On December 12, 1899. the first case of the bubonic plague was confirmed by the Board of Health in the city of Honolulu. Quarantine of a section of Chinatown was first established on December 13th and measures were taken to eliminate unsanitary conditions. Unable to contain the plague. the Board of Health decided to destroy infested buildings through controlled burning. The first fire ordered by the Board on January 1. 1900 successfully destroyed a section of condemned Chinatown buildings. Successive fires were equally successful until the fire set on January 20, 1900 went out of control due to a sudden change of wind. Within a short period of time most of Honolulu's Chinatown, not already burnt in previous fires, was almost completely destroyed. The area affected stretched from River Street, mauka to Kukui Street, makai to Queen Street and in certain sections as far Diamond Head as Nuuanu Street. As a result of this unexpected fire, 5,000 to 6,000 Chinese, Japanese and Hawaiians lost their homes and a temporary relief camp was built in Kalihi to house them.
In February, despite rigid quarantine measures in Honolulu (specifically aimed at vessels and their cargoes), several plague cases broke out in the Chinese quarters at Kahului, Maui. After relocating tenants in these infected areas. this section of Kahului was also burned down on February 12, 1900.
To compensate fire victims, both in Honolulu and Kahului, the Territorial legislature mandated the formation of a Fire Claims Commission through Act 15 of the 1901 Session (approved April 30, 1901). This Act provided "for the ascertainment and payment of all claims which may be made by persons whose property was destroyed by fire in the years A.D. 1899 and 1900 under orders of the Board of Health." It further established a commission consisting of five persons, one of whom shall be an Attorney of the Supreme Court, and all five appointed by the Governor of the Territory. The commission was mandated to hear, investigate and adjudicate all claims for damages and was given the same power as that of the Circuit Court to compel attendance of witnesses, to punish persons guilty of contempt and make all rules necessary for conducting its business. They had the power to appoint a clerk, stenographer, bailiff and interpreters. A claimant was required to submit an itemized statement of the loss sustained, date of loss and nature of the property lost. Only losses resulting from the destruction of or direct damage to property by the fire or removal because of the fire was eligible for compensation. No speculative damage, loss of rent or use of property, or loss of profits through interruption of business was eligible to be claimed.
The Fire Claims Commission, with F.W. Macfarlane as its chairman, began taking evidence in proof of claims in May 1901 and continued in session until June 1902. The number of claims filed was 6,784, totaling $3,175,132.90. After hearings and adjudication, the sum of $1,473,173 was awarded to the claimants. Although the legislature had appropriated $1,500,000 (through Act 15) in 1901 for payment of the claims, it provided no means for obtaining this money. By act of the U.S. Congress, approved January 26, 1903, provision was made for payment from the Federal Treasury of $1,000,000 for reimbursement of claimants and the Territorial treasurer was in addition authorized to issue fire-claim bonds for the payment of the remaining debt.
The commissioners having completed their duties, adjourned on July 25, 2903, after having adopted the following resolution:
"Whereas, the commissioners having completed their duties and being about to finally adjourn the commission, the clerk of the commission is requested to reply in writing to all persons now having communications on file with the commission, filed since the adjournment of the commission taken after the signing of awards, notifying them that no further business would be passed upon by the commission, and referring them to the government for consideration of the questions referred to in their communications."