1 - American Memory

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nfTBODTTCnON
In the early spring of 1962, a survey completed at tbe reqnest of former GkiTer-
nor Quinn indicated that the people of Hawaii might face severe food shortages
because of the maritime strike in progress. Survey results indicated that a two
days' supply of rice and a seven days' supply of evaporated milk were in stock
in retailers' and wholesalers' facilities and on strike-bound ships in Honolulu
Harbor. Other food items were in somewhat better supply but nevertheless the
situation appeared grave. (See Appendix III for a complete list of the items
inventoried and their status.) The Governor was considering chartering shiiM
to carry critical supplies (in fact the above-mentioned survey included questions
which would enable the Governor's office to allocate the available space to normal
shippers).
It was in this environment that the Budget Session of the First Legislatnre of
the State of Hawaii passed House Resolution No. 100, which requested an investi-
gation into the cost and feasibility of either a state or privately-operated ware-
housing system on state lands on Sand Island. (See Appendix I for H.R. No.
100.)
A basic assumption underlies this resolution: That Hawaii is continually and
almost completely dependent upon a so-called "floating warehouse" system (and
therefore any interruption of shipping or unloading results in a disruption of
trade and commerce within the state and a resultant shortage of critical sup-
plies). The "floating warehouse" concept is taken to mean that Hawaiian bu^-
nessmen maintain little or no extra inventories—relying instead on a continual
replenishment of supplies from the mainland.
This study will consider this basic assumption, as its validity has obvioua
implications. If, in fact, local wholesalers and retailers are using Matson ships
as a floating warehouse, then some way may have to be found for increasing
stocks or assuring more dependable deliveries.
The major thrust of this study will be concerned with the possibility of a stock-
piling solution, if such Is necessary. In other words, extensive discussion of other
possible solutions, e.g. labor legislation or government intervention, will not be
undertaken.
Even before evaluating the "floating warehouse" assumption, we will Investi-
gate the impact of maritime strikes on the State of Hawaii. Superficial question-
ing by the author indicated that no one was really hungry during the 1962 strike.
Thus it seems important to determine if there really Is a problem or whether
public sentiment was unduly ak-oused about the graveness of the situation.
FINAL EVALUATION OP THE FB^ASrBILITT OF A STOCKPILING FBOORAM
(AN INTEGRATING SDMMABY AND CONCLUSION)
The basic thrust of this study has been to investigate the feasibility of the
State of Hawaii encouraging or subsidizing tbe building of stockpiles as a
hedge against the impact of maritime strikes.
Consumers Interested in Stockpiling
The supporters of Rouse Resolution No. 100 correctly read the "pulse" of
voters with respect to their interest in assuring adequate food supplies during
strikes. Seventy-two per cent of those interviewed in the consumer survey con-
ducted as part of this study thought that it was a good idea for the state to
stockpile foods to make sure there would be adequate food supply during any
strike.
Consumers Not Interested If Stockpiling Too Costly
When the Impact of higher inventory costs on prices was mentioned, however,
interest dropped noticeably. In response to the question—"Would you still be
interested If it caused a regular .5 per cent increase in your prices?"—only 40
per cent were still interested and only 14 per cent were still interested If It
caused a regular 10 per cent increase In their prices. In other words, Hawaiian
housewives have a tolerance level—they feel prevention of shortages due to
strikes can become too expensive. It seems probable that consumer support for
a stockpiling program would dissipate if they knew the present and potential
costs of carrying extra Inventories and their impact on consumer prices.
Inventories Already Large Where Feasible
House Resolution No. 100 contemplated building stockpiles on the assumption
that Hawaiian businesses were using Matson ships as "floating warehouses" and
therefore not carrying their own stocks. But as we have seen, a "floating ware-