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Island Trading and Business in the 1960s

Kramer: My name is Jerry Kramer. Actually, it’s Joseph Kramer. I’ve been known by “Jerry” since I was a small kid. I first came out to the Marshall Islands – I was working for Douglas Aircraft. in Santa Monica, California.  I had a specialty. That was the inertia guidance system for the Nike Zeus missile. And I had just had my twentieth birthday and was sent to Kwajalein where they were blasting and testing the Nike Zeus missile. Because of my specialty with the guidance system, I arrived on Kwajalein October 11, 1961.

At Kwajalein they had an extension course from the University of Hawaii and I signed up. I had attended several colleges and never had a degree and thought I could get enough hours to work toward a degree. So I attended the University of Hawaii. At this university extension there was James and Alex Milne. They were fascinating. I had come from the East coast – Boston. One of the reasons I wound up on Kwaj. was I had decided to see a little bit of the country and drove California. I had never been that far west of the east coast and I just kept going. I got to Hawaii, got to the Marshall Islands, got to see a little bit of the rest of the world and understand different cultures. It was a real experience. To meet people from the islands and, again, to learn the different cultures and customs was just phenomenal.

In the course of meeting these people [the Milne brothers] we got to be friends and I went to Ebeye and visit [their] family. Eventually we decided to go into business together. In those days, to be in the Marshall Islands required Fourteenth Naval District approval and Redstone Arsenal approval.  You had Navy and the Army who had control of mostly the Marshall Islands because of its strategic nature and the testing that was being doing and had been done. Remember the atomic bombs were tested in the Marshall Islands and now the anti-missile-missile defense system was being tested. And we claimed Johnston island to be part of the Marshalls and that’s were the intercontinental ballistic missiles were being tested. So the Marshalls was very strategic for the U.S. and they protect access. In addition to the difficulty of getting approval from both he Army and the Navy, when I first came out – except of the charter flights that came from Hawaii to Kwajalein for the military  -- to come into the Marshall Islands meant going to Guam and taking a Pan Am-chartered sea plane (an SS-16, Grumman, I think) once every two weeks. You flew from Guam to Chuk and you landed in the water in Pohnpei and stayed over night. Then the next day you went on to Kwajalein and then from Kwajalein on to Majuro.

The turn-around was once every two weeks. Trust Territory government officials had a priority. Those were interesting days. If you took that aircract – and that was basically the only way you could get in – you had to check in twenty-four hours in advance. If a Trust Territory employee needed a seat, then you could be bounced up to the last minute of boarding. In any event, we’d formed this business. It was an extension of the business that James and Alex were both in. The idea was that I was to go to Fiji and buy a ship to go into the copra trade. When I left Kwajalein, I put in the necessary applications to come back to live in the Marshall Islands. I went back to California.

Question.: What was the purpose of the Milne brothers’ company?

They were island trading. They had had schooners – a couple of the old Likiep-built schooners. And one that James bought in Kiribus [Kiribati], I’m trying to remember the name … these were sailing vessels.  The Trust Territory government the Irok and Runanim. These were larger vessels for picking up copra. The only business available in those days with the limited population and limited disposable income that people had and the limited sources of revenue, which were basically copra – copra was the business. This is the old island business of the dried meat of the coconut, which was purchased. The money received was used to buy trade goods off of the ship. There was a certain amount of bartering and trading.  As good as the Trust Territory operations were – of course it was a government operation and that left a bit to be desired – there was room for private operations.

It may be interesting to note – and this goes way back  … the early sixties – at that time, the trading companies were basically Kwajalein Import & Trading Companies, KITCO,  and the Marshall Islands Import and Export company, MIICO,  Both of these were originated by the Navy after the war and had been turned over to civilian operation. They were major stockholder companies. Most Marshallese owned them, owned stock in the company. But there was a move towards more private entrepreneurship and several small companies started to develop. Milne brothers was one of them.

James [Milne] had found a ship in Fiji. I had put in my application to return to the Marshalls, went back to California, working for Douglass aircraft when I completed my contract on Kwaj. That would have been in 1962. Finally both approvals came through, from the Army and the Navy. I proceeded to Fiji, to purchase that ship. The ship was the Isakoola. That’s a Fijian name. That’s a shark god, a traditional or ancient cultural story about the god of sharks. … It had been built in Hull, England, for the rubber trade in Singapore I dealt with W. R. Carpenters, who owned the vessel. I put a deposit down and started the process of purchasing it. I found out that my partners didn’t have the financial resources to put the money up to continue the purchase. . . .  I’ll make a long story short.

I wound up purchasing the vessel with my own resources and sailing it back to the Marshall Islands with a cargo I arranged in Fiji. …  When I determined that my partners didn’t have the financial resources to meet their obligation for putting up any funds and W. R. Carpenters was trying to return the deposit, I developed a plan, which was to have my partners place orders with companies I knew existed in Fiji. Several of the companies agreed to supply goods on credit. They didn’t know I was connected to this – [it seemed like] it was a different group of people ordering from the Marshalls. I went ahead and appointed a ship’s agent and I told the agent that the freight had to be pre-paid in cash. So the suppliers were supplying the goods on credit to the people who orders in the Marshalls and I was getting cash up front for the freight from the shipping agent. We also took on cargo that was to be delivered to Nauru, to Valau, and Kiribus. That finally gave me enough cash to buy fuel, hire a crew, get provisions. I did that. W. R. Carpenters finally released the vessel for the value of the deposit and didn’t’ insist on the full payment. So, loaded up – I had my twenty-first birthday in Fiji while this was going on –

Q. But you knew nothing about boats.

Nothing about boats.

Q. Did you accompany ?

I went with the ship. I traveled with the ship.

Q. What kind of ship was this?

K:  It was a cast iron plates, riveted and welded, it was an older vessel – I can’t remember when it was built – it was in the twenties or thirties. It was a steamship, with a boiler, and it used bunker C, a heavy fuel. I had limited knowledge about what to do but I was a fast learner. Hired a crew, we hired a captain out of the island of Rotuma and other crew members, some of whom actually ended up settling in the Marshalls and having families. Some people will know the names. I sailed back to the Marshall islands, stopping to discharge cargo at Tuvalu and Nauru and onto to Kiribus and finally to Majuro.  

This was a very large ship and I had a limited understanding of the copra business. We made the first run through the Marshall Islands and picked up all the copra. When I say “all the copra,” this was our problem because when we got discharged and went on a second voyage, there just wasn’t enough copra to even begin to fill the ship  It was very obvious the ship was too big for the trade. Eventually the business failed. …That’s another long story. At some point I decided to leave 

Q Leave?

K: Leave the Marshall Islands.

Q: Let me pause here. Were other people picking up copra?  Was this the only run to pick up the copra?

K: We did the majority of the copra work. The government vessels were primarily involved with administrative work but they did pick up copra. We used better business tactics. We gave better service to people in the outer islands, watched prices very carefully to be very competitive. For the little we did – and incidentally we renamed the vessel, it was named the Narette, that was named after Milne’s mother who had died, [who was] from the Gilberts, Kiribus, and she ultimately died in the Marshall Islands. But there was service. There was no doubt that the [existing] service didn’t meet the needs but also that we were overkill. We did too much and couldn’t keep up with it financially.

Q: Just maintaining the boat.

K: Just maintaining the vessel.  The business failed. It’s another long story. It [the boat] actually had severe mechanical problems in one of the outer islands – Jaluit. It was stuck there and I went back to Jaluit and had to do some physical work on the vessel to get it  released and finally came back to Majuro. Incidentally, before Ejjit [adjacent to Majuro], there’s a small island, you can barely see the bow of the vessel, in its final resting place, sticking up. It’ll be there forever because the plates were cast iron and they don’t rust. They’re going to be there for a long time.

Q: Did you sink it there or did it sink itself?

K: I’m going to go into some more stories. Anyway the business failed financially. It was quite obvious the vessel was too big after we had an opportunity to start using it and the cost of operation was expensive. It wasn’t working. I decided to leave. My partners attempted to run it. They had trouble meeting expenses, couldn’t meet payroll, and the crew got sloppy and we feel they actually sabotaged the vessel. They let the boiler run out of water and the boiler blew in Jaluit.

I was on Kwajalein, trying to find a way of getting out. They [the Milne brothers] came to me and said that, if I could help get the vessel back to Majuro, they would assist me in leaving the Marshalls. This would be back about 1964 or ’64.

Q: Why was it difficult getting out?

K: I didn’t have the money. I was broke. I stayed with friends on Kwajalein, which you’re not supposed to do and got caught. [Laughter] It was still a military base. I had to go back to Majuro. They weren’t going to buy me a ticket out.

When the vessel blew, a lot of the crew disappeared. There were a few diehards who were still there. The crew was six left out of … eighteen. When I got there, I determined that the boiler tube was cracked and the firebox had distorted from the heat, because it’s supposed to be surrounded by water and they ran out of water. I had gotten a couple of books and there were ways to do the repair

The firebox could be repaired by making large rubber gaskets and unscrewing these big two or three-inch bolts and making patches. The boiler tube could be repaired by drilling through this three-quarter inch cast iron tube by hand and then threading it and putting in a bolt, the cutting the bolt and clinching the bolt. It – the tube -- was about two feet in diameter. And I did this myself. It took be about four months. By hand, crawling in, drilling by hand, threading, cutting the bolts.

Q: How did you survive during this period [of fourth months on Jaluit]?

K: In the outer islands, even till today for the most part, people are extremely cordial, very friendly. Jaluit was no different – very cordial people. Jaluit had been a major installation of the Japanese [Imperial Army during World War II} and there was a lot of leftover equipment and some U.S. equipment. There were remains of a Jeep and a small power plant and a few other things. Salvaging some of these pieces, I was able to take the steam generator and make it into a diesel generator and run it off some of the fuel. So we had a little bit of electricity, which we used to operate a pump.

In those days the field trip ship came only once every three or four months -- if you were lucky. There was only one trip [during my stay at Jaluit] and I can remember being thrilled when the ship came in. We were able to get some canned tuna and some toilet paper and soap. Other than that I remember the ship had cans of sardines and tomato sauce in the hold as part of the cargo and that was it, that was the only food, except for the shore-side food. People helped us with food onshore.

Q: What kind of shoreside food?

K: Local, Marshallese food.

Q: The Field trip boats?

K: From the Trust Territory government. Irok and Runanim.

Q: Their purpose?

K: Was to buy the copra and do the trading and do some of the administrative work. There were clinics, dispensaries, an administrative representative, but basically in those days there was no money in the outer islands. You could count the number of dollars on your fingers. People lived a true subsistence life. It was trading copra for trade goods. Communications was limited. There was a radio system  There were the Likiep schooners but I don’t believe one came to Jaluit the whole time I was there.

Likiep Schooners and Wooden Boats

Q: Can you describe the Likiep schooners?

K: These were vessels that I think were originally built by the Debrum and Capelle boat shop in Likiep. They were actually the backbone of the copra industry during the Japanese administration. Basically the boats would go to an outer island and come back to the district center\. The Irok and Runanim supplemented this service. but the direct runs of the old Likiep schooners that were built in Likiep [were the main means of transport].

Likiep had been quite famous a hundred years ago for wooden vessels coming from Australia to the U.S. and back through the Marshall Islands. They’d stop in Likiep to have their seams caulk and basically drydock work. The way it was done – they had sandy-bottom shallows. The schooners would come in, they’d ballast them, then tip them sideways, and do one side, caulking the seams and painting then, then ballast them and tip them the other way, and caulk the seams. They also built vessels there. Also some wooden military vessels from World War II that were rebuilt into schooners. I think some of that [work] was done here [in Majuro] by Robert Reimers and some of it was done in Likiep. 

There were several of those – let me see if I can remember any names:

Q: When did that ?

K: They slowly phased out. Basically they couldn’t compete with the Trust Territory government. on freight and frequency and especially on carrying passengers. These were phased out, I think mainly for financial reasons. There are still a few people who were alive and involved in building the old Likiep schooners. Some of the old Capelles, I think, are still trained and remember the days. It’d be nice to get their stories. So many of those people are gone. Robert Reimers had some fabulous stories. A few of the older Capelle people are still available and might be able to tell some of the stories of boat-building on Likiep.

Also boats were built here on Majuro. It’s not universally known but the [U.S.] military did some of the wood boat maintenance, which Robert Reimers took over. It was called the “Boat Pool.”  What’s there now is a Protestant mission Adididik. Behind it, mostly submerged, is a long concrete ramp that was used to pull the vessels up, which Robert Reimers used for several years. That still exists. I think you can see it from an aircraft.

The shoreside part of  the [boat-building] facility has been covered and buildings built on it but the area that goes down into the lagoon is still there and in very good shape, actually. It’s a bit surprising ….

When we got the boat repaired [on Jaluit], there was quite a bit of the old Japanese military facilities, rusted out and broke and what-have-you, still available on Jaluit it. I haven’t been there for several years but there was quite a bit there. One of the things that was there was still and there was  Marshallese guy that made alcohol for drinking.

When we realized the ship was … repairable and repaired and we were going to sail it back to the Marshalls, we realized also that it didn’t have sufficient fuel and it didn’t have sufficient water. To get the water, we cleaned out the lifeboat, rowed it ashore – there were seven of us --  and we had buckets. We went inland to an old Catholic mission where there was an old .. German cistern. I understand that cistern was built during the German administration, which would take it back 150 years – out of a locally-made cement. They made the cement by burning wood and coral. They came up with a type of lime. It made a cement. The original cistern was made out of this material.

One guy would climb up to the top of the cistern, [dump] a bucket into a sump. We’d pick up two buckets each and walk to the shoreline about a mile away and bucket it into the boat and then row the boat out to the ship, then bucket it, haul it up, then pour it into the tank. We loaded 20,000 gallons of water [that way].

Q: How long did that take?

K: [Laughter] Altogether, this enterprise took six months. We went around and gathered firewood. We could burn firewood. We opened up the burner, where the preheated bunker-C fuel was injected, and could load firewood into the boiler. … The whole enterprise took about six months.

.. .in planning on making the move, and not [yet] deciding on when the date would be, we had a party, the gentleman who made the alcohol donated quite a bit of it, and I had a bit of it and got a little bit high. When we rowed back to the ship that night, my hand got caught between the boat and the ship and got badly abraded. I got an infection. The local health aide doused it with iodine but it got worse and crew decided that it was now or never or it [my condition] was going  to be a problem. One day we set sail for Majuro.

After setting sail, we found a few stowaways onboard – there was a kid and a couple of women. [Laughter]  Anyway, we made it back to Majuro. It turns out I had a real problem. I got a high fever, my hand swelled up to twice its size. It turns out I was allergic to iodine. [Laughter]  We got the vessel here. We burnt all the firewood. We not only burnt up all the firewood and the oil, we had to break up the furniture. We burnt the furniture. We had some copra bags leftover. We burnt all the copra bags but we made it into Majuro.

The business model wasn’t going to work. My partners decided they couldn’t even try another trip. [The boat] was tied up to the dock for many months and it finally sunk at the dock in a storm. The Trust Territory government decided it had to be moved. because it was taking up valuable dock space. They floated it again and left it. It broke loose from the dock, went across the lagoon, and sunk in its final resting place. And that’s the end of the Nairette.

Q: After that?

K: After that, I decided not to leave … for a few reasons. I decided not to leave, number one, because I was disappointed in myself in not being able to do better with the opportunities that were available. It felt like I was leaving with my tail between my legs and feeling I had failed. I didn’t like the feeling of failure. Number two, I had made some very good, very close friends here. I wanted to try to do better.  Dr. John Imon and Isaac Lanwi and  Dwight Heine and people I felt very close to who had encouraged me to try and stay on and do something. Number three, my partners and I blamed each other for what happened. They were making it difficult for me to stay and that’s what I need for the impetus to stay, so I decided to stay. [Laughter]

Q: Their resistance made you stronger.

K: Resistance made me stronger.

Adjusting to A Different Culture, Notable Men on Majuro

Q: Can you talk about these friendships and your position as an outside? Did you find it difficult to relate to life here?

K: Initially, of course, everything was very different [than it is now]. It was very difficult. But eventually you realize that people use their surroundings and their environment to develop a life. I’ve done a lot of travel. More and more I feel human beings are pretty much the same [wherever you go]. They take the opportunities that are available and work it into a lifestyle to make the best they can for where and how they’re living.

It was only a matter of time before I felt I became a part of what was happening because I had to live in the same limited infrastructure, assets and what-have-you   If you didn’t have water, you did what you had to do. Superficially, when someone comes in and sees the lifestyles people may lead, they don’t realize the lifestyle’s been developed because of the conditions that have prevailed and you do the best you can to make your life the best you can.

I was very fortunate to meet some of the people I did meet, to call them friends. I consider that Dwight Heine … was probably one of the most intelligent people I’ve met in my life. He was a true intellect. Not only was he educated but he had a latent intelligence. Had he been in another environment he would have done more. But he did a tremendous amount not only in the Marshall Islands but in Micronesia. Isaac Lanwi, a natural satirist, very intelligent person. Dr. John Imon, dedicated in his position as Chief of Staff at the local hospital, did things --  a book needs to be written, these people need to be honored for the tremendous benefits they did for the Marshall Islands.

Right after the war [World War II], the [U.S.] military realized they would have to get the local people more involved in the day-to-day necessities of medical, food, and administration. There were special schools and special training. I know that Isaac Lanwi and Dr. John Imon went to special – and … Henry Samuel – went to special, intensive medical military training. Isaac Lanwi was an eye doctor. When I first came, they flew him all around Micronesia. He did all the cataract surgery.

Dr. John [Imon], Chief of Staff, did some tremendous [things] – I also remember the man never slept. His wife was related to the people I had been in business with [Milne]. When I first came back, I stayed with them. I wound up living with them for several years. … I remember living with Dr. John and he never got a night’s sleep. He was on-call twenty-four hours a day.  Because of culture and custom, a lot of time a doctor or a person is not supposed to see another relative nude or not supposed to touch them. Since Dr. John was not related [to anybody on the island] he was able to see any patient. As a result, two, three o’clock in the morning, and then, bang, seven o’clock in the morning – and he was the chief surgeon – he did some remarkable work.

I can remember a local patient who had a head trauma, wound up with a hematoma. Dr. John at this little hospital actually drilled into his head to relieve the pressure of this hematoma.

Another name … Tregor Rijota. The hospital’s named after his brother Armor Rijota. Tregor was another doctor  These guys did remarkable work with the limited training they had under the U.S. military.

Also there was a move when I first came out to keep the place [Marshall Islands] isolated because of the military testing. Not only did you go through this [clearance] business for a foreigner [to visit here] – there was no tourism. Zero. Zilch. It was just too difficult. Not only did you have to go through both Army and Navy approval to get into the Marshall Islands, but the Trust Territory government limited scholarships to two years.  No one was able to get a scholarship for a full degree. You could get an associate’s degree. Even that was difficult.

A few of our brave people, Amata Kabua, Dwight Heine … [others] worked their way through and were able to get their degrees. And it was with no small … difficulty  They [the Trust Territory government] said they could get a two-year scholarship – limited funds – for an associate’s degree. but to get a four-year degree required extraordinary efforts on their own part.

Trust Territory Restrictions on Education

Q: What was the reason for this restriction?

K; They [the Trust Territory government] wanted to limit – You have the U.S. government making strategic use of the land here, of Kwajalein, military base testing. What had happened in Enewetok and Bikini – The United Nations … mandate was that the U.S. would develop the infrastructure of the Marshall Islands, leading towards self government. My feeling is that there had been a lot of abuse in the destruction of the land, in the radiation, the residual radiation in Bikini and Enewetok, the testing that had irradiated other parts of the Marshall Islands, the ongoing testing that was done on Kwajalein, and the very limited benefits in those days that the people were receiving.

[People evacuated for nuclear testing were] picked up in the mid-corridor and moved to Ebeye and promised that they would be taken care of. Then, not having access to electricity or running water. When you were living in an outer island environment, that was reasonable. You had a few people living over a very large piece of land and you could make do on subsistence. But when they were congregated on Ebeye, it demanded more modern social development. They had to have housing. You could no longer put up the type of limited structures that people would live in on the outer islands. You had to have more sophisticated housing. You have to have running water and electricity and sewage and what-have-you.

Life was very difficult on Ebeye. The funds that were coming from the use [lease] of Kwajalein at that time went for the most part to the Trust Territory government and was given to the Congress of Micronesia to distribute. In other words, people from Yap, Palau, Chuk, Pohnpei, and Kosrai had a vote on how to spend the rental money from Kwajalein. This led to a small group of people in the Marshall Islands deciding that independence was the only option.

We had to get out from under, first of all from not being able to make the decision on how the land in the Marshall Islands was being used by outside forces. That’s another story. I attended these meetings—

Q: Who were these people?

Beginning of the Independence Movement in the Marshalls

K: Oh, boy. .. I’ve never told this story to anybody. … I’ve got to think about this one a little bit. … I don’t blame the U.S. government and certainly not the people of the United States because the people of the United States would not have allowed what the U.S. military did … in the Marshall Islands. The lack of proper compensation and the lack of educational, medical, and social welfare for the people they were displacing from the land, limiting their ability to run a business, not allowing tourist to come in – the U.S. military did this.

What it done intentionally? It had to be done intentionally. They were limiting access because of the strategic importance of the Marshall Islands. It must have been a conscientious plan that this had to be limited because or else intelligent, educated Marshallese were not going to allow this to happen. If there were restriction on people coming in and the use of their land, then they [the Marshallese] would have expected compensation and they [the U.S. military] would have look towards improving the lifestyle of the Marshallese. It made sense for the military to limit what could happen here.

Slowly but surely – it had to happen – we wound up with Marshallese who were able to get the education and had sufficient financial resources to be able independently to approach the U.S.  When you’re looking for food and looking for clothes and looking for a place to stay, you can’t very well argue with Washington. And you can’t buy a ticket to go back there. That’s what was happening. Slowly but surely, there was some development and we had some terrific leaders. Like I said, Amata Kabua and Dwight Heine and some others and Isaac Lanwi was a major politician and I’m sure I’m leaving out a whole bunch of names …

These were extremely intelligent people They lacked some of the environmental worldliness. They were able to make up for some of that with the education they had pursued on their own. Actually Dwight Heine ended up being promoted and promoted up to the Assistant … High Commissioner because he knew too much. He was too intelligent. They had to put him in positions where they could have some influence over him. Dwight and Amata actually grew up together. That’s another long story. Dwight was kind of adopted by Amata’s parents.

Anyway, suddenly … I can only remember  -- there was some general discussion [about independence]. I was invited one day to a meeting … If I remember correctly, it was chaired by Keith Smith. Keith Smith was the general manager of MIECO … when the military first started the business – the Marshall Islands Import Export Company. It was kind of interesting. I guess he was retired Navy. … That’s another story.  He started MIECO like the Navy. He had the officers in uniform and he tried to impose military discipline. He left, the came back and later … came back and was a manager for KITCO for a while.

He was at the head of the table [at the meeting about national independence] and I remember … very slowly the discussion started coming in. It was almost like people felt that this was … anti-[U.S.]government to talk about our future as independents. Slowly as this word [independence] came out – I’m trying to remember,  Bartemius Langrine was there? Amata Kabua, Isaac Lanwi, Henry Samuel, I think Dwight Heine. But I’m talking now about almost forty years ago.

Q: What was the date?

K: I may have some notes … it was during the Congress of Micronesia. This was what led to independence. There was starting to be an undercurrent, that these people had had this on their mind and were always afraid to say the word. Independence.  The Marshalls had been independence. Under the Germans at one point, they recognized the Marshall Islands. There was a flag and a stamp that went back almost a hundred years ago. And then independence was lost … The world cut up the Pacific  The Spanish said we own them, then sold them to the Germans… Marshallese always felt that they were independent and felt that they were occupied.  That was the sense I got from the stories I heard, especially from Amata [Kabua].

At this first meeting I can remember this sudden upswell when people started to finally open up with what they were thinking. And the word was, our only future is as an independent Marshall Islands. We are a unique people, this is our country, and we’re tired of being taken advantage of. Yes, they’re our brethren in Micronesia but this is our money they’re playing with. And we want out.  The U.S. [at the time] is talking about a permanent political status [for the Trust Territories]. The Marshalls has got no business being permanently tied to Saipan or Palau. We’re our own people {the Marshallese said]. That meeting was the beginning of the independence movement for the people of the Marshall Islands.

The U.S. didn’t really fight it. They kind of let it develop, but I don’t believe that the initial reception took the Marshallese seriously. It was like, They’re talking [so what?]  Suddenly – but not suddenly because of the background meetings that were being held – Amata Kabau (I think during the term that he was President of the Congress of Micronesia) made the announcement.

I’m trying to remember. Charlie Dominic was involved. I’m not sure if he was at that initial meeting. But he was in the congress.  … I need to confer with him because he and I probably have the best memory of exactly how this thing all came about. We were young kids at the time. I was till in my twenties, so was Charlie.  This should really be written down in the history of the Marshall Islands that hasn’t been written. But that was the beginning of independence in the Marshall Islands.

Q: What were you doing at this time? Why were you invited?

Shujiro Wasi, the MIECO Queen, and Pirate Treasure

K: I was working for Amata Kabua. He was president, Chief Executive Officer, for the Marshall Islands Import Export Company. It was kind of a weird operation in that I worked for him and not necessarily for MIECO and he gave me tasks to perform. We became very good friends. I can’t say much more about it except, during the course of working with MIECO, I got introduced to a guy name Shujiro Wasi. Shujiro mechanically had a tremendous intuition; his English was pretty good; his Japanese was excellent; and he was Marshallese – I think it was his grandfather that was Japanese – he did all of the mechanical work. He did some amazing work … typical of mechanics out in the bush. He did the mechanics, the electronics.

One particular remarkable job he [Shujiro Wasi] did …. First, let me just tell you what led to this. MIECO had a vessel called the MIECO Queen. They had had it built and rebuilt a couple of times, then determined that it was small for the trade. Then they went and bought a used vessel and named it the Ralik Ratik – the Sunrise Sunset chains of the Marshall Islands. They decided to surplus the MIECO Queen. Amata offered it to us.

By this time Shujiro and I had gone into business. We were repairing old juke boxes and old electrical equipment – we were doing a little bit of business and starting to do a little bit of import. I spoke to Amata one day and he said, “Look, why don’t you buy the MIECO Queen?  [what they’ve got] isn’t  sufficient for the trade The government ships are not doing the job and we need the extra service for the people on the outer islands.So how about buying the MIECO Queen?”

I was elated. By this time we’d brought in another partner and that was Charlie Dominic. So it was the three of us. Myself, Shujiro Wasi, and Charlie Dominic. We formed a company for the lack of a better name – no one could decide on a name so I named it, I called it Acme Importers.  I wanted the ship but Shujiro especially said, “Hey, this is foolhardy. We don’t have ten cents between us. Buy this ship, we can’t buy the fuel, we can’t get the trade goods. Unless we’ve got some money, my vote is we don’t take it.”

We did buy the ship  … The purchase of the ship is another tremendous story. … The main shaft of the main engine failed – the crankshaft. Anybody  who knows engines – and this was a big engine; the crankshaft had a crankshaft journal that must have been four or five inches in diameter – it was a 1,000 horse power engine or something. This happened in one of the outer islands in the Marshalls. This particular [engine] journal, the bearing failed and it scored the journal and the engine couldn’t be run the way it was. Shujiro went out and disassembled the engine so that that cylinder didn’t have to fire. Then he brought it into Majuro.

But the engine didn’t run well without this one cylinder. We needed to take it to Japan for drydock. So he built an apparatus with fine sandpaper and strapped it on the journal and by hand he machined this journal down and built a bearing by hand by using a … special metal … and over a period of about month he was able to repair this engine so that it did go all the way to Japan under its own power. He had an amazing mechanical intuition.

Our company, that was the forerunner of Pacific International – Acme Importers. At the beginning of Pacific International we decided to go our own way and our company split up.

Going back to the purchase of the MIECO Queen, .. We had a guy working for us, Battery Jorlang. Supposedly his family had come into possession of  -- well, there were a lot of stories. Some of the stories said that part of the money and the assets they had in an outer island, in the Marshall Islands, were part of the booty left by a pirate named Boullaise and that part of it came from a Chinese worker [during the Japanese occupation]. Under the Japanese, Okinawans and some Chinese were held as almost slave labor. He had somehow gathered some German and Japanese gold. When he tried to leave the Marshall Islands, the authorities are the time stopped him and he went to an outer island and nobody ever hear from him again.

Supposedly some of this treasure, cash, and what-have-you found its way into the Jorlang family in Ebon. I went to Ebon and Joe Jorlang, Battery’s brother, was in charge of this bit of treasure. To make a long story short, we borrowed – I borrowed. personally --  from Joe Jorlang. He lived in a thatched house, some metal siding, old island ways,  no running water, no generator, no flush toilet. I borrowed – this would be about mid sixties. This would be about 1966. I borrowed $10,000 from him.

Q: This was pirate money?

K: We don’t know exactly where it all came from. … I don’t know who in the family anymore knows. Joe is gone, Battery is gone. I don’t know who in the family is still alive. I heard that someone else got a big chunk of the money. We wound up paying back the money we borrowed. The deal we made basically was they would be our exclusive agent in Ebon and we’d paid them interest --- 10% interest – and we’d pay them monthly to repay the $10,000 I borrowed. And we did. We paid them back, we made them our exclusive agent – we did everything we were supposed to do.

But I heard someone else got a chunk of it [the treasure]. Is anything still there today? I don’t know. But I saw a lot of money. And some of the money was in old bills, which were silver certificates, which I sent to a friend in San Francisco and he exchanged that for bars of silver. Some of those are still here in the Marshall Islands. Actually, Charlie Dominic got them. He wanted to see them one day and he took them and I never saw them again. And there was some silver bullion.

Anyway we came back with that money and my partners agreed, okay, let’s go for it. We got the MIECO Queen on terms but we used the $10,000 for buying trade goods and fuel and we went into business. We started outer island shipping and copra purchasing.

Q: Okay, back to independence and the first meeting. By that time it’s about 1968?

K:: Earlier than that. Wait, it could have been ’68-70, around that time. … Even though that was the end of my relationship with MIECO, I still had a very close relationship with Amata Kabua and that crowd. The crowd was limited. We spent a lot of time at the Coconut Rendezvous Club and there were periodic meetings.

Q: Meetings centered on independence?

K: Centered on independence.

Q: When you were call to that first meeting, you were working –

K: For Amata. When I say working for Amata, I attended several Congress of Micronesia meetings as Amata’s guest. Basically I did some running around for him. That was very early in the congress days. I became less involved as time went on. At the final stages of the discussions for independence I was totally out of it. I was there for the initial meetings and for some of the planning and discussions about whether or not it should go forward. But when it came down to the actual negotiations and the plan, I was out of it. It was pretty well restricted to the Marshallese leadership.

Q: The business you’re talking about eventually became PII

K:  Correct. We slowly closed down Acme Importers

 

How the Marshall Islands Started Independent Copra Production:
the Rise of Pacific International Inc.

Q: Why don’t you talk about that, the transition and the people you were meeting at that time.

K: Charlie became more involved in the government. Charlie Dominic. He was in the Congress. He became a senator. He was the . . . minister of foreign affairs? And he had less interest in the business. Because of this loose jointing with other issues, it’s a little difficult to give a chronology of the chain of events .

There was a committee formed under the Marshall Islands government and that was the Marshall Islands Development Authority [MIDI]. I sat on that committee.. Charlie had an executive position on the committee – was the chair? … Anyway, the assignment that I got was … From early days, Amata had put me on Copra Stabilization Board. This was the Marshall Islands representatives that went to Saipan to sit on the board and decide what was happening with copra. With the stabilization fund and the sales and what-have-you. Another long story.

The delegate that I mostly traveled with was Andrew Isaiah. He was the Marshall Islands delegate. He and I used to go on a regular basis to Saipan to meet on this copra board. I had proposed – we had problems marketing and we were very much under the control of a company in Guam. They dictated the terms, they made the sales, copra could only be sold through them. Sometimes copra would be in storage for months and months – it was a financial hardship. Sometimes the copra would spoil . We weren’t getting any value [from this arrangement with the company in Guam, so] we were looking for what we could do. My pet project was trying to go into copra processing.

When the Marshall Islands Development Authority was formed, this became my project .. to try to do something about copra processing. Charlie Dominic had been in the Philippines and had met an American, Frank Jerome, who had a major position on copra processing in the Philippines. That was one input that I had. Charlie had made friends with him and stayed in contact with him and in the Philippines Frank Jerome had started actually a company, the Gatsby Oil Company. They were first copra processors. Up to that point copra had been exported to Europe. Actually Frank Jerome had developed the continuous process machinery  which was mean for [processing] animal fats, for rendering cows and what-have-you, and then  got adapted for use on vegetable seeds and oil-bearing seeds in the vegetable industry and then [applied] to copra. This guy was still alive and he’d actually been one of the inventors/developers of the machinery that did the extraction of coconut oil and animal oils, animal fats …

He [Frank Jerome] was operating in the Philippines, he had started this company called the Gasper Oil Company. He sold it – I believe the name of the company was Aiello, a very famous, large Philippine group. Eventually the government of the Philippines nationalized it. Today … it comes under the umbrella of this company Frank Jerome started. Charlie Dominic had met him and formed a friendship.

His [Jerome’s] company in the United States, Baker Commodities, was one of the first people I approached when I was given the mandate to try and do something about copra. First we had to get some see money. We went to the Congress of Micronesia. They referred [us] to the Trust Territory government. The Trust Territory government wasn’t very sympathetic to it [the idea of independent copra production in the Marshalls]. What we needed was a plan, basically an implementation plan. We were at that time dealing with a company, Holmes and Naver, they were doing the clean-up work at Bikini Atoll. They were a major U.S. engineering company. I had spoken to them about helping us develop a plan for copra processing because they did major, international processing. Coal, uranium, all this sort of thing.

So I went back to California and spent about three months writing a proposal and coming up with a book on why we should do copra processing in the Marshall Islands. We published the book … what year was that? I’m sure it was in the early 1970s. We presented this book to the Trust Territory government and we convinced the Congress of Micronesia to put up $300, 000 in seed money. With the seed money I had further discussion with Jerome. To make a long story short,  he agreed to finance the construction under certain covenants and agreements wherein we operated it under contract. We had certain guarantees from the government and we would pay ourselves on a regular basis, his group, pay until the construction costs were liquidated and at that point the RMI [Marshall Islands government] would own the facility. We had the management contract to that point.. 

Mr. Jerome said, “Look, Jerry Kramer, if you believe the Marshall Islands government will adhere to the covenants and rules and regulations that we’re putting into place and  will allow us to operate ad pass along the construction costs, then to prove that, you come to work for me.”  So I went to work for Frank Jerome. That was the only way this project was going to go forward. We had $300,000 and it was a two-million dollar project. He would put up the rests of the money and build the plant provided I went to work for him. So I came back and disclosed this to MIDA.

By this time Acme Importers was doing less and less business. We formed a company Pacific International Inc. The primary purpose was to build Toboolar  But that gave us some construction capacity. I wanted Pacific International to continue. Charlie Dominic wanted out and Shujiro Wasi eventually wanted out.  We looked at the fair market value of the stock at that time and the value of what we owned together. I paid off Charlie and Shujiro. …

Pacific International had me as a small piece and Jerome and his people as the major owners. When we built Toboolar, I wanted this thing to continue and they really didn’t. So they agreed to sell me their shares. I eventually … bought all of their stock. Eventually I bought all the stock and distributed to my wife and children, so this is true family-owned corporation. In the meantime we managed Toboolar. Where we had expected to pay the average price for copra that was being paid throughout the Pacific, and with the added value pay ourselves off over a five-year period, we were able to pay ourselves off for construction costs in three years. And pay amongst the highest prices for copra in the Pacific.

In other words, the plan for copra processing in the Marshall Islands . . . worked. We had control of our product, we had added value, we provided more jobs, and making a profit that allowed us to pay more for copra than was being paid anywhere in the Pacific. The government asked us to stay on. … Since our start in 1976 and the opening of Toboolar in 1979, we have had renewed contracts and are still under contract to manage the company. We don’t participate in the profits. We have a fixed annual fee for doing our management. And we do the management. We’ve continued on. I can’t say it’s been tremendously lucrative for us but I feel it’s a community responsibility. I’m so proud and pleased we can continue to contribute to the economy of the Marshall Islands by being involved in managing basically the only indigenous operations that really brings in revenue and affects people so much in the outer islands.

Attitudes Towards Independence in the 1960s and 1970s

Q: A couple of questions for clarity. Why do you think the Trust Territory government did not like the idea initially? And can you clarify which governments you’re talking about because at this time the Marshall Islands had what kind of government?

K: This was still under the Congress [of Micronesia]. But we had a government locally. … We had a local congress and a local government. And we still had the Congress and the Trust Territory government—

Q: On top of that.

K: That’s right.

Q: So there were three levels of government. 

K: The Trust Territory government under the mandate from the United Nations was leading Micronesia towards their independence.

Q: That was part of their charge?

K: That was their mandate – they were charged with that.

Q: Is that different from the way it was in the 1960s?

K: No, that was technically their responsibility, they just weren’t doing it.

Q: But in the 1970s it began to change.

K: Yeah  At this point we had astute Micronesians who were saying, “Hey, this it. We’re supposed to be leading towards self-government, let’s go for it.”  By this time we had Micronesians, who, one way or another, had been able to get the education and the personal financial ability to … present themselves appropriately. In the sixties it couldn’t happen. Funds weren’t available, organization wasn’t available, and the education level was limited. But in the seventies it was coming along.

Q: Back to copra. It was critically important to the economy. Why do you think the Trust Territory government was unresponsive to having indigenous production?

K: I’m not completely sure and I don’t want to sound paranoid but we understand that at one point, Atkins Kroll was an arm of U.S. intelligence in Guam.

Q: Who was Atkins Kroll?

K: The contracted company who purchased 100% of the copra and handled it for the Trust Territories. No one could market or manufacture or do anything – it had to go through Atkins Kroll. And Atkins Kroll dictated how it was handled. I think that another thing was there wasn’t a lot of respect or regard in Saipan for the abilities in Micronesia  that were developing. That came slowly. I believe that it was like a light bulb that was coming on slowly and people were realizing that there were competence and capabilities inside Micronesia in the different district. I that their own investigation and determination that we weren’t really up to speed in being able to handle what we were asking for, that our production was too small, it didn’t have a future. It may have been … a preconceived notion they were looking to validate.

But they had studies done. They did have studies done. … There were some players … There was . . . this core group in Saipan who felt they knew what was best and any new ideas they would take with a grain of salt. However, the Congress of Micronesia – you’re talking about a very intelligent group of people, elected from their constituents, who could realize that what we had proposed had merit, and they approved the three-hundred thousand bucks.

Q: So PII gets off the ground in 1976?

K: Mainly to build Toboolar.

Q: In ’79 Toboolar, for copra processing, opens up. Talk about what happens after that in relation to PII and in relation to people you knew at the time.

K: First of all, let me tell you about the decision to go head with building Toboolar,  The rest of Micronesia slowly but surely went out of the [copra processing] business. There’s no more copra production anywhere else in Micronesia. We’re one of the most successful operations today all of the Pacific – of the small islands. We can’t compete with the Philippines, which produces 98% of the world’s copra. But Papau, New Guinea, Fiji, Samoa, we wound up being the most sophisticated operators in the copra industry. I say that with a bit of pride. Now …?

Amata Kabua, Nauru, Final Push for Independence, and Continued American Control

Q: At this time, the move towards independence and how things were changing?

K: You can imagine the boom in the economy when suddenly all of the tax revenues  and fees  from Kwajalein are going to the government of the Marshall Islands. The fact that the Marshalls wanted indepence, that Saipan wanted to be a commonwealth – the people of Saipan always felt they were Americans – that Palau wanted to be independent. There was a certain amount of interaction between Palau and the Marshalls in their desire for independence. Tha was … he was like Amata. [struggles to remember name of Palau’s leader at the time.]

Amata Kabua was the father of this nation, he had a lot of guts ,he took a lot of chances, he was educated, intelligent. He was a leader who was born with the authority [he was an irooj, a chief]. He was eventually going grow into it and because eh was raised as a leader, he was able to handle it. I make a distinction here because we have a lot of leadership that suddenly comes to power, is not used to power and is not used to handling it.

Amata was used to handling the authority. He grew up with it. He was able to present himself  very well. There were a lot of other people who had major involvement. It wouldn’t be right not to mention Tony Debrum and some of the other people …

There are a lot of other stories that fit into this and they’re coming to mind as we’re discussing. One of them is the input that Nauru had. Hammer DeRobut was the father of his country. He demanded independence, declared independence, and became independent. Ultimately that’s what happened to the Marshalls. We declared that we were going to be independent and that was the end of it. We just went for it …

 Nauru got involved  I remember Hammer DeRobut talking about the inalienable rights to sovereignty that the Marshalls had, talking about that to some of our leadership, and I remember that he had a definite impression. There was a lawsuit about funds he may have put up to assist the Marshall Islands. The lawsuit was the result of a report by a major newspaper … that Nauru had in fact put up a few million bucks  to help the Marshalls fight for their independence. It was reported in the newspaper. I can’t go into all the details now but I was even a witness in the case. But basically Hammer DeRobut filed suit against Gannett news and I heard there was a multi-million dollar settlement. But there was definitely some influence from Nauru in the Marshalls going after

Q: What was wrong with that?

K: Not so much that was wrong with it but the way it was reported. They felt the reporting was underhanded. … In any event, it was becoming obvious, with the Marianas wanting to be … a commonwealth of the United States, Palau wanting to be independent, the rest of Micronesia feeling some sort of kinship. I’m not sure how that kinship goes. The failure of the Trust Territory government to really get a feeling or n affinity or a program where there was any sort of unity in Micronesia. To travel to another district, or to travel to your headquarters, to Saipan. was an expense the average Marshallese would never be able to afford. There was no attempt to get products going from one place to another, no attempt at commerce, so the Trust Territory government did very little.

The only unity was in the Congress [of Micronesia]. But we had our own customs, our own languages … In any event, the U.S. government finally realized, and agreed, and started negotiating independence, and negotiating the compacts. … People like Tony [Debrum] and Charlie [Domnic] are going to be better suited to give that information [about what happened when]. 

Then we became independent.  The Congress was dissolved. All during the Congress of Micronesia and negotiations for nuclear damage and what-have-you, the place started opening up, we got a little bit of tourism, a little more money came from Kwaj. They [U.S. government] started … recognizing the Marshallese rights. I don’t know if you know the story of the sit-ins on Kwaj., where under Imata Kabua’s leadership, one of the major elaps [land owners] over there … re-occupied some of the facilities that were being used in the mid-corridor [middle of the Kwajalein atoll] and on Kwajalein itself.

My understanding is that in fact the leases [of Kwajalein to the U.S. government] had expired and the Marshallese had every right to move back to their land. This was a turning point in their negotiations … .  I think there was a problem in that Amata was the president and Imata [his brother] was the leader of the group that was trying to assert their rights on Kwajalein. It did result in major increase in benefits for the people on Ebeye and the landowners and leadership received.  Without going into a long story of details .. if you look at the situation today, Kwajalein is nearly a country club and Ebeye is a ghetto. There’s no way you could say that the right thing was being done.

Who’s fault it is? Marshallese contributed to the fault. the U.S. contributed to the fault, the people of Ebeye, the national government, no reasonable person could say that the situation on Ebeye was reasonable … And that’s the situation today. It’s unreasonable for so much development to be across the lagoon and for so little to be there at Ebeye.

There’s still some control by the [U.S.] military over Ebeye that influenced and resulted in the lack of our ability to develop. I remember … I was involved in brainstorming the causeway [between Ebeye and Guegegue, its neighbor island]  … Initially, the brainstorm was that the local airline would have a runway – the road to Guegegue would be a runway  and we wouldn’t need to stop in Kwaj. and go through what Kwajalein [U.S. officials] make Marshallese go through [security protocol] in order to travel through the Marshall Islands and go to Ebeye.

The [U.S. Army] Corps of Engineers came through with a program  to electrify Guegegue and they insisted that it be on poles above ground. That negated the possibility of putting a runway on the causeway. Was that planned/? I kind of feel that it was planned. Kwajalein wanted the control of who entered and exited. And to suddenly have Ebeye [just two miles away] with an air strip would have been a tremendous loss of control. So I believe that the program with the Corps of Engineers was deliberate.

Of course Kwajalein has done a lot of good, there’s a lot of money been put up, and  maybe some bootstrap operations could have been done better. Even  the distribution of the funds, which the U.S.. now finds to be inequitable, where the irooj (chief) gets a third, the elaps [landowners] get a third, and the rijerbal [workers] get a third -- a lot of that program, be it good or bad, was initially reinforced by the U.S. government. My feeling is [it] made it more difficult for ongoing negotiations. By not keeping it sort of a  democratic, equal-voting situation, U.S. again had more control about what development could take place – right next to where they did all this sophisticated testing.

I feel there are a lot of areas where the Marshallese could have boot-strapped and done better on their own. However, there’s no getting away from the fact that they were severely limited by, mainly, the U.S. military for the use of the land the military made and the restrictions the military imposed …