On December 7, 1941, at 7:55 a.m., the Imperial Japanese Navy attacked the fleet at Pearl Harbor, Hawaii with carrier-based aircraft, bringing the U.S. into the Pacific war. Between 1943 and 1945 the Second and Fifth Marine Divisions arrived in Waimea to recuperate from engagements that had taken a heavy toll and to stage for the protracted war that would eventually lead these same Marines to the battle of Iwo Jima. Named after a bloody battle that took place in the Gilbert Islands in November, 1943, their new home was called Camp Tarawa.
The Camp was located on Parker Ranch, whose management did not permit drinking in town (a policy aimed at the paniolos). This meant that Honokaa was the closest “watering hole” and general supply center to Camp Tarawa, and during this period the town of “Honey Cow” (many marines had trouble pronouncing “Honokaa”) witnessed another economic boom from the increase in business from both Marines and cowboys. The merchants of Honokaa were happy to provide laundries, bakeries, office supplies, communications, bars, theaters, hotels, and even more illicit offerings to the troops. Though few physical remains are left of Camp Tarawa, a large plaque and memorial can be visited along Mamalahoa Highway in Waimea Town.
In the decade between 1950 and 1960 the Hamakua Coast experienced a decline in population and a steady slowing of economic activity, as did much of the state, as urban and tourist-related businesses became the engine of employment in the Islands. People left the town to be closer to the hotels and tourist businesses in Hilo and Kona, and the major highway built to speed travel around the island between these two urban centers bypassed Honokaa.
To cut costs, plantations began to consolidate. Between 1972 and 1978 eight plantations and mills merged under the Theo H. Davies Hamakua Sugar Company. Unfortunately, competition from sugar producers around the Pacific, high labor costs, transportation, and other increasing expenses thwarted the effort to remain competitive. Hamakua Sugar Company was forced to declare bankruptcy, and harvested its last crop on October 10, 1994.