This is the second part of This is Our Hawaiʻi, a new podcast from Hawaiʻi Public Radio.
A little over a decade ago, tech billionaire Larry Ellison made headlines when he acquired Lānaʻi for $300 million. He reportedly bought the island for less than what David Murdock, the island's previous owner, had hoped to sell it for — but it was still a much steeper price than what William G. Irwin paid in 1909. Irwin, then one of the wealthiest businessmen in Hawaiʻi, bought the island for just $1.
At least, that's what the New York Times reported back in 1914.
Was an entire Hawaiian island really sold for a dollar? And how did Hawaiʻi get into the business of buying and selling islands in the first place?
To learn more, HPR set off to find a 100-year-old receipt — and ended up unraveling a story about big businesses, legal battles and land conspiracies.
Breaking the bank
Where did that mysterious dollar figure come from?
“It makes me wonder if a reporter saw a rebuttable presumption of consideration at a dollar and mistook it for the actual cost of the land,” said Meyer Cummins, a land surveyor with the state's Land Survey Division.
A “rebuttable presumption of consideration” is an offer on a conveyance document. In order to legally transfer land, people use conveyance documents, which record the seller, the buyer, and how much money was “offered” in exchange for the land.
But the offer doesn’t have to be the actual sale price of the land. In fact, it often isn't, according to Cummins.
“Generally speaking, if you pick up a conveyance document, it usually just says the land was sold for $1 or $10, or love or aloha,” Cummins explained. “Just to seal that legal bargain, make it legitimate.”
A 1909 conveyance document confirms Charles Gay conveyed Lānaʻi to William Irwin for $1, but it doesn't indicate if that was the real price tag for the island.
It also doesn't clarify how Gay got ahold of those lands in the first place.
Until the cows come home
At the turn of the 20th century, Charles Gay was a cattle rancher on Lānaʻi. He owned roughly half the land on the island outright and he leased the other half — about 48,000 acres — directly from the government.
Gay wanted to buy those 48,000 acres, but the 1900 Organic Act had made it illegal to sell more than 1,000 acres of land to any one entity at one time. However, large corporations and landowners found loopholes to get around that law.
One such loophole was the practice of land exchanges. Rather than buy the land, an interested party would swap parcels of land with the government.
Then-territorial Gov. George Carter agreed to a land exchange with Charles Gay. Gay would gain ownership of the rest of Lānaʻi Island, and the territorial government would receive several acres in what is now downtown Honolulu, including the land where the Hawaiʻi State Library and the Honolulu Museum of Art School are located.
Not everyone was on board with the exchange. Lincoln McCandless, a local lawmaker and an early member of the Hawaiʻi Democratic Party, filed an injunction with the local courts to stop the exchange, on the basis that it violated the essence of the Organic Act. When the Hawaiʻi Supreme Court reversed the injunction, McCandless took it to the U.S. Supreme Court.
He also argued passionately in front of the territorial legislature, asking them to consider what would happen “if a man like Rockefeller came here and quietly bought up everything in the way of lands on Oʻahu.”
At the time, Lānaʻi was in rough shape. The island was deforested, dry and faced a serious erosion problem. Some people feared the island would deteriorate completely if it were not better maintained.
Carter wanted to put Lānaʻi under the control of someone “who (could) afford to, and from the interest of preserving their own property will, expend the money necessary to fence, to forest, to kill the goats off, and to have that island from becoming a barren waste and impossible for the production of any wealth at all.”
Supporters of the Lānaʻi exchange believed that stewardship of the land meant finding a way to make as much money off of it as possible. In their eyes, one person with sole ownership would be best for the island — especially if that person was rich.
That idea had the backing of former U.S. President Theodore Roosevelt, who expressed his support for the exchange in a 1906 letter to Carter. “As regards to the small islands,” wrote the president, “we must try to put them under private ownership and under private ownership of some man rich enough to take measures that will prevent their being rendered absolutely uninhabitable.”
The U.S. Supreme Court ultimately sided with Carter as well, arguing that since McCandless could not demonstrate any personal injury from the exchange, he had no grounds to bring a case to the court.
The exchange for Lānaʻi succeeded. But Gay only owned the island for less than a single day. William G. Irwin had been in control the entire time.
Pulling at the strings
Irwin was one of the largest players in the islands' sugar industry. At one point, his company controlled nearly one-third of Hawaiʻi's sugar trade. He had been interested in buying Lānaʻi for years, but he needed a way to get around the limitations on land acquisition set by the Organic Act. The possibility of an exchange offered a ray of hope, and to make the deal look more legitimate, Irwin got a frontman: Charles Gay.
Gay may have approached Carter about the exchange, but it was an open secret that Irwin was behind the whole operation. As a Hawaiʻi legislative report states, “Although title to the government land on Lānaʻi was transferred to an apparently independent rancher, Charles Gay, it was understood by Gov. Carter and the other principals to the transaction that Gay was absolutely dependent in this transaction on funds made available by William Irwin.”
On April 10, 1907, the Lānaʻi exchange was finalized. Gay took the land and mortgaged Lānaʻi back to Irwin the very same day, for close to $200,000 — the real price of Lānaʻi.
Two years later, Gay defaulted on the terms of his mortgage with Irwin. He conveyed the lands to Irwin officially, as recorded on the 1909 conveyance document.
The cost of the Lānaʻi sale can't be measured in dollars alone. The exchange opened the doors for more than a century of private ownership on Lānaʻi, indelibly shaping the island that more than 3,000 people call home today. In the next episode of This is Our Hawaiʻi, HPR will talk to some of those people about what it really means to belong in Lānaʻi.
This Is Our Hawaiʻi is produced by Hawaiʻi Public Radio, a member of the NPR Podcast Network, with support from PRX and is made possible in part by a grant from the John S. and James L. Knight Foundation.
This podcast is hosted by Russell Subiono and produced by Savannah Harriman-Pote, with assistance from HPR staff: Ananddev Banerjee, Taylor Nāhulukeaokalani Cozloff, Bill Dorman, Sylvia Flores, Casey Harlow, Sophia McCullough, Liberty Peralta, Krista Rados, Emily Tom and Jason Ubay.
Mahalo to PRX's Mike Russo for his continued support. Logo design by Kristin Lipman.
This Is Our Hawaiʻi was made possible with financial support from HPR members. Consider making a contribution today.
Subscribe to This Is Our Hawaiʻi wherever you get your podcasts.
