The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1896-04-14

= matter which concerns every taxpaye
in the country.
: The rate of interest paid on bOrrowe
capital by the Government is not onl
7 an indicator of it's financial strength o
= weakness, but it also affects the valu
D of all property within It's borders.
The higher the rate Of interest pai
by the Governmu Mt the higher must tn
rate be fixed for the Individual bor
rover, and a corresponding deprecia
ton will be made in the value of al
property. A government which pays
higher rate of interest than it ought t.
pay loses not only in interest account
but also sustains reactionary loss il
taxes, through depreciation of all prop
erty. When money is scarce and the
rate of interest high, all lines of bust
ness languish and progress III every de.
partment of the country is slow.
If the country is to make any pro
| gr,ss, if the Republic is TO be an i'm
provement upon the Monarchial form
of government, some sound financial
policy must be adopted and carried into
effect, by which the sugar industry and
the real estate, other than the homes
of the middle and poorer classes, shall
be taxed at the prescribed rate made by
| law-or if the law is at fault it should
at once be so amended that the burden
| 0f Oh -
there is to be inequality tolerated in the
| assessment and collection of taxes,
| feel sure no honest, manly man will
agree that the heavy end of the burden
should be borne by the professional
| men, salaried men, laboring men and
widows and orphans.
All professions administering to the
care and health of the people should
be encouraged and not driven out Of the
country by obnoxious and oppressive
license fees. A side light has recently
been thrown upon the chief source from
which a tax revenue ought to be de-
rived, revealing the indisputable fact
that if / per cent. instead of 1-3 of 1
per cent. had been collected from that
source the treasury would not be short.
The proposition to consolidate the
is the other side of the financial prob
lem-quite as important as the current
revenue. Why any man who has given
this question careful thought can op-
pose that measure, and urge that the
debt should be left as it now stands; or
favor the issue of bonds to refund the
debt, at a higher rate of interest than
would have to be paid in the cheapest
money market in the world, [ am at a
loss to understand.
If money can be obtained on our
bonds at per cent. or Az per cent, at
par and at no expense, so much the bet
ter for this country. But if expense
must be incurred, let the bonds be
placed at the least possible expense,
even if it should cost 171a per cent,
which is the maximum limit proposed
by Minister Damon to cover all eX-
pens connected with the loan, includ-
ing commissions and discounts.
For the study of those who oppose
foreign loan on the ground that it will
possibly cost this country large bonus
which they say is to be saddled onto
posterity, respectfully invite their at
tention to the following illustration of
my view of the matter.
| am informed that the average rate
of interest on the public debt as it now
stands is 7-16 per cent. Now, to il
lustrate my point, let us suppose, for
example, that there are two corpora
tions in this city, each with a debt of
Sc, 800, 900, represented by bonds issued
upon the property owned by them. The
bonds in each corporation are held by
only a few of the stockholders. The
time has arrived when the 1920 year
bonds may, at the will of the stock
holders of each corporation, be called in
and paid off, or refunded by new is
sue if the stockholders can find money
on more favorable terms. We will des-
ignate these two corporations as a
and B.
The stockholders of A have meeting
and the question of refunding is dis
cussed. The few stockholders who hold
the soft investment in bonds paying
an average of 6-17 per cent. oppose
any change or attempted change, "as
it will injure very seriously the credit
of the company, and the suggestion of
the treasurer to pay London syndicate
171a per cent. in expenses, commissions,
etc, is simply ruinousr' The stock
holders who have no bonds make a few
figures and are frightened half out of
their wits when they find that 171a per
cent on 100000 is 100000. ITO pay
that amount would ruin us. sure Oh.
no. Home loan is good enough for us,
even at the present rate; and, too, we
want 10 keep the interest in the hands
of the stockholders of the company; we
know what we are about"
Company B holds a meeting. The
treasurer makes the following state
ment:
''Ten years have expired since the is
sue Of our 1920 bonds. Though over
half of them are held by a small mi
nOrity of our stockholders, for whom
this company entertains the highest es-
TEEN, and appreciates fully their friend
ly helpfulness in coming forward at