Business & Finance: Pineapples Straight

In Honolulu last week one of the world’s simplest corporations voted to dissolve itself. Known as Pineapple Holding Co., Ltd., its entire assets consist of $37,500 in cash and 500,000 shares of Hawaiian Pineapple Co., Ltd., successor to an earlier company of the same name founded by James D. Dole in 1901. As all the holding company does is to hold, it reports no income, no outgo, no profit, no loss. It was formed in 1932 (along with the present Pineapple Co.) to straighten out the tangled affairs of the Dole company, which had grown long on inventory, short on cash. Its president, able young Atherton Richards, is also president of the Pineapple company, and dissolution of the holding company means that the pineapple emergency is over and the operating company can once more take care of its business.

Back in 1930 there seemed little likelihood that Jim Dole and his pineapples would ever get themselves into financial straits. Pineapples for U. S. consumption are practically a Hawaiian monopoly and the Dole company, along with California Packing and Libby, McNeill & Libby, dominated the industry. In 1930 the pack was 11,300,000 cases, of which Mr. Dole put up 4,500,000 cases. First Hawaiian sight glimpsed by travelers arriving from the “mainland” is an enormous pineapple (really a 400-ton water tank in disguise) on the roof of the Dole cannery. And along with Diamond Head. Pearl Harbor, Waikiki Beach and the Royal Hawaiian Hotel, the Dole cannery, where drinking fountains spurt pineapple juice instead of water, is a famed Hawaiian spot that no visitor is allowed to miss. Hawaiians like Mr. Dole, father of their pineapple industry, because although the sugar industry grosses more dollars, sugar eaters do not care where that commodity comes from, whereas most pineapple eaters associate that fruit with the Islands. And Mr. Dole had a very profitable enterprise, with a net income of $3,166,000 on sales of $15,200,000 in 1929.

Depression caught Mr. Dole between two fires. First, there was a tremendous overproduction in California fruit, especially peaches. Pineapples cost more than peaches but cannot maintain sales if the price differential becomes too wide. Thus, as the peach price level crashed, pineapple prices slumped also. Second, Mr. Dole could do nothing to cut pineapple production, because it takes about two years to grow a pineapple and Mr. Dole was reaping in 1932 as he had sown in 1930. Result: unmarketable pineapples piled up in Mr. Dole’s factory, their stench polluting the Hawaiian air. Further result: pineapples dropped from $5.20 a case to $2.70; the 1932 pack totaled 847,000 cases against more than 4,800,000 in 1931; and in 1932 the Dole company lost (mostly on inventory) $8,448,882. In December 1932, Mr. Dole was promoted to a semi-honorary chairmanship and Mr. Richards, backed by the Castle & Cooke sugar firm, became No. 1 pineapple man of Hawaii. In 1934 his company made about $1,000,000 and in 1935 (year ending May 31), $1,338,187. It has also paid off a note issue of $5,000,000.

Hawaii’s successful Pineapple Man was born on the Islands, went to Honolulu’s Punahou school, later to Wesleyan University. Working in San Francisco when the U. S. entered the War, he joined the Army, got no nearer France than Camp Lewis in Washington. Afterwards he worked for Emergency Fleet Corp., helped settle three billion dollars in claims over canceled contracts. In 1925 he moved back to Hawaii, became Castle & Cooke treasurer, won the insular tennis championship. At 41, he has black hair streaked with grey, sideburns, a marked modesty about himself. He helped organize the Pineapple Producers Co-operative Association Pool, in which his company has a 37% interest. The pool includes all the large growers, allots quotas, stabilizes prices. A big Richards’ innovation: the sale of pineapple juice, which now amounts to 25% of total business and is growing fast.