The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1901-01-29
EARNINGS
THE GAUGE
MakaWeIi Plantations
Tax Valuation.
SUPREME COURT DECISION
Assessors Figures of s3,5oO,OOO
Upheld by the Bench
Yesterday.

The Supreme Court places the valua-
ton of S3,500,000 for the year 1900 upon
the property Of the Hawaiian Sugar
Company. or just 100000 more than
the valuation which the company be-
lieved should have been placed upon
it by J. K. Farley, assessor, for the
Island of Kauai. The opinion is writ
ten by Justice Galbraith ana concurred
in by Lorrin Andrews, member Of the
bar, sitting in place Of Chief Justice
Frear, who was disqualified. Justice
Perry dissents from the opinion. stat
ing that in his opinion the valuation
should not be more than $4,000 600. -
The court says that valuation. Of
$500. 900 placed on the sugar compa-
ny's property, for taxation purposes,
for the year 1900, by the tax assessor
and approved on appeal by the Tax
Appeal Court. is, sustained. and the
appeal Of the company dismissed. Thus
far the plantations have met with dis
comffture at the hands of the Supreme
Court in their appeals from the tax
valuation assessed upon their proper
ties. The majority of opinion Of the
Supreme Court has in each case sus-
tanned the tax appeal board.
The Hawaiian Sugar Company ap-
pealed from the decision of the Tax
Appeal Court of the Island of Kauai
approving valuation of So, 800, 0o0 The
appeal was taken from the excess over
s2,500,000, the amount at which the
property was valued the preceding
year, although the return of the COM
pany fo< the year 1900 was for lesser
amount. Under the law the property
of this company, like all other property
in the Territory, is required to be as
sessed at its full cash value The
difficulty presented in this case is the
correct method to be pursued in arriv-
ing at this fact, says the. court. The
company appealed to the Supreme
Court on the ground that the valuation
placed on its property was excessive.
1t is only fair to presume that there
was some one connected with the Ha-
waiian Sugar Company that knew the
full cash value of it's property on the
first day of January, 1900. The record
fails to show that any such witness
was produced by it either before the
Tax Appeal Court or at the hearing
of this court.
1.-THE capital stock of the company Is
81, 600 600, divided into 10000 shares of
the par value of $500. It's real estate
is all leasehold with thirty-nine years
to run Except Crown lands, area NOT
given), 2,444 acres of which was under
cultivation in 1899, and it has the priv
ilege under its lease of greatly extend
ing this area, upon the payment of a
fixed percentage of the sugar produced.
1t is shown that on January 2, 1900,
1922 so per share was offered for it's
stock, and 1927 SO was asked. That in
July, 1899 1000 shares of it's stock were
purchased at $225 to $240 per share,
which were taken to San Francisco and
made the basis Of 5000 900 corpora
ton known as the Maxwell Sugar
(y,,,,Y 49, n o. ha y Of
shares was $50, and that they were sell
ing in the open market for from $45
to $40 per share. The net profits Of
the appellant company for the year
1897 were $240,505. 10; for the year 1898
were $50S, Sc; for the year 1899 were
$666, $40. 20, an average net yearly profit
for said period Of SAT-, 955. so. The divl-
dends paid for the year 1899 were 81
per cent, or per cent less than one
third of the entire capital stock Of the
company.
Justice Frear, speaking for the SUI
preme Court of the Republic of Hawaii,
said: The tax in question is not an
income tax depending for it's amount
upon the income for the year preced-
ing, but a tax on property, the earning
power of which is one OF the most po-
tent factors in determining it's value
The earning power of this company
is certainly very great, anu amply to
justify the valuation placed thereon by
the tax assessor and the Tax Appear
Court. This much was reluctantly adj
mitted by the appellants principal
witness, the manager of the company,
Mr.. Morrison.
The valuation placed upon the prop
erty by the assessor and claimed by
the appellant to be excessive, estimates
the stock at SITS, IS less per share than
the manager of the company swears
is its fair market price. Under this
evidence the assessors valuation IS
$780, less than the fair market price
of the company. The appellant has
failed to show that the valuation of
$S.500.000 is excessive. and its appeal is
dismissed and the said variation for
the year 1900 is affirmed