Hackfeld, Heinrich

Introduction

H. Hackfeld & Co. of Honolulu was one of a number of German mercantile businesses founded in Melanesia and Polynesia during the nineteenth century.[1] The company was a Pacific Ocean outpost of the Hanseatic port city of Bremen: its ship’s flag was a red Hanseatic cross on a white background.[2] Throughout its first seven decades the firm retained strong links with Bremen and North Germany. Initially the main focus of the firm’s business was both indirect and direct involvement in the North Pacific whaling industry. After the demise of this industry, at the beginning of the 1870s, the firm shifted its focus to another part of its business, the provision of factoring services to the Hawaiian sugar industry. By the time of the incorporation of Hawaii as a United States Territory in 1900 the firm was one of a small group of sugar factors that dominated the islands’ economy. Most of its senior executives were recruited as young men from Germany. After the dissolution of the H. Hackfeld & Co. by the Alien Property Custodian in 1918 and the transfer of its assets to a successor company, American Factors, the firm’s links with Germany were severed. However, as a member of the “Big Five,” American Factors was among the most dominant companies in the Hawaiian economy for several decades after Hackfeld’s death.

Family Background

Heinrich (Henry) Hackfeld was born on August 24, 1816 in Almsloh, a village in the parish of Ganderkesee, in the Grand Duchy of Oldenburg.[3] Very little is known about his early life. He eventually became part of the Bremish mercantile elite, but was atypical in that he came from a humble background.[4] He was the fifth child of Hinrich Hackfeld and Anna Catharina Fastenau, who were both Lutherans. His father was a heuermann, a hired hand or day laborer.[5] Hackfeld had two brothers and two sisters who lived to adulthood. He also had a brother and a sister who died in infancy before he was born. Hackfeld’s father died when he was only eight years old. At the age of sixteen Hackfeld went to sea in Amsterdam. He used his Seemansverdienst (seaman’s earnings) to further his education, in particular at the Steuermannschule (Seafarers School) in Bremen.[6]

As a ship’s boy and later as a young sailor Hackfeld traveled all around Europe, including three visits to the Russian port of Archangel. His ship’s book, a record he kept of his voyages, reveals he sailed on a number of different ships and, among other trips, crossed the Atlantic to the American ports of New York, Baltimore and Charleston. He eventually acquired native speaker–level proficiency in English, but it is not known how or when he first learned the language.

On April 5, 1838, Hackfeld married his first wife, Meta Fuhrhoff, in Bremen. She died the following year on January 5 in childbirth. Their son died the same day unnamed and unbaptized. Later in 1839 Hackfeld sailed as first mate of the Express, a 160-ton brig based in Bremen, and traveled to South America for the first time. This trip was arranged thanks to shipbroker Georg Friedrich Pflüger of Bremen, who would become an important figure in Hackfeld’s life.[7] In 1842 Hackfeld became master of the Express, and its co-owner with Johann Heinrich Heidorn, a partner in the Bremen shipping company J. A. Graesers.[8] On later voyages he captained the Express and traveled to Gibraltar and Málaga before making his first major voyage to St. Thomas (in the Virgin Islands) and Maracaibo, Venezuela. The Express was apparently the first ship from Bremen to visit the latter. From Maracaibo he sailed back to Hamburg and then embarked on another major voyage to the Mexican ports of Valparaiso and Mazatlán. He was unable to deliver his cargo in Mazatlán because of the prevailing unrest caused by a war in Mexico. So the ship sailed to Honolulu instead from where it returned to Mazatlán, this time with food for the British warships anchored there, for which Hackfeld earned a lot of money. From Mexico the Express sailed with a cargo of 900 quintals of scented wood, 19,971 Mexican dollars, 49 bars of silver, 92 pieces of silver bullion, and 823 ounces of gold valued at $80,000 (or $2.38 million in 2010 dollars) bound for Canton (Guangzhou) in China via Valparaiso and Honolulu.[9]

However, on October 8, 1845, the vessel was shipwrecked on a voyage from Mazatlán in Mexico to Canton during a heavy north-east gale, which had begun the previous day, in the Bay of Mañanïoy on the eastern side of the Philippine island of Batan. The supercargo (a man employed on board by the owner of cargo carried on the ship), Eduard (Edward) Vischer, belonged to the German merchant house, Kayser, Hayn & Co. of Mazatlán and Acapulco. (Vischer later became a noted Californian painter and photographer.) The ship was damaged beyond repair, but the cargo, Hackfeld, and all ten men, including the supercargo, were saved by the timely assistance of the people of San Carlos. All of the currency and bullion was saved apart from a few pieces of silver, 76 dollars and part of the scented wood. The wood was subsequently washed away by the tide. On November 19 a British naval survey ship, H.M.S. Samarang, unexpectedly arrived at San Domingo, Batan, and taking into consideration the absence of any other authority, immediately took measures to secure the salvaged cargo. A contract had already been agreed with a Spaniard for Hackfeld, his crew, and supercargo to be transported to Manila on a native vessel. However, this vessel was found to unfit and unsafe. The Bremeners were instead conveyed to Manila on the Samarang.[10] Hackfeld returned home from Canton to Bremen via Honolulu.[11]

Hackfeld was now without a command and had lost his investment in the Express. Hackfeld does not appear to have ever commanded a ship himself again after the loss of the Express. During the next two years Hackfeld traveled across the Pacific trading goods, in some cases on consignment, in an effort to rebuild his capital. In January 1847 he wrote a letter from Hong Kong to the Bremen trading and shipping house, W.A. Fritze & Co., in which he pointed to the great opportunity in the Hawaiian Islands for trade in the Pacific Ocean and with America and China and offered to act as the firm’s representative in Honolulu. The company did not respond to his proposal and so he decided to found his own trading and shipping business.

Business Development

By February 1848 Hackfeld was in a position to purchase the 156-ton Hawaiian brig Wilhelmine, a decommissioned British naval ketch (formerly H.M.S. Basilisk) which had been refitted and modified to serve as a trading vessel. A captain named Thomas Rossum lent Hackfeld half the purchase price of $7,000 (or $200,000 in 2010 dollars) which included mast spare rigging and one set of sails. The Wilhelmine left Honolulu that same month, under Rossum’s command, bound for Hamburg via Mazatlán and Guayaquil, with Hackfeld on board. Hackfeld’s brief sojourn in Germany combined business and family commitments: he was able to pay off Rossum’s loan, and on September 22 he married Marie Pflüger, the daughter of his business associate Georg Friedrich Pflüger. The couple did not have any children.[12]

On November 22 Hackfeld set sail on the Wilhelmine from Hamburg to return to Honolulu, stopping at Lisbon, Valdivia (Chile), and Tahiti. He was accompanied by his new wife, his sixteen-year-old brother-in-law, Carl Pflüger, and a twenty-year-old nephew, Bernhard Friedrich Ehlers. The Wilhelmine was under the command of Captain Herman Schriever, who brought it into Honolulu harbor on September 26, 1849. The Wilhelmine was sold to James Makee, a Honolulu merchant, sometime before the end of 1849.[13]

Hackfeld had brought with him to Honolulu a small cargo of goods which he placed in a wooden building on Queen Street, in which Charles Barstow had a store. The goods included various items of clothing, stationery, crockery, and kitchenware. During the next few weeks he acquired the store from Barstow. Larger importations of merchandise soon became necessary.[14] Hackfeld had had the good fortune to found his business during the California Gold Rush of 1848–1855. There had been a glut of imported merchandise in Hawaii during the previous year caused by a temporary contraction of whaling ship visits. However, from late 1848 there was a surge in demand in Hawaii from gold prospectors in California for the transshipment of all kinds of merchandise, including many of the items Hackfeld had brought with him from Germany. There was also a reverse migration of prospectors to Honolulu to spend the gold they had obtained in California.[15] Alexander Pflüger suggests that the patronage of these prospectors gave a major boost to the firm’s daily turnover.[16]

In its first decade the firm derived a significant proportion of its income from the North Pacific whaling business and Californian gold prospectors. In the early years the firm also developed strong links with the Russian empire and the k ingdom of Sweden and Norway. This is not surprising because nineteenth century Bremen was an entrepὂt—up to a third of the city’s exports comprised of re-exports to Scandinavia and Russia.[17] The firm supplied the whaling ships with everything they needed, including food, timber, and sailcloth. It also acted as agents for some of the Honolulu based whaling vessels, of which there were 18 in 1858; it bought and fitted out vessels, and purchased cargoes of oil and whalebone, which were transshipped to Europe by ships used by the firm for importing merchandise.[18] Alexander Pflüger observes that it is little wonder the firm’s profits rose so quickly.[19] However, the whaling industry in the north Pacific peaked in the early 1850s. The number of whalers visiting the islands declined from 275 in 1852 to 132 in 1860, as did the amount of whale oil and bone harvested.[20]

In the early years of the business Hackfeld and Carl Pflüger were also assisted by Hackfeld’s younger brother, Johann (John) Hackfeld, and Carl’s older brother, Georg Friedrich Pflüger (Junior). The younger Georg Friedrich Pflüger came to Hawaii in 1850 and was to be employed by the firm until 1870.[21] Two years later another Pflüger brother, Johann (John), immigrated to Honolulu to become an employee of the firm after a half-year voyage on a whaling ship to the Cape Verde Islands and the “Robinson Crusoe” Juan Fernández Islands.[22] In 1853 Carl Pflüger became a partner in the firm, with a one-third share, and it was renamed H. Hackfeld & Co.[23] Carl became known by the nickname “Kale,” the native Hawaiian pronunciation of his name. In addition to wholesaling Hackfeld also developed an interest in retailing. During 1850 he formed a short lived partnership with Lyman Swan and Ornan Clifford, who owned a retail store on the corner of Fort Street and Broadway. This venture provided Hackfeld with experience that he put to use in 1852 when he opened a new branch store for the retail trade on Fort Street. (Later, in April 1862, the store was acquired by Hackfeld’s nephew Bernhard Ehlers and renamed B.F. Ehlers & Co.)[24]

Hackfeld quickly diversified into new categories of business including the import of lumber from Puget Sound.[25] By 1855 Hackfeld had acquired the agency for the Puget Mill Co. In the mid-nineteenth century a reliable agent could take some of the risk out of transoceanic trade for a commodity producer by overseeing the marketing of their goods in distant markets. Lumber was imported from Puget Mill Co.’s Teekalet Mill in Oregon and also from the many other sawmills in the Pacific Northwest it established during the next sixty years.[26] He also developed a close relationship with Dr. Robert W. Wood, a physician who was also a businessman, for example shipping sugar and molasses from his plantation to San Francisco. In July 1853 Wood asked H. Hackfeld & Co. to act as agents and shippers for the Koloa Plantation, and then, soon after that, the East Maui Plantation. H. Hackfeld & Co. moved into Wood’s store on Queen Street.

William A. Simonds notes in his history of H. Hackfeld & Co. and its successor, American Factors, that the firm was among the earliest of the Hawaiian sugar factors. Put simply, factorage consisted of providing a variety of financial and commercial services that enabled plantation owners to focus on their core business of cultivating and processing sugar cane. Koloa plantation on the island of Kauai was the oldest sugar plantation in the Hawaiian Islands. It had been founded in 1835 by three New Englanders. Shortly after Hackfeld established his business in Honolulu, Wood had acquired full control of the plantation. The following year, 1849, Wood became involved in the development of a new sugar plantation at Makawao on the island of Maui, which he and his partner, Ambrose H. Spencer, named the East Maui Plantation.[27] H. Hackfeld & Co. provided shipping and commercial services to the two sugar plantations, both of which were located in isolated parts of the islands and required commercially experienced agents located in the port of Honolulu to act on their behalf. Initially, the firm proved to be particularly useful in the arrangement of the overseas shipping of the roughly processed sugar. In the mid-nineteenth century sailing ships took many weeks to reach their destinations. H. Hackfeld & Co., based in Honolulu, was well-placed to manage all of the shipping issues and also all of the other commercial transactions, such as insurance, required for the operation of a successful plantation.

By the early 1860s the firm was Hawaii’s leading sugar agency, shipping sugar on behalf of three of the kingdom’s five sugar plantations. In 1863 it shipped 781 tons of sugar representing about 30 per cent of the total exported from Hawaii.[28] The provision of extensive credit facilities became essential to finance the establishment, harvesting and marketing of the sugar crop. The plantations required such large cash advances before the sugar was marketed and payment had been received that their harvest usually belonged to the firm by the time it reached the sugar mill. Planters frequently overestimated revenue and underestimated costs. It was not uncommon for agencies such as H. Hackfeld & Co. to borrow money in Honolulu or San Francisco and lend it on to the planters so that they could remain solvent.^[29]

Another important part of the firm’s business during its early development was trade with Russia’s Pacific territories, which was foreshadowed by a consignment of goods sent to Petropavlovsk, Kamchatka, in 1852.[30] The following year Dr. Wood turned over to the firm the commercial agency of the Russian government. As a result the firm gained the business of supplying Russian ships, in particular those calling at Honolulu from Russia’s far eastern region of Kamchatka.[31] Wood also secured for the firm the valuable agency of the Russian American Company which was based at Novo Arkhangelsk (later known as Sitka) in Russian North America. Hackfeld imported various products from the company, in particular salted salmon.[32]

By the mid-1850s the business was well-established enough for Hackfeld to return to Bremen in May 1855 for a prolonged period to explore new business opportunities. He left the business under the management of Carl Pflüger.[33] While he was away H. Hackfeld & Co. opened a new store in July 1856 in a 2 story brick building on Store Street which had just been erected by Dr. Wood.[34] Johann Hackfeld moved into the old store on Queen Street where he engaged in general merchandizing for several years before retiring to Bremen. His brother Heinrich returned to Honolulu in March 1857.[35] His return allowed Carl Pflüger, who was debilitated by hard work, to go on holiday to Germany in order to recover, traveling via Manila, Hong Kong and Egypt to Bremen. While he was back home his friend, Christian Geerlen, introduced him to his sister, Anna Elisabeth. They were subsequently married on July 15, 1858. After a honeymoon in Bad Salzbrunn in Silesia, Pflüger returned to Honolulu with his wife in the autumn of 1858 arriving back in Honolulu on January 1, 1859.[36] By the late 1850s the firm had grown to a size which meant it had to recruit employees from outside the Hackfeld and Pflüger families. From this point onwards young men with a professional training were recruited from Bremen to join the firm in Honolulu. Johann Bollmann was the first. He was an accountant by training and joined the firm in September 1858 aged 21.[37] Among other achievements, Bollmann helped the firm further develop its sugar interests on the islands of Kauai and Maui through the acquisition of the agencies of a considerable number of plantations including Lihue, Grove Farm and Lahaina. This provided the foundation for the firm’s subsequent expansion.[38] There are similarities between the internal management of H. Hackfeld & Co. and the firms founded by Bremish merchants in New York City and Baltimore.[39]

After Hackfeld returned to Honolulu in 1857 from his trip to Bremen he established a line of packet ships connecting Bremen and Honolulu. With the exception of an occasional chartered ship, a fleet of ships was especially built for this service and registered in Hawaii. Some of these ships were later temporarily reassigned to the whaling industry and Russian trading service. The firm also acted as agents for various steamship shipping lines. Initially from 1867 and 1872 it represented a number of short-lived lines on routes to California and Australasia. In 1872, as agents for the last of these lines, the United States, New Zealand, and North Pacific Transportation Co., the firm suffered from the repercussions of a breakdown of the line’s relationship with the Hawaiian government. The following year this shipping line was acquired by the Pacific Mail Steamship Company and the firm became its agents. But rivalry between H. Hackfeld & Co. and Claus Spreckels resulted in the latter’s Oceanic Steamship Line taking over Pacific Mail’s monopoly of the freight and passenger traffic between Honolulu and San Francisco in 1884. The following year Oceanic together with the Union Steamship Co. of New Zealand also took the colonial mail contract for the Australia-New Zealand-Hawaii-California route from Pacific Mail. In return Spreckels appears to have agreed to let Hackfeld control shipping between Hawaii and the Far East. Thus in 1888 H. Hackfeld & Co. acquired the agency for Occidental & Oriental Steamship Co., followed in 1899 by the agency for Toyo Kisen Kaisha Steamship Co. After the demise of Spreckels’ business interests in Hawaii, Hackfeld regained an agency for the route between Honolulu and San Francisco in 1900, this time for the new Hawaiian-American Steamship Co.[40]

In June 1862 Heinrich Hackfeld left Honolulu with his wife on an extended tour of Europe leaving his business in the care of Carl Pflüger.[41] Hackfeld subsequently decided not to return. He instead settled first in Hamburg, and subsequently Bremen, where he managed the increased wholesaling business interests of H. Hackfeld & Co. in Europe.[42] Although the whaling industry had peaked in the 1850s, the firm remained involved in the industry throughout the 1860s. For example, after his return to Germany in 1862, Hackfeld employed a fellow Bremen sea captain, Eduard Dallmann, with experience of the Bering Sea whaling industry, to oversee the construction of a new brig, W.C. Talbot, in a Bremen shipyard. Hackfeld planned for Dallmann to use it for trading voyages to Russian North America and Chukotka. Dallmann made two successful trips in 1864 and 1866. In late 1866 Dallmann was sent back to Bremen to oversee the construction of a new whaling ship, the Count Bismarck, which was launched in May 1867. Dallmann made two successful trading voyages to the Arctic in this vessel in 1869 and 1870. Dallmann left the employ of Hackfeld in 1871 after handing over the Count Bismarck in Le Havre to a new owner.[43]

The American Civil War had a deleterious impact on the portion of the North Pacific whaling fleet that was based in New England. The Hackfeld firm’s whaling interests suffered a setback in the spring of 1865 when the Shenandoah, a Confederate cruiser, raided the New England Arctic whaling fleet off Ascension Island (now known as Pohnpei) and destroyed several whaling ships including the Harvest. Heinrich Hackfeld together with two other investors had acquired the ship in 1862 from a New Englander. The Harvest had already undertaken two voyages for the firm, and at the time of the raid was flying the Hawaiian flag and was crewed by native Hawaiian sailors. The captain of the Shenandoah, however, later claimed he lacked proof that it was truly Hawaiian-owned. The Shenandoah decided the Harvestwas American and thus subject to the same fate as the New Englander whalers. Before burning the ship the Shenandoah’s captain stole its cargo of whale oil and bone, supplies, and instruments; the Hackfeld firm estimated that its losses totaled $75,000 (roughly equivalent to $1.4 million in 2010 dollars). The Shenandoah sailed to South America where it sold the oil from the Harvest, allowing it to refit and sail to Liverpool where the ship was surrendered to the British authorities. In 1873 the British government paid the United States £3,000,000 compensation for allowing the Confederate government to purchase ships in England that raided Union ships and for letting its raiders use British ports. The money was used to compensate American ship owners for their losses. But the owners of the Harvest received no compensation because it was not an American-registered ship.[44]

The whaling industry recovered from the mid-1860s after the conclusion of the American Civil War, although by 1869 the number of vessels visiting the Hawaiian Islands was only 46 as compared with 132 in 1860.[45] The whaling industry ceased to be significant after a major catastrophe in the winter of 1871 when the Arctic Circle prematurely froze over and 33 ships of the North Pacific whaling fleet were irredeemably lost, trapped in the ice sheet north of the Bering Strait. The industry never recovered from this disaster. In 1878 H. Hackfeld & Co. acquired another whaling vessel, the Lolita, which participated in the 1878 and 1879 seasons; in the latter one its cargo was confiscated by the Alaskan authorities. The following year marked the last season in which Hawaii participated in the industry.[46]

The relationship between the firm and the Russian government was strengthened in early 1862 with the appointment of Carl Pflüger as the Russian empire’s vice-consul to the kingdom of Hawaii, a position he held until 1872. Members of the firm served in succession as vice-consul until 1907, including Carl Pflüger’s brother Johann from 1872 to 1886.[47] The firm used the relationship to diversify into trade in furs and other products from the Russian Arctic. In 1863 H. Hackfeld & Co. opened a trading store at Petropavlovsk. Johann Pflüger was appointed the manager. Bollmann joined him in the role of assistant manager in 1865. Bollmann had been supercargo for a consignment of sable furs on the bark Domitila from Petropavlovsk to St Petersburg the previous year.[48] By 1866, H. Hackfeld & Co. together with the Russian American Company and an American firm controlled the fur trade of Kamchatka. However, a visitor to Petropavlovsk noted that unlike the agents of the other two houses, Pflüger engaged in much more than just the fur trade: “He salted salmon for market, sent a schooner every year into the Arctic Ocean for walrus teeth and mammoth tusks… sold goods, [and] kept a dog team.”[49] In 1866 Pflüger, with the assistance of two men and a few native women, salted 600 barrels of locally caught salmon which were sent to Honolulu and sold at a great profit. Apparently the return from this consignment was much greater than that from the trade in Siberian sable fur in which he had been engaged during the previous three years.[50]

In 1867 the United States acquired Russian North America. The Russian American Company’s assets in America’s new Alaska Territory were acquired by Hutchinson, Kohl & Co. of San Francisco. H. Hackfeld & Co. made an attempt to secure a share of the Russian company’s former trade in furs. In December 1868 Johann Pflüger opened a branch store at Sitka in Alaska for seal and walrus hunters in premises acquired by Bollmann. The branch was not a success and H. Hackfeld & Co. had withdrawn from Sitka by the time of the census taken by the United States Army in October 1870. Carl Pflüger also led an expedition in 1868 to the Pribilof Islands, which were part of Alaska, believing he would find them unoccupied, but found Hutchinson, Kohl & Co. and another American party had got there first. The Americans eventually forced Pflüger to withdraw. During the same year the Russian-American Company abandoned the management of the Komandorski Islands which were part of Petropavlovsk district and the local Russian official declared all of the indigenous people were free men and that their liberties included the right to hunt fur-bearing animals. This resulted in a number of merchants, including Carl Pflüger, bringing all kinds of trade goods to exchange for pelts. A subsequent American government report noted that the outcome was the reckless slaughter of the local fur-bearing animals. Order was restored in 1871 when the Russian government leased the islands to Hutchinson, Kohl & Co.[51]

After Hackfeld’s return to Germany the management of the Honolulu firm passed to Carl Pflüger. By 1867 Carl Pflüger was suffering from severely affected health, as had been the case ten years before. He traveled with his family to Bremen to recuperate and then returned to Honolulu in the autumn of 1868 with redoubled energy.[52] While Pflüger was away Bollmann acted as manager of the firm, as well as the acting Russian vice-consul, from April 1867 to the autumn of 1868. (Bollmann left the firm around 1870 and returned to Bremen where he died aged only 35 in 1873.)[53] In December 1871 Pflüger arranged for Dr. Wood the sale of the Koloa Plantation to Paul Isenberg.[54] From the age of 14 Isenberg had served a four-year agricultural apprenticeship on a farm near Hanover, followed by two years as manager of another farm in the region. Isenberg immigrated to Hawaii in 1858 and one of his first new acquaintances was Heinrich Hackfeld. Isenberg had subsequently been employed as a sugar plantation manager. While on a visit to Germany in 1869, he was introduced by Hackfeld to Wobetha (Beta) Glade, who became his second wife. Glade’s older sister, Anna Dorothea, had married Hackfeld’s nephew, Bernhard Ehlers, earlier in the decade.[55] A third sibling, Conrad Glade, had immigrated to Honolulu in 1860 and been associated with the firm since at least 1862.[56]

In 1871 Pflüger decided to place the firm under the management of Conrad Glade and Eduard Fürstenau. Its capital was reorganized so that Hackfeld and Pflüger each held a third and the two new partners one sixth each.[57] It subsequently became a tradition at the firm to incentivize young employees by providing them with a share of the business.[58] The following year Carl Pflüger left the islands to reside in Bremen, where he joined Hackfeld in establishing a firm of the same name around 1874, which represented the Honolulu firm in Europe.[59] Pflüger also served as Hawaiian Consul-General in Bremen.[60] Conrad Glade succeeded Pflüger as the first non-family member as manager of the Honolulu firm.[61] Glade and Fürstenau’s lack of experience led to problems with the management of difficult sugar plantations. Alexander Pflüger observes this required his father, Carl Pflüger, to make two subsequent visits to Honolulu, one in 1874 and another particularly urgent one in 1880–1881 to counteract an emerging business rival, Claus Spreckels. Fürstenau retired from the firm in 1878 and returned to Bremen the following year.[62]

The Hawaiian government negotiated a reciprocity treaty with the United States in 1875 whose provisions included the removal of the American tariff on imported raw cane sugar. The San Francisco sugar refiners opposed the treaty. Carl Pflüger visited California in fall 1875 on behalf of the Hawaiian sugar agencies to negotiate with Claus Spreckels, the leading California sugar refiner. Pflüger said the Hawaiian sugar agencies would only sell the 1876 crop to the San Francisco refineries if they agreed to withdraw their opposition to the treaty. Spreckels secured the desired outcome.[63] After the ratification of the treaty in 1876, the Hawaiian sugar industry increased its production by expanding cultivation into semi-arid regions of the islands. This demanded new large-scale irrigation projects, and the Hackfeld firm prospered by lending financial assistance to many new plantation enterprises.[64]

A labor shortage had emerged from a very early stage in the development of the sugar industry. In the first decades, H. Hackfeld & Co. had little direct involvement with this problem. By the 1870s, however, the firm was actively involved in the recruitment of foreign contract labor for the sugar plantations. An 1886 Hawaiian government report records that in 1869 the firm brought 20 Chinese workers to Hawaii from Hong Kong and 42 Chagos Islanders from Danger Island, and the following year 61 Chinese workers from Hong Kong.[65] In 1868 a Swedish correspondent had suggested to Johann Bollmann the possibility of recruiting several hundred peasants from the north of Sweden. The Hawaiian Board of Immigration rejected the proposal because it was felt Swedish peasants would be unsuitable. Portuguese and Japanese workers subsequently became the favored alternative.[66]

H. Hackfeld & Co. won the initial Hawaiian government contract to transport Portuguese migrants to Hawaii and brought the first group from Funchal to Honolulu on one of its ships in 1877. However, a British firm won a contract to arrange the migration of further Portuguese contract workers during the period 1878–1888. H. Hackfeld & Co. was more successful in ensuring that almost all of the German migrants during the period 1881–1897 traveled to Hawaii on its ships. It had received permission in November 1880 to recruit German migrants from the Hawaiian Board of Immigration on the same conditions as the Portuguese. In order to facilitate the implementation of the project and at the request of the firm, one of its partners, Paul Isenberg, was appointed the board’s agent in the German empire. The first four and the last two groups of German contract workers (1881–1884, 1897) were assisted financially by the Hawaiian government. All of the other groups were brought to the islands entirely at the expense of H. Hackfeld & Co. or the sugar planters.[67] Ronald Takaki, the social historian, observes that the German migrants followed a pattern similar to that of other ethnic groups recruited for the sugar plantations. While many settled in the islands at the expiration of their contracts, many of them also left to seek alternative employment in the United States. [68]

The demand for agricultural workers grew larger after the rapid expansion of the industry following the signing of the Reciprocity Treaty. In 1882 an industry association was formed, the Planters’ Labor and Supply Company (P.L.S.C.)—renamed the Hawaiian Sugar Planters Association (H.S.P.A.) in November 1895—with H. Hackfeld & Co. one of the founding members. Previously the industry had recruited Chinese workers as field laborers but they preferred to seek urban employment at the earliest opportunity.

The firm’s dominant role in German migration in this period was not unrelated to Isenberg’s dual role as the official agent for the immigration board in Bremen and as manager of H. Hackfeld & Co.’s Bremen office.[69] Isenberg built on the work of Carl Pflüger who had successfully promoted German emigration to Hawaii after his return to Bremen.[70] The emigration facilitated by the firm attracted the attention of opponents of German emigration in the Reichstag, in particular the progressive deputy, Friedrich Kapp.[71]

The new plantations’ dependence on imported labor also required further infusions of capital, and this soon led to the demise of the small sugar planter. Before the treaty, most plantations were led by independent managers who were often also the owners. After the treaty, the “once powerful manager” would be gradually transformed into an employee of one of the sugar factors. Historian Edward D. Beechert observes that by 1900 “the factors would come to control the industry completely.”[72] During the decade and a half following the ratification of the treaty H. Hackfeld & Co. was one of the three largest sugar factors in Hawaii by number of sugar plantations represented and by value of these enterprises, the other two being the British-owned Theo. H. Davies & Co. and W.G. Irwin & Co., which was controlled by Claus Spreckels.[73] The annual sugar tonnage shipped by the Hackfeld firm more than doubled from 4,617 tons to 11,270 tons between 1875 and 1882.[74] This represented 36.8 per cent and 19.7 per cent of the total shipped by the industry in 1875 and 1882 respectively.[75] The firm represented 20 plantations by 1882.[76]

The firm reentered the retail business in 1878 with the acquisition of a half share in B.F. Ehlers & Co. Bernhard Ehlers had returned with his family to Germany in 1874.[77] Ehlers’ nephew, August, became a partner in the firm in 1878.[78] The store appears to have gone bankrupt in January 1885 and the partners, including H. Hackfeld & Co., assigned all of its property and claims to Heinrich (Henry) Schmidt, the manager of H. Hackfeld & Co. at the time, and G. W. Macfarlane, who settled with the San Francisco creditors for 70 cents on the dollar.[79] August Ehlers appears to have reacquired the business from the assignees. He resold the business to H. Hackfeld & Co. in the mid-1890s and returned to Germany.[80]

In 1881 Heinrich Hackfeld invited Paul Isenberg, his nephew Johann (John) Friedrich Hackfeld, and Heinrich (Henry) Glade to enter the firm as active partners. Heinrich Hackfeld, Carl and Johann Pflüger became special partners. Heinrich Hackfeld transferred a half interest in his firm to Paul Isenberg, and from 1881 until his death Isenberg was regarded as the head of the Honolulu firm.[81]Johann F. Hackfeld, the son of Heinrich’s brother Hermann Wilhelm, had been born in Grüppenbühren, Oldenburg, in 1856. He was educated at the Realgymnasium in Bremen and took a commercial apprenticeship there. He had immigrated to Honolulu in 1877 and become a clerk in his uncle’s firm. Heinrich Glade, the younger brother of Conrad, was also a native of Bremen, where he had been born in 1844. At the age of 18 he began an apprenticeship at a large cotton importing house. After four years at that concern he spent two years at a similar concern in Liverpool, England. He then returned to Bremen where he established himself as a cotton broker. Isenberg and Hackfeld persuaded Glade to immigrate to Hawaii the following year and join the firm as a partner.[82] Carl Pflüger died unexpectedly on October 5, 1883 at the age of 50.[83] Heinrich Hackfeld withdrew from the Honolulu firm in 1886 and continued as sole proprietor of the Bremen firm until his death on October 22, 1887, after which it was dissolved.[84]

Conrad Glade retired as manager in 1883 and returned to Germany.[85] He was succeeded by Heinrich Schmidt.[86] Schmidt had been born in Bremen in 1846. Early in his career he met by chance a member of the Hackfeld firm and was engaged as a bookkeeper. But his services were not needed at once and so he was employed by the Bremen firm who were Hackfeld’s agents in Germany before the mid-1870s. In 1867 he immigrated to Honolulu and became a bookkeeper at H. Hackfeld & Co. He was subsequently promoted several times becoming in turn salesman and cashier until eventually his knowledge and business ability became so valuable to the firm that in 1878 he was admitted as a partner replacing Eduard Fürstenau. Meanwhile Schmidt saved the capital required to found his own business. He left the firm to do this in 1889.[87] Schmidt was succeeded as manager by Heinrich Glade.[88] In 1893, while Isenberg was in Germany, Glade offered to sell a plantation on the island of Hawaii to Theo. H. Davies & Co. Theo. H. Davies had accepted the offer. The plantation had been acquired by the firm in 1890 and proved very expensive to develop. However, Isenberg was infuriated when he discovered what Glade had done. Unbeknownst to Glade the plantation was well-suited to a new variety of sugar cane. The following year on his return to Honolulu Isenberg honored the agreement but forced Glade to resign.[89] Glade sold his one-third interest in the firm for $150,000 to Isenberg and to Johann F. Hackfeld. Isenberg and the younger Hackfeld now each owned half the firm.[90] Glade was succeeded as manager by Wilhelm (William) Wolters, another immigrant.[91]

In 1890, at the instigation of George N. Wilcox, a friend of Paul Isenberg, to whom H. Hackfeld & Co. had lent money in the 1860s to develop the Kauai sugar plantation, Grove Farm, the firm diversified into fertilizer production by securing an interest in the Laysan Island guano beds. It secured a lease of the property and then sent vessels to bring the guano down to Honolulu. A settlement was established and a number of men were sent to the island to prepare the fertilizer for shipment. Initially the fertilizer was handled in its crude state but it was soon realized that it must be chemically prepared for the soil and efforts in that direction were begun. The services of Dr. Wilhelm Averdam, an experienced German chemist, were secured and he directed many of the plans which were subsequently implemented. In the second half of 1893 H. Hackfeld & Co. and Wilcox organized the Pacific Guano & Fertilizer Co. The company oversaw the construction of a large processing plant together with warehouses at Kalihi on the island of Oahu which were completed in early 1895. The demand proved to be greater than the firm could supply and the capacity of its works was doubled.[92]

During the first half of the 1890s the firm was also instrumental in the establishment of the P.L.S.C.’s Experiment Station. In 1892, Johann F. Hackfeld, together with the other two members of the Fertilization Committee of the P.L.S.C., recommended the establishment of an experiment station with a laboratory and the employment of a chemist. This recommendation was accepted at the annual meeting of the P.L.S.C. in January 1894. The firm’s representative at the meeting, Heinrich Glade, said in the discussion which followed, that the subject of the experiment station was so important that it should not be mixed up with anything else. Appropriate actions were taken which led to the establishment of the experiment station the following year.[93]

The 1890s was a period of economic and political upheaval in Hawaii. The American McKinley Tariff Act of 1890 abolished the duty on foreign sugar, replacing it with a bounty for domestic sugar producers. This disadvantaged the Hawaiian sugar industry which had enjoyed duty-free access to the American market since 1876. The value of Hawaiian sugar fell by nearly half. The crop of 1889 had sold at $108.10 per ton (or $2,640 in 2010 dollars). The crop of 1892 was sold at only $55.20 per ton (or $1,360 in 2010 dollars). In 1893 the Hawaiian monarch was overthrown by businessmen who favored the annexation of the islands by the United States. Initially they were unsuccessful and instead formed a republic in 1894. During this year the Wilson-Gorman Tariff Act reinstated the sugar tariff and abolished the bounty, restoring the status quo. The annexationists achieved their objective in 1898. Two years later Hawaii was incorporated as America’s second non-contiguous territory, following Alaska.[94]

In December 1897 the firm was incorporated under the name H. Hackfeld & Co. Limited. The sugar tonnage shipped by the firm was 46,259, 18 per cent of the total shipped by the industry as a whole and four times that of 1882. Paul Isenberg was elected president and Johann F. Hackfeld, vice-president. William Wolters continued as manager with the new title of managing director.[95] The firm took a considerable interest in coffee cultivation at this time on the island of Hawaii. This proved to be a successful venture. Partly for this reason a branch house was established in Hilo under the management of Georg Rodiek, who was one of Hackfeld’s cousins, and another branch house in Kailua (on the windward shore of Oahu), in 1898, under the management of Christian Castendyk.

In 1899 the firm marked its fiftieth anniversary with a celebration at the firm’s Honolulu headquarters on October 2 led by Johann F. Hackfeld.[96] A thousand dollars each was given to thirteen local charities and the senior partners, Isenberg and Hackfeld, contributed to a $50,000 fund (or $1.36 million in 2010 dollars) to build and maintain a German Lutheran church in Honolulu. Another feature of the anniversary was the laying of a cornerstone for a new head office building just north of the old one, the old Court House, where the firm had been based since 1874. Paul Isenberg loaned the firm almost the entire $200,000 cost of the new building (or $5.23 million in 2010 dollars). It was opened in March 1902 and described by the Hawaiian Star as “probably the finest completed building in the islands.”[97]

Isenberg was a relatively short-lived president. He died on January 16, 1903.[98] He was succeeded as president by Johann F. Hackfeld. During his term as president, the younger Hackfeld spent half of each year in Germany where his Mexican-born wife, Julita, had returned in 1900 to become a permanent resident. Her health had been adversely affected by the climate of Hawaii. Nonetheless, Hackfeld was actively engaged in the business of his firm and the H.S.P.A.[99] Hackfeld was supported by a succession of managing directors. The first was H. Alexander Isenberg, the third son of Paul Isenberg, who was born in Bremen in 1871 and immigrated to Hawaii in 1894. He started his career at the bottom in the clerical department, being successively bookkeeper and cashier, and then managing director after the resignation of William Wolters in September 1900.^[100] Isenberg died in November 1905 and was succeeded by Wilhelm Pfotenhauer. Pfotenhauer had been born near Celle in 1862. He came to Hawaii in 1886 having been one of the many youths recruited from Bremen. He was initially employed for a short time as a luna, or manager, at the Kekaha Sugar Mill. He impressed the firm and in 1888 was transferred to its clerical department in Honolulu. For a number of years he was head bookkeeper. He was then promoted to cashier. Pfotenhauer died in 1913 and was succeeded by Georg Rodiek as managing director and vice-president of the firm.[101] Rodiek had been born in Altenesch, Oldenburg, in 1871. He began his career with the Bremen tobacco merchants, Ed. Barckhausen & Co. In 1891 he immigrated to Honolulu to become a clerk with H. Hackfeld & Co. As noted above, in 1897 he became manager of the firm’s Hilo branch, returning to Honolulu in 1900 after he was elected a director of the firm.[102]

The period from the firm’s anniversary in 1897 to its dissolution in 1918 was a period of growth and expansion in its core sugar agency business. The sugar tonnage shipped increased from 46,259 to 144,075. This was 25 per cent of the total shipped by the industry in 1918.[103] In April 1897 the firm began the development of a large new plantation, the Oahu Sugar Co., on the leeward side of the island of Oahu. The irrigation water for the plantation was at first sourced from seventy-three wells but this was insufficient. A water industry entrepreneur, Lincoln L. McCandless, suggested to the firm that they might build a tunnel to transfer water from the windward side of the island through the Koolau mountain range to the plantation. In December 1912 the territorial government sold a water license to a new company linked to the Oahu Sugar Co., the Waiahole Water Co. Construction began early in the following year.[104] The death of Pfotenhauer in 1913 meant Hackfeld had to temporarily take charge of the management of the firm. Among the many matters demanding his attention was the financing of the Waiahole water project. The total length of the aqueduct was over 14 miles and included ten miles of tunnels. It cost $2.5 million. It was one of the biggest industrial undertakings in the history of the Hawaiian Islands. After it was completed in 1916 it led to a large increase in the plantation’s output of sugar cane.[105]

At the outbreak of World War I the firm was probably still the largest sugar agency in Hawaii. Its employees were still almost all Germans. The firm’s strong ties to Germany were undiminished. From the unification of Germany in 1871 until 1917 members of the firm successively served as German consul, the first being Carl Pflüger. From 1902 the German consulate had been located in the firm’s Honolulu office building. The Hawaiian correspondent of The Louisiana Planter noted at the end of August 1914, many of the firm’s employees were in the German military reserves and would have been on the way home but had received instructions not to attempt the journey until the way was clear.[106]

In April 1917 America entered World War I on the side of the Entente Powers against the Central Powers which included Germany. While the firm’s president Johann F. Hackfeld resided in Germany, Ralph S. Kuykendall notes that the firm’s standing in the Hawaiian community was reflected in the fact that its managing director, Rodiek, was president of the Hawaiian Sugar Planters Association (H.S.P.A.). He was also a naturalized American citizen. However, in July 1917 Rodiek and an employee of the firm, Heinrich Schroeder, were indicted by a federal grand jury in San Francisco for plotting to send a shipment of arms and ammunition from the United States to India as part of a German conspiracy to bring about a revolution there. Rodiek was on his way to San Francisco at the time and was arrested on his arrival in California. He and Schroeder initially pleaded not guilty. Later in December 1917 they both withdrew these pleas and pleaded guilty to a violation of the neutrality laws of the United States. However, they also presented a statement they had not been aware of any violation of the law at the time. Rodiek was fined $10,000 and Schroeder $1,000 ($170,000 and $17,000, respectively, in 2010 dollars). The India conspiracy had a serious impact on the firm. It had already been placed on the British government’s blacklist, inhibiting its ability to ship sugar to British possessions. Following Rodiek’s indictment the American government denied the firm access to the telecommunications network, hindering its business activities.

In the absence of Rodiek the leadership of the firm passed to the firm’s second vice president, Carl Hagens, who was the nephew of Carl Pflüger. However, he resigned in late 1917 and the leadership passed in turn to the firm’s third vice-president, Johann Humburg. Humburg, who was in the continental United States at the time, arrived back in Honolulu in early 1918. He agreed with Hagens that the only way the firm could survive the anti-German hysteria being promoted by Honolulu’s daily newspapers was to thoroughly Americanize the firm. However, they had delayed too long. The Alien Property Custodian had already seized the shares in the firm owned by Johann F. Hackfeld, giving the office complete control. In August 1918 a new corporation, American Factors, Limited, was formed by businessmen from the small group of white Americans and Britons who dominated the Hawaiian economy, which acquired all of the assets of H. Hackfeld & Co. from the Alien Property Custodian. The old firm was then dissolved. Among the immediate changes made by the new owners was to rename the department store B.F. Ehlers & Co. as “The Liberty House.”[107] Johann F. Hackfeld was hit hard by the “malicious betrayal” of his former business friends. He never returned to Honolulu because he was unable to forgive them.[108]

After the war was over Johann F. Hackfeld made an attempt to recover his property from the Alien Property Custodian. He successfully claimed that he had become a citizen of Hawaii in 1894 and thus an American citizen in 1900 under the provisions of the Organic Act which collectively naturalized all citizens of the former Republic of Hawaii. Money and property worth approximately $3.7 million was restored to him. Hackfeld then took legal action against American Factors and all those involved in the dissolution of H. Hackfeld & Co. on behalf of the latter’s former stockholders. He claimed the dissolution had been a fraudulent conspiracy and that the firm’s stock had been undervalued. The judge in the subsequent trial in San Francisco found against Hackfeld. Hackfeld unsuccessfully appealed against the decision. He died in Bremen on August 27, 1932. His ancillary executor in New York, Friedrich Rodiek, the brother of Georg, introduced a private bill in the United States Senate in 1934 seeking payment of $3 million (or $48.9 million in 2010 dollars), the alleged difference between his share of the proceeds of the sale and the true value of his stock.

This new attempt initiated a cross-suit by the United States government that led to the confiscation of Hackfeld’s American estate. The cross-suit revealed that Hackfeld’s claim to American citizenship was invalid, and that he had never claimed to be an American until after the dissolution of his firm. The government won the cross-suit in 1939 and the judge awarded it over $1.6 million (or $25.1 million in 2010 dollars). This represented the difference between the full proceeds Hackfeld had received as a professed American citizen and the eighty per cent that represented the largest amount any German citizen had ever recovered, and in addition interest from receipt of the award to the day of the verdict. The Hackfeld estate then appealed but the verdict was upheld by the United States Supreme Court in 1942.[109]

Social Status

Heinrich Hackfeld valued his privacy and was a declared enemy of all ostentation. An obituary in the Weser Zeitung also noted, using the English words, that he was in the fullest sense a “self-made man.”[110] Hackfeld received early recognition during his business career in Honolulu with his appointment in June 1852 as the kingdom of Sweden’s first consul in Hawaii, a position he held until he returned to Bremen in 1862.[111] Alexander Pflüger also suggests Hackfeld (Hakapila) and Carl Pflüger (Kale) became confidants of Kamehameha III. On more than one occasion they prevented foolish initiatives by his American ministers, for example a proposed decree by the Minister of Public Instruction, the Rev. Richard Armstrong, who wanted to introduce submerging people under water until they nearly suffocated as a punishment. Hackfeld and Pflüger also helped persuade the king to dismiss his disloyal finance minister, Dr. Gerrit Judd, in 1853. Judd favored the annexation of Hawaii by the United States which Hackfeld and many other foreign merchants opposed. The following year the king called Pflüger to his deathbed to tell him that he had ordered that the repayment of his debts to Pflüger’s firm be prioritized before any other creditors.[112]

Hackfeld’s brother-in-law and business partner, Carl Pflüger, in later life took an interest in the welfare of contract laborers in the Pacific. For example, he paid for the translation of an article on the “Slave Trade in the Pacific Ocean,” published in the Hawaiian Gazettein June 1871, which had originally appeared in September 1870 in a German newspaper. It reported on the transportation of several hundred Chinese contract workers in a Salvadoran-registered ship from Macao to Honolulu. The conditions on board were apparently worse than on the ships which had transported African slaves on the “Middle Passage.”[113] One of Pflüger’s last interventions, shortly before his death, was to secure a copy of a Swedish and Norwegian official government report into allegations of mistreatment by Swedish and Norwegian laborers in Hawaii and pay for the publication of a German translation.[114] The report found that all but one of the allegations were unfounded.[115] H. Hackfeld & Co. of Honolulu had arranged this particular immigration.[116]

Paul Isenberg, who succeeded Heinrich Hackfeld as head of the firm, was probably the most socially engaged. He was a member of the Hawaiian House of Nobles from 1874 to 1890 representing the island of Kauai. Isenberg opposed the imposition of the Bayonet Constitution in 1887 which disenfranchised many native Hawaiians and curtailed the prerogatives of the Hawaiian monarch.[117] However, Isenberg did not allow his support for the monarchy to jeopardize the interests of the firm. Eduard (Edward) Müller, a partner who was a founder in January 1890 of the National Reform Party, a party opposed to the Reform Party which had imposed the Bayonet Constitution, caused embarrassment through “political partisanship and bias inimical to the interests of the firm.”[118] Muller was forced to retire as a partner in the firm in May 1890, sacrificing ‘his business for a principle.’[119]

Isenberg’s successor as head of the firm, Johann F. Hackfeld, supported the overthrow of the Hawaiian monarchy in 1893 and identified with the Reform Party, which advocated the annexation of Hawaii by the United States.[120] Isenberg had favored the retention of the monarchy with Princess Kaiulani under a regency.[121] However, Hackfeld was also a staunch German patriot, and it was a custom of the firm to celebrate the Kaiser’s birthday each year. In 1902 this celebration was combined with a celebration of the opening of a new office for the German consulate.[122] Had he become a naturalized American citizen in 1900, rather than remaining a German citizen, H. Hackfeld & Co. would not have been dissolved by the American government in 1918.

Conclusion

Heinrich Hackfeld must have been an exceptional entrepreneur for Dr. Robert W. Wood to favor him in preference to rival and better educated fellow Americans. Hackfeld clearly repaid the trust Wood had placed in him. They also became lifelong friends. The later adoption of the company practice of recruiting young men from Germany with a professional training ensured that Hackfeld’s business was well-managed and survived the founders’ return to Germany. Although family members continued to be involved in the business throughout its history they appear to have been promoted to senior positions on the basis of merit rather than nepotism. However, very few of the firm’s partners, managers, or employees settled in Hawaii. In this respect H. Hackfeld & Co. was very different from German-American businesses in the continental United States. Had it not been for the intervention of the Alien Property Custodian in 1918 the firm might have continued to thrive under its German owners and managers for many more years. Its involuntary transition to non-German ownership illustrates the vagaries of the German-American experience.

The successor firm, American Factors, continued in business for several decades as one of the “Big Five” firms which dominated the Hawaiian economy for much of the twentieth century. In 1932 the United States Attorney General observed that the Big Five had become “unified and interlocked to an unusual degree, through intermarriage and interlocking directorates, [and] the financial control of the islands [was] largely in the hands of one relatively small, general business group”; the Hawaii Hochi, a Japanese-American newspaper, likened the group to an octopus.[123] During World War II and in the postwar years the Hawaiian economy began to become more open to the outside world and the dominant role of the Big Five slowly diminished. From the 1950s the firm began to increase its involvement in the growing tourism industry in Hawaii while its sugar business began a long period of decline as the American tariff on sugar was progressively lowered and labor costs rose. In 1966 the firm’s name was changed to the more “corporate sounding” Amfac. During the next few years its sugar plantation land attracted the attention of various continental United States investors because of its potential for real estate development. In 1988 the firm was acquired by JMB Realty of Chicago.[124] The new owner failed to make a success of the business and in 2002 a much diminished Amfac Hawaii filed for Chapter 11 bankruptcy protection.[125] The business was reorganized and renamed Kaanapali Land.[126]

Notes