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A highly important discussion arose over the legal interpretation of the status of Hawaii under its new government with respect to this country. The difficulty arose on similar grounds to those stated in the section on Puerto Rico, and the cases went up to the Supreme Court in January, 1901. The particular point in that case was on the right to exact customs dues. The New York and Puerto Rico Steamship Company also raised the question of pilotage, claiming exemption from pilot-boat charge in New York harbor on the ground that Puerto Rican ports had ceased to be foreign. Another case was one covering the entry of goods from Hawaii, consisting of whiskey, brandy and jam, at the customhouse at New York on April 26, 1900, and was the only Hawaiian case in the list. Duty was assessed under the provisions of the Dingley law. The importers protested against collection of duty on the ground that the Hawaiian Islands were a part of the United States; that the provision of the annexation resolution, which continued the customs laws of the Republic of Hawaii in force until Congress should legislate, was unconstitutional. 

In his argument for the government, the Solicitor-General asserted that it was obviously the intention of Congress as soon as practicable to treat the territory as part of the United States for legislative purposes, so that the revenue and commercial laws which apply in the United States should operate there. But before these laws could be put in operation in the Hawaiian Islands it is necessary that a period of preparation should intervene after the passage of the resolution of annexation. It is obvious that if the resolution of annexation immediately abrogated the customs laws of the islands the territory would have been left without any customs law, open to the ships of the world. If, then, the resolution of annexation threw open the ports of Hawaii to the world, at the same time, according to the contention of opposing counsel, it threw open the ports of the United States to ships coming from Hawaii. 

The Solicitor-General argued that this sort of the should not be permitted, and he expressed the opinion that if Congress had believed that such a consequence would ensue, the resolution of annexation would not have passed when it did, not until arrangements could have been made to put in operation customs and commerce regulations immediately. He called attention to the act of annexation, saying that it did not make the Hawaiian Islands a part of the United States, but a part of the territory of the United States. "It is," he said, "obvious that territory annexed or ceded to the United States becomes a part of the territory of the United States, but does not become 'part of the United States' either in a constitutional or legislative sense until Congress shall so determine." 

It was not until the passage of the act of April 30, 1900, that the islands became a part of the United States for customs purposes by the extension of our laws to them. 

In the discussion of the Hawaiian question the opponents of annexation made much of the argument that the acquisition of the islands would involve this country in immense expenditures for fortifications and naval defense. Mr. Schurz contended that the annexation of Hawaii would present to hostile powers a vulnerable point such as it is inadvisable to present to any foreign nation which may wish us ill. 

"The Hawaiian Islands are 2,000 miles distant from our nearest coast. If we acquire them we cannot let them go again without great humiliation, for, after all that has happened, they will appear as an especial object of our desire, to be held at any cost. In their present unfortified condition they would be an easy prey to any hostile power superior to us in naval force. But even if well fortified, their defense would oblige us to fight on a field of operations where the superiority of our land forces would be of no avail, unless we had a navy strong enough to protect the communication between our western coast and Hawaii against any interruption. Our situation would be somewhat like that of Russia during the Crimean war. The allied armies would have had little, if any, chance of final success had they attempted to invade the interior of Russia. But, forcing Russia to a fight at an exposed point, the communications of which with the interior of the empire were at that time so imperfect as seriously to impede the use of Russia's vast resources, they succeeded in forcing Russia to submit to a humiliating peace. For similar reasons the possession of the Hawaiian Islands by the United States would not serve to deter a foreign power from attacking us, but rather be calculated to invite attack, for it would offer to a foreign enemy the possibility, not now existing, of forcing us to a fight on ground on which we cannot bring the superiority of our resources into play, and of gaining by a rapid stroke at the beginning of a war an advantage extremely embarrassing to us. In this respect, we shall by annexing Hawaii simply acquire a vulnerable point. 

"It may, indeed, be said that, if annexed, Hawaii would not remain in an unfortified state. That is true. But, as the history of our harbor and coast defense shows, it will require years to put those distant islands into a reasonably secure condition. And then it will require a big war fleet to make those fortifications really tenable, and to keep the communication between Hawaii and our continent safely open in case of war. Such a big fleet we can build, too. We can do all these things. If the people are willing to pay the bills and to endure the effects to that sort of policy, we can do this, and much more. But is not the really important question whether as a sensible people we should do it? Should we adopt a policy obliging us to do it, instead of maintaining the safe ground on which we now stand?" 

So far as the commercial advantages promised by the annexationists, the coaling stations, etc., are concerned, it was argued that these benefits might have been had without annexation just as well as with it. 

In the North American Review, Mr. Arthur C. James sets forth on the other side of the question what he conceives to be certain advantages of annexation. 

He states that before his visit to Hawaii he was strongly opposed to annexation, but that he returned to this country an ardent annexationist. He has become convinced that the Hawaiian Islands would bring to the United States great commercial and industrial advantages. They are situated in the most fertile part of the world, and are capable of producing all the sugar and coffee that this country can consume, besides large quantities of rice and tropical fruits. They have three excellent harbors, and would control the cable communication of the Pacific. Even more significant than the commercial importance of Hawaii is her strategic position in relation to the protection of the Pacific coast of the United States, and this Mr. James regards as another reason why we should desire annexation. To the objection that annexation would be a radical departure from our traditional policy Mr. James replies by citing the cases of Alaska, Louisiana, New Mexico, Texas, California, and other States, whose value at the time of their annexation was less apparent than is Hawaii's value to-day. Even now Alaska is farther away and less accessible than Honolulu. 

To the question, "Have the natives been consulted?" Mr. James replies: 

"No, but were the American Indians consulted in the early days here, or the natives of Alaska in later times? The natives have proved themselves to be incapable of governing and unfitted for the condition of civilization, as is shown by their rapid decline in numbers and their inability to adapt themselves to changed conditions; and the importance of their supposed opinions on annexation has been greatly exaggerated. Numbering 500,000 in the time of Captain Cook, they are now reduced to about 30,000, and occupy much the same relation to the white population as our Indians do here. Indolent and easy-going, they are perfectly content with any form of government which allows them to sun themselves, bedecked with flowers. This view is borne out by the failure of the recent mass-meeting in Honolulu, organized solely for the purpose of proving that the native Hawaiians are actively opposed to annexation. It is natural that the white man should become the governing power; and in the exercise of this power it is equally natural that he should wish to turn over his territory to a strong civilized nation for protection and advancement, since, if they rely solely on their ability to defend themselves, it is impossible for the islands to maintain their independence for any length of time." 

The question is, to what country shall Hawaii be annexed - to Japan, to England, or to the United States? Annexation to one or the other is inevitable. 

That the mixed character of the Hawaiian population is a real drawback Mr. James admits, but the difficulties, he holds, are not insuperable. 

"The Chinese are not yet dangerous. Their numbers are large; but they are a peaceable people, without cohesion, and would give no more trouble than the same race does in our Western States, where the battle has been fought and the question is now practically settled. If annexed, they would be readily amenable to our laws. The Japanese element is by far the most serious difficulty. Since the war with China these people have become exceedingly arrogant and self-assertive, and the spirit of national aggrandizement extends from the Mikado to the lowest coolie. From the standpoint of the Japanese, this spirit may be most commendable, but it will have to be firmly met by the United States when our own interests are at stake. The Portuguese are a harmless element. I can see no reason why we should not expect people of the Anglo-Saxon or German race to become dominant, not only in power, but also in numbers, as soon as the question of government is finally settled."] 

Mr. Townsend, Inspector-General of Schools in Hawaii, stated in an article we are unfortunately unable to identify, that as plantation laborers the Portuguese were entirely satisfactory when first they arrived. They numbered over 15,000 in 1896, but most of them took to the mechanical crafts and many are now prosperous overseers, merchants and property owners. 

Mr. Townsend admits that some of the objections urged against the Chinese population have validity, but he believes that as a rule the Chinese of Hawaii are superior to those of California, while economic conditions are essentially similar. The Japanese are more troublesome. The objection to them, however, is not that they are Japanese, but that so large a percentage of them is of the lower classes. Have not similar complaints against the immigrants coming into the United States from Europe resounded for the past twenty years? And are not such complaints well founded? The Japanese are reasonably industrious and well disposed. As a class they are law-abiding, though individuals of this nationality commit a fair percentage of our crimes. Yet the officers of the law have never encountered any serious resistance to their authority at the hands of the Japanese. Sudden outbursts of temper have caused a number of them to commit the most serious crimes during the past year. These crimes have been directed against their own countrymen, and in most instances have been attributable to the disparity of the sexes, there being four times as many men as women. In all such cases the law takes its even course, being scarcely resisted by the criminal himself and never meeting with any organized resistance on the part of the Japanese. Men sleep in safety of property and person in houses unlocked, and women travel unattended and without fear in every district of the islands. 

The Americans, British, Germans, and Norwegians who constituted the remainder of the population numbered only about 7,000 men, women and children, of whom 2,200 are of island birth. These people controlled the destinies of Hawaii.