The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1896-04-14

y
a critical period in the history of the
company. nevertheless IL Is only Just
to the majority of our stock holders TO
state that we are now at liberty at
any time which may suit our convent
ence to call in the old issue of bonds.
bearing interest as whole at 7-16
per cent In view of the privilege re-
served to the company in the issue OF
their 1920 bonds have made careful
inquiries in the London market con-
corning the feasibility of a loan upon
such terms as would make it an object
to refund our present debt The result
of my correspondence places me in
position TO make the following recon-
mendation:
BY vote of this company. authoriz-
ing the issue OF $4,000. 900 first mortgage
bonds at par. to bear interest not to ex-
coed per cent; time or life of the bond.
20-40 years; interest and principle pay
able in United States gold coin. either
in New York or London; will under
take to refund the present debt The
discount at which the bonds will be
sold shall not exceed 21s per cent. II
the stockholders favor the proposal they
will so instruct the board of directors.
and give them the necessary authority
to expend the amount required for act
ual cost of refunding the debt. not.
however, to exceed III per cent"
The stockholders of Company B vote
solid for refunding.
Results.
New issue of bonds at per
cent ................... S4,OOO,OOO
Less commission and discount
and other expenses included 100000
Netting to the company SO. 10000
Redemption of old bonds at
par So, 300. 00e
Company B has placed its loan. paid
all expenses, amounting to 500, 900. and
cancelled old bonds amounting, to 49,
300,0 Total expenditure for new loan.
$4,000, 900. The treasurer suggests that
the income will allow the payment OF
the interest on bonds $4,000 .000) at
per cent. which amounts to $3.50, 900; an
annual sinking fund OF ~ per cent. on
total bonded debt "a 200, 000). which is
$4,000.
He further suggests that this sinking
fund, paid annually and invested at
per cent, will in forty years tat ma
turity of the bonds) amount to $685.
600.
M tot 4 -
though sold at a premium. can be
bought at price to net 3 per cent.
which the treasurer recommends as a
good safe investment. The interest we
were paying on the old loan of s 6-17
on $3,300,000 amounted to S212, 437. so an
nually. The present interest. including
the sinking fund, amounts to s21O 900
annually.
We have, therefore, a net annual
saving, besides the sinking fund OF 81
1880. If we invest this also in United
States bonds netting per cent we shall
have from this source in interest and
principal at the end of forty years-or
at maturity of our 81, 900 900 loan, 1884,
l71.25, which amount added to the sink
ing fund of 1888 900. makes a total
sinking fund of All, 171.25 with which
to cancel the London debt of 81 600. 900.
Company A may be found at their
old location, where they continue the
home loan,' pay their interest regu-
larly and promptly, and at the end of
,orty years generously bequeath to pos
terity the old debt of SO 300, 900.
| do not propose that this Govern
nent should follow the example have
given of Company b and set aside a
sinking fund, if the money is needed for
sound public improvements. But have
shown that the present debt of the Gov
could be paid in the same way
'ut OF the possible savings to be derived
rom the reduction in interest.
The Government owns land which at
present is as useless to the treasury as
he mountains in the moon. and will re-
main so until they are made accessible
by good roads. When the country Is
opened up" and made attractive to
desirable, Industrious class of settlers.
hen and not until then will the Gov
be enabled TO sell its now
worthless lands and invest the proceeds
n sinking fund, which alone should
e more than sufficient to liquidate the
resent debt and cover all cost Of the
ecessary improvements to redeem such
and. The increase of revenue to be de-
iVed from the result of such a policy
'ould be very large
To my mind there Is great objection
D our stating to the world what we are
'illing to pay for the floating of loan.
ct the Legislature fix the maximum
mount of bonds to be issued, and the
ate of interest they shall bear. IL the
ate is made mot to exceed per cent.
AZ per cent" the maximum rate of
iterest will be demanded. The same
lie will also apply to the expense; the
Ill limit allowed nv tho aoioIot,,-o