1 - American Memory

26
For all practical purposes, Hawaii's umbilical cord to the rest of
the world is surface shipping. Cut off or squeeze this lifeline and
Hawaii will wither. This is a cruel, unjust and unnecessary blow to
800,CMX) innocent bystanders.
The State of Hawaii presently depends on average of 18 scheduled
cargo vessels and 5 barges a month for almost every type of product
necessary to modern living. In the opposite direction, these ships and
barges carry our agricultural products to mainland markets.
In the short run we feel the lack of shipping from the west coast to
Hawaii immediately. In the long run, the inability to ship and sell our
products is even more damaging since our mainland customers are
tempted to turn to more reliable suppliers and their business is lost
to us forever.
In addition to scheduled carriers, it is true that Hawaii plays host
to numerous other ships, including cruise ships, unscheduled cargo
ships, petroleum carriers, military vessels and other freighters which
stop in Hawaii but do not discharge cargoes. Whether these unsched-
uled ships are operating is of some consequence—especially the petro-
leum carriers—-but in the history of west coast—Hawaii shipping
stoppages, these tramp steamers have not deeply affected the economy
or welfare of the State of Hawaii one way or the other.
Given this background, it is easy to understand the drastic and often
disastrous effects of shipping stoppages on Hawaii. Let me restate
what one of Hawaii's leading economists, Dr. Thomas Hitch, said to
us about Hawaii's prolonged shipping problems:
During past maritime strikes of 2 months or longer, the effects locally have
been a slowdown in construction: increase In unemployment and underemploy-
ment; declines in total personal income, retail trade and tourist arrivals; price
increases and business failures.
Thus, it takes a stoppage of only 2 months before the disastrous pat-
tern of unemployment and business failure becomes acute.
Naturally, Hawaii's business communitj' is the first segment of the
population to be hit when a shipping stoppage occure. During the
1971-72 strike, local merchants suffered sales declines ranging from
17 to 30 percent, with the drop in profits even more marked because of
extra inventory and transportation costs. Large businesses survived
but many smaller ones failed because they could not afford warehouse
space to stockpile goods or the increased cost of air transportation.
Every index of the economy shows the effect of these shipping stop-
pages. During the 1971-72 strike, a marked decrease in Hawaii's gen-
eral fund tax collections indicated the damage incurred by our busi-
nessmen. In the fiscal year ending June 1971, just before the strike
began, State tax revenues had increased 9 percent. During the next 5
months, during the strike and shortly afterward, tax revenues in-
creased only 2.8 percent. This is a 6.2-percent drop in tax revenues.
And the fiscal year ending June 1972 showed only a 4.4-percent in-
crease, half the previous year's gains.
Unemployment is another economic index which reflects the impact
of shipping stoppages. During the 1971-72 strike, Hawaii experienced
its second worst spell of unemployment in modern history—the worst
had occurred during the 177-day strike of 1949. In July 1971, the
number of unemployed in the State of Hawaii was at a rate of 5
percent. By November 1971, after the strike had been in effect 100