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United States. 76/ In general, the reign of Kamehameha IV marked the beginning of the turning away from American influence and toward a closer relationship with England. This relationship with symbolized by the introduction of the Anglican Church into Hawaii by the king and his wife, Queen Emma. 77/ The king and the chiefs feared that the great preponderance of American interests (particularly missionary interests) in Hawaii would lead to the overthrow of the monarchy, annexation, and the eventual extinction of the Hawaiian race. 78/ The close call with annexation in the waning years of the reign of Kamehameha III (which Alexander Liholiho had opposed, as prince and heir apparent) confirmed this suspicion.
Meanwhile, these years were years of economic transition. Whaling declined as the primary industry, while the sugar industry grew dramatically. After the California gold rush, the sugar industry went into a depression in Hawaii. However, the U.S. Civil War provided the necessary boost in the market to make Hawaiian sugar the primary export of the islands. Another factor in the increase in output at this time were improvements in mills, machinery, and production methods.
The plantation agency system developed to promote the industry. The system, which was set up by the larger business houses in Honolulu, provided capital to and served as centralized agents for individual plantations. The larger of these establishments would eventually consolidate into the "Big Five" sugar factors (agents).
The problem of labor supply became acute, sparred by the growth of the agriculture industry and the continued decline in the native population. 79/ More Chinese laborers were brought in, but this was not a popular policy, particularly among native Hawaiians. The first Japanese laborers were brought to Hawaii in 1368. In 1869, Hawaiians held meetings during which several resolutions were passed against further importation of Chinese contract labor and expressing the opinion that "the government should bring here the people—men, women and children—of a cognate race with ourselves, as laborers, and to increase the population of our group." 80/
In 1871, a treaty of friendship and commerce was concluded with Japan. The treaty contained provisions that "the Hawaiian Government expected to open the way for an extensive immigration of Japanese laborers to Hawaii." 81/ This goal was not reached until after many years of negotiation, however.
The continued growth of the sugar industry depended on the existence of an accessible market. For this reason, the question of annexation was still alive in the minds of sugar planters, who were most interested in getting out from under the heavy import duties imposed upon them by the U.S. Government. The Hawaiian Government proposed an alternative—a reciprocity treaty with the United States to permit U.S. and Hawaiian goods to be exchanged free of duty. An emissary was sent to Washington to negotiate such a treaty but it did not pass the U.S. Senate. The Hawaiian sugar industry was afforded some relief, however, when the U.S. tariff was lowered in 1859. In late 1866 the reciprocity treaty was once more brought forward, but it was again defeated in the U.S. Congress.
One of the reasons for the defeat of the treaty, according to Kuykendall, was the mission of Zephaniah S. Spalding. He was sent to Hawaii in late 1868 by U.S. Secretary of State Seward 82/ "to observe and report to Seward on the situation in the islands and the probable effect of the reciprocity treaty that was then pending in the Senate." 83/ According to Kuykendall, Spalding was "strongly opposed to the reciprocity treaty, and was in favor of annexation, which he thought would be hastened by rejection
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