. I said, “That doesn’t make sense at all. Look at our stockholders. At least half of them are of Oriental extraction, maybe more than that. Look at your employees, more than half of them are of Oriental extraction. Why don’t you have someone of Oriental extraction on the board?” They said, “All right, why don’t you look into it?”
So I did and found there were two very fine candidates, and I brought them to the board and the board said fine. One of them was a Japanese man (George Fukunaga of Servco Pacific) who ran his own successful business. The other was a Chinese man named Zane, who was involved with Liberty Bank. By bringing them on the board it broke the barriers and all the other companies began to do the same thing.
Attorney David Fairbanks on civility in the practice of law:
The law hasn’t changed much but the practice has changed considerably. It is less civil. There is more competition for work. A lawyer is supposed to solve problems, not make things worse. You hear the young lawyers talking about “my case.” It isn’t their case; it’s the client’s case. You do what is right for your clients. I don’t think too many young lawyers today look at it that way; there is a lot of self-aggrandizement.
There is more of what I would call “sharp practice,” which you didn’t have in Hawai‘i back then because this was a small place. If you treated someone shabbily, the next time you worked with them you’d get it back, doubly. Now that code of civility doesn’t seem to matter so much, except among the older lawyers.
There seems to be more aggressiveness and less civility, which is not good. I think that the advent of computers, online resources and e-mails also contributed to that. You see stuff in e-mails that is scathing and acrimonious – almost personal attacks. But people can get away with it because they aren’t speaking face-to-face. Many lawyers have lost the give-and-take of talking across the table. In my day there would be adversaries who’d say, “Come over and look at my file.” You’d reply, “Come over and look at my file. Here’s what I’ve got.” And quite often you could resolve the case.
Former First Hawaiian Bank CEO Walter Dods, on interlocking boards of directors:
There was example after example of interlocking directorates. Here’s a typical conversation at a board meeting. The president of the bank says, “I would like to build a new headquarters on Bishop Street.” The CEO of another firm says, “I’ll go along with it if you buy the safes and the insurance from us.” The other CEO says, “I’ll go along with it, but we have to have this and this and this.” It’s right in the minutes! Everybody was in each other’s pockets. Several companies owned Matson Navigation together at that point. They could decide what the shipping rates were going to be and everything else.
When Bert Kobayashi became attorney general of Hawai‘i (in 1962), the business community was frightened to death. Bert met privately with the CEOs of the Big Five and the other large companies, and basically said, “Look, I’m giving you six months (or some amount of time) to get rid of all these interlocking directorates. If you do that, you’ll never hear from me again. There will be no lawsuits, no front-page newspaper articles. I’m not going to attack you. Just clean it all up.” And they did. The way he did it was admirable. Everybody expected it to be the opposite, with front-page exposés, because here was a chance to get back. After 50 years of being “hands” on the plantations they had the power to change things and it could have gotten nasty.
Walter Dods on Jack Burns and Lowell Dillingham:
Word in the downtown business community about (new Hawai‘i governor) Jack Burns was, “He’s a Communist. He’s going to wipe out society!” Burns, knowing the business community was concerned about him and the ILWU (International Longshore and Warehouse Union), asked to meet Lowell Dillingham, who was the CEO of Dillingham Corp. He was given the runaround. They wouldn’t schedule a meeting. So he drove down there and asked Lowell’s secretary, Anita Rodiek, to meet with him. She said, “Well, he’s tied up in meetings.” He said, “That’s fine. I’ll just wait until his meetings are over.” Finally, they realized he wasn’t going to leave. Eventually he and Lowell met and started talking. Who knows what they said, but that was the beginning of an incredible bond and friendship. Burns talked him into meeting with (ILWU VP) Jack Hall, and Lowell Dillingham turned a very much struggling Community Chest into what is today’s Aloha United Way.
Former First Hawaiian Bank executive Philip Ching, on breaking the color barrier at the Pacific Club:
One day Henry Clark and Frank Damon came to me in my office at First Hawaiian Bank. They said, “Philip, you know about Masaji Marumoto getting turned down for membership at the Pacific Club, right?” “Of course, it was in the newspapers.” “Well, we want you to put in an application for membership.” “You’ve got to be crazy. If I made an application and the word got out, my name would be mud in the entire Asian community. ‘What! The pake thinks he’s too smart, he wants to go join the haoles?’ I’d be a laughingstock.”
But one of my friends said, “It is time, and someone has got to do it.” I said, “But why me? I don’t care about being a member there.” I was told it was for the principle of the thing, breaking racial segregation, so I gave in and submitted an application. They had some closed meetings where the discussions were quite heated. But Henry Clark led the charge; he was a very persuasive guy. So in 1968 Asa Akinaka and I were voted in as members and that changed things forever.
Raymond Tam on the Moanalua land deal between Sam Damon and Clarence T.C. Ching:
During World War II everything was rationed and Hawai‘i was under martial law. You couldn’t buy all the gasoline you wanted; you were given a coupon and you could buy ten gallons per month or some figure like that. You couldn’t buy all the sugar, butter, rice, or all the liquor that you wanted. Sam Damon, head of the Damon Estate, loved his booze, so my uncle Clarence made sure he got all the whiskey he wanted by using everybody else’s ration coupons. They became the very best of friends.
World War II ended in 1945 and rationing ended in 1947. Uncle Clarence was going to San Francisco, and it just so happened that Sam Damon was going to San Francisco. They met at the airport. In those days they didn’t have reserved seating, so Clarence and Sam Damon sat together and enjoyed the trip. On the plane over the Pacific, Sam Damon said, “Clarence, you want to buy the ahupua‘a of Moanalua?” My uncle said, “Sure. How much?” And Sam Damon said, “$8 million.” Now in those days 8 million sounded like eight trillion zillion dollars. My uncle laughed and said, “I don’t even have eight thousand! I cannot pay you.” And Sam Damon said, “Clarence, I trust you. As you develop, you will pay me.” And on a handshake, high over the Pacific, with no lawyers involved, no CPAs or real estate agents, they made one of the biggest private land deals in Hawai‘i.
Former Kaneohe Ranch CEO Mitch D’Olier on the land trust’s conversion of leased home lots:
There was very little fee simple land available to single-family homeowners in Hawai‘i. One goal of the Hawai‘i Democratic Revolution of 1954 was to change that. There was resentment toward big landowners, bad feelings on all sides, and fights about the prices. It went back to the hard feelings about the way workers had been treated on the plantations for so many years. Japanese Americans largely led the Democratic Revolution, and they wanted to own their own land; part of being a first-class citizen is owning your own land.
There was a legal question as to whether Kaneohe Ranch and other landowners could sell huge numbers of parcels of land to lessees and pay tax at capital gains rates. There was a provision in the tax laws to allow farmers to subdivide their fields and sell them off and get 90% capital gains. This ruling was to encourage urbanization of rural properties. There were some rules: You couldn’t build the houses, you couldn’t build the roads but if all you did was subdivide and sell, you could get favorable capital gains tax treatment. Kaneohe Ranch and a lot of the other owners didn’t build the roads and didn’t build the houses; they had third parties do that. A ruling from the Internal Revenue Service allowed a for-profit for the first time to sell huge amounts of property and get a favorable capital gains rate. This freed a lot of land for fee simple purchase by Hawai‘i’s citizens. It was a socially significant event.
Former Ala Moana Center GM Alice Flanders Guild, on the mall’s first tenants upon opening in 1959:
Morley Theaker was the GM of Sears, which was downtown between Young and Beretania Streets. There were all these satellite stores around it, such as Slipper House and Crack Seed Center. Lowell Dillingham approached Morley asking Sears to be the anchor tenant for Ala Moana. Sears was the logical choice because they were freestanding. At first, Morley didn’t want to move, and then he said, “Well, if I move Sears, you have to take all the little stores that surround Sears, because they will never survive if Sears moves!” He built that into the deal, and that is how all those small shops got into Ala Moana.
Retired business leader Stuart Ho on Chinn Ho’s financing of the Ilikai:
For my father, building the Ilikai apartment and hotel complex was the biggest milestone of his career. When it opened its doors in 1964, it was the world’s largest condominium. It also quietly changed the way business was done in Hawai‘i, with respect to the relationship between haole bankers and non-haole businessmen, and the threat of mainland bankers eyeing Hawai‘i. Dad signed a fixed-cost contract with Hawaiian Dredging to build a one-million-square-foot building for $14 million. The round numbers make the math simple: build a building for $14 per square foot; sell it for $29 per square foot. That meant a two-bedroom, 1,000-square-foot apartment would have to sell for an average of $29,000.
Sales were moving at a good pace, thanks to Canadians with sandy feet, but it was not enough to cover any foreseeable budget shortfall. Dad flew to New York City to discuss his troubles with his younger brother, Philip, a stockbroker with J.R. Williston & Beane. Uncle Philip introduced Dad to Ed Palmer at Empire Trust, and Palmer pointed him to what one would have thought was a very unlikely character, Samuel Silverman. Silverman was a suave, kindly, middle-aged gentleman who worked out of a townhouse at 20 East 65th Street with the sometime assistance of a secretary.
Sam Silverman was more than he appeared. He was a mortgage broker but he also originated complex financing for the Columbia University treasurer’s office. Sam was a money machine for Columbia. Dad discussed the Ilikai situation with Sam. Normally, a reasonable cost overrun would be covered by an extension of credit, provided that sales were progressing satisfactorily. But Sam’s New York City-educated nose smelled rats, or so he told me twice in later years. One was that Hawaiian Dredging would probably like to see a foreclosure on the Ilikai project. The second was a realization that local banks were reluctant for mainland banks to encroach on their domain; they were not eager for New York lenders to discover Hawai‘i as a place to make money.
Dad brought our entire family to greet Sam when he arrived at the old John Rodgers Airport. Sam disembarked resplendent in a white Panama suit and white shoes. When Dad invited Sam to a large cocktail party, Sam asked who would be there. “Pretty much everyone in Honolulu’s commercial and banking community,” Dad replied. Sam asked if he could bring a guest, and Dad said of course. Sam called the head of real estate at First National of Boston, a guy named King Upton, and invited him to fly to Honolulu, all expenses paid. Upton asked what he had to do. Sam replied, “Do nothing; just drink all the mai tais you want.” Upton came.
The party went something like this: Dad circulated, introducing Sam as his New York financial advisor, and Sam introduced Upton as head of First National of Boston’s real estate lending. Rudy Peterson, head of Bank of Hawaii from 1961 to 1963, was Dad’s lender. He observed from afar and as usual didn’t miss a thing. Rudy Peterson was one of my idols. He is the only CEO of a big bank (Bank of America 1963-1968) ever to answer his own phone without a secretary giving the caller the third degree.
After that party, credit was extended by Bank of Hawaii to my dad for the Ilikai project and it was built to huge success.
Former Honolulu City Councilman and state government executive Gary Gill, on his family’s acquisition on Palehua, the mountain above Makakilo:
My grandfather Tom Gill was an architect in Honolulu. He pooled his resources with my grandmother, and they built a number of little duplex apartments on their half-acre, creating a boutique hotel. Grandma would pick up people on Boat Day at Honolulu Harbor in her Model A and drive them to the Gill Apartments on Seaside Avenue.
Ultimately, my generation sold that property, which meant we had a small pool of money with no idea what to do with it except that maybe we should put it into some other land. I asked a friend who was an attorney for the Campbell Estate if he had any ideas. He said, “Well, we’re selling a mountain.” I said, “We don’t have that kind of money!”
But as it worked out, the Trust for Public Lands had raised public money and Ed Olson, a large landowner on the Big Island, became involved. My family threw in everything that we had from the sale of the Waikīkī property and our hui bought 7,000 acres from the Campbell Estate. The Ed Olson Trust has just under one-half of the acreage on the east side of Palehua Road, and Gill Ewa Lands, LLC has the western portion of the property along Nanakuli Ridge.
With a once-in-three-lifetimes opportunity that barely came together and serendipitous timing, we leveraged half an acre of Waikīkī into 1,600 acres of agriculture and conservation land in Wai‘anae.
Peter Ehrman of Dean Witter/Allstate and the company’s kiosks inside Sears stores:
When I first started in the business, Sears had just acquired Dean Witter and Allstate Life Insurance Co. They thought it would be a great idea to have little kiosks in Sears stores manned by an Allstate person and a Dean Witter person. My assignment was manning a shift at a kiosk at either Sears Ala Moana or Sears Pearlridge. Some days I’d sit all day and not talk to a single person. Other days someone with no experience with investing whatsoever might walk by looking for guidance. At the end of the conversation, they might tell me they had $250,000 that they had just inherited and wanted to invest. They would say all this standing next to the car batteries and tires at the auto section in Sears!
Most of the people who came in knew nothing about investing so it was a lot less intimidating for them to talk to a live person at a Sears kiosk than to make an appointment with a stranger and go into a high-rise in downtown Honolulu for a meeting.
I have clients today that I met at that Sears kiosk in 1984 and 1985. I remember when they could invest $2,000 or $5,000 or $10,000 a year. Today I see them retired with their houses paid off, having no debt, with financial security and millions of dollars in their portfolios. It has been very satisfying to have been a part of their success!
Author Speaks: Jane Marshall Goodsill, author of “Voices of Hawaiʻi: Life Stories from the Generation that Shaped the Aloha State,” will speak at an online event on March 11 at noon.
She says she will discuss collection techniques, cooperative engagement of interviewees, creative ways of presenting material, use of photographs, archiving and legal issues.
The Zoom meeting is open to the public. The meeting ID is 916 4862 3292, password 786918.
The event is sponsored by UH Mānoaʻs Hamilton Library, the Departments of Political Science, History and Ethnic Studies, and the Center for Oral History.