As A RESULT of serious economic depression in Hawaii in 1872 with falling off of nearly five million pounds in the quantity of sugar exported, and the accession of new king, William Lunalilo, friendly to American interests, agitation for commercial treaty with the neighboring republic was resumed. In view, however, of the failure of the United States Senate to ratify the 1855 and 1867 treaties, there was general recognition in Honolulu that reciprocity alone was unacceptable to Washington and could be secured through the offer of quid pro quo. The first open and published proposal that Pearl River lagoon be offered in exchange for reciprocity appeared on February 8, 1873, in the Pacific Commercial Advertiser, then edited by William L. Green, member of Janion, Green and Company, successful English businessman of some twenty years residence in the islands who had served as acting British commissioner and had favored the reciprocity treaty of 1867. The editorial referred to the unsatisfactory business outlook and expressed the opinion that the time was propitious for the negotiation of reciprocity treaty with the United States. Hawaii, if necessary, could offer a position for harbor and coaling station .... We refer, of course, to the Pearl River.' Several persons high in authority questioned Minister Peirce about the probable reaction of his government to an offer of such cession, and he expressed the opinion that the United States would probably object to acquiring sovereignty over only part of the island. Admiral A. M. Pennock of the U.S.S. California believed that such an offer, if made, would be accepted. Maj. Gen. John M. Schofield, who, along with Brig. Gen. B. S. Alexander, was on vacation in Hawaii, seemed to share the same opinion. Actu-