The Hawaiian gazette., 1899-11-10
CAUTIOUS risAxCiERiNG.

The Eva Plantation Company pro-
poses to contract a loan Of $500. 900 for
making economic improvements. This
company has already issued 5000 900
in stock for a substantial equivalent
OF cash. and has issued $1,000, 900 in
stock In the nature OF q stock dividend.
This additional stock represents no
cash. but does represent the probable
tiles and possibilities OF the future
value of It's assets and its net income.
But the needs Of the plantation call
for further investments and II Is now
dcne by contracting large bonded
debt. Has a sound principle OF bust
ness been followed? There are few
principles of business which, though no;
followed by young and inexperienced
Communities, are closely adhered to In
the older communities, which are con-
sentative. and have learned some les
sons from bitter experience. II Ia
hardly to be expected that business
men who are suddenly confronted with
Extraordinary conditions. ,and unex-
Ipectedly large financial problems.
Should study the methods and exper-
fences of older communities. Each
community must have It's own exper-
fence. and abide by It,
The Advertiser, some months ago.
indicated what the history of the
values Of the stocks in all new indus
trial enterprises has been. in other
lands. The events here show that
commercial and financial history only
repeats itself. And SO Il will to the
end. Out OF every one hundred indus
the last forty years on the Mainland.
nearly ninety-five have gone to the
wall. The American brain and ener-
|gy has failed to sustain them. The
I"unknown factors" caused their ruin.
This fact is not an argument against
1.-The promotion of Industrial enterprises.
New enterprises must be constantly
promoted. The conditions of com
merce demand It, But this fact
teaches the need of the most conser-
|vative conduct of valuable properties,
and the difficulty of predicting what
the dangerous and unknown factors
may be
Secretary of Agriculture Wilson
has predicted that within ten years
the United States will supply their
own consumption Of sugar from the
sugar beet. II this should prove to be
true. the country will. after that peri
od, become an exporter Of sugar. and
be forced into competition with the
sugars of the world. This prediction
OF the secretary Is. in the opinion Of
many whose judgments are entitled to
respect. optimistic and exaggerated.
But Willetts Il Gray's circular declares
that the sugar beet crop OF the Main
land will. this year, amount to 10000
tons. This crop will, therefore. sup
ply one-twentieth part OF the American
demand for sugar. The rate of in
ease in this supply during the next
ten years. is one Of the unknown
factors"
The protective tariff encourages an
Increase in the Hawaiian product of
cane sugar but likewise stimulates the
/, rapid production of cane and beet sugar
in the States. II the present protective
4, raptlly 40
, arrival of the time, when the States
will become exporters of sugar, and
just as the price OF wheat at home is
, fixed by the market price OF the sur
plus wheat In foreign markets, the
price of American sugar will be fixed
by the price Of sugar in London. Even
at the lowest prices of wheat. 1t has
continued paying crop In the United
States. under intelligent management
So the sugar crop, under equally good
management. will be a paying crop.
But the conditions Of the sugar in
dustry in these Islands. confronted as
1, may be. by an over-production with
in ten, fifteen or twenty years, de-
mand the utmost conservatism In
management. The practice OF holding
. large reserves of cash, is not favored
here. but the men who have. and who
inherit, large experience IN these af-
fairs, in the Older communities, know
the value of 1t. These reserves are the
reservoirs which supply nourishment
when the streams of prosperity sudden
ly run dry.