Evening bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1895-1912, 1902-04-20


In the first place It is a mere lease.
hold. Mr.. Damon in his testimony
before this Court stated what he
thought would be the value of that
leasehod in the absence of a sugar
plantation. He was witness called
by the administrator. The bonds he
thought would be practically worth
less If the plantation there should not
be success. And right
here If the Court please, 1t Is my duty
TO say and to insist that II is not the
proper thing for any sugar securities
to be taken by a trustee, no matter
how much he may desire to see the
sugar industry succeed in this coun-
try, no matter how much he may be-
lieve it will succeed, IT CANNOT BE
DENIED THAT 1T is A SPECULA-
TIVE VENTURE IN EVERY IN
I STANCE. The sugar trust in the city
of New York controls the price of
sugar today and If they put the
price down a quarter of cent lower
than it is now, 1t remains to be seen
how many plantations in this country
will do more than take of their stand
. ing cane. II labor should go up or not
be available IL is a matter of the grav-
est concern whether any plantation IN
this country will ever plant another
crop. Now take again the
Kahuku plantation bonds. have refer
red TO the fact that Sl35, 1000 had to be
realized upon some of It's bonds before
agents could be found to carry Il on.
Who took those bonds? James Camp
bell the lessor took $4,000. James
Campbell who would get 5 per cent
of all the sugar made on that planta.
ton If 1t should succeed. A pretty
good motive one would say, for taking
the bonds. Allen & Robinson took
$4,000 for the very good and bust
ness-like reason mentioned by Mr..
/ Bolte. one of the officers of the COM
pany, because they hoped and expect
ed to do business with the plantation
in selling It coal and lumber The
honolulu Iron Works took S2S. 900 but
the evidence is they took II in payment
of what was owing them. Theo. II. Da-
vies & Co., took $4,000 for the purpose
of running a little store over there at
Kahuku. Grinbaum & Co., took $4,000
the agents of the plantation. They
were pretty safe, having the handling
Of all the sugar that would be made
there in taking $4,000 in bonds. Bishop
took $4,000. Bishop & Co., whose
owners have been interested in almost
All the financial ventures OF this coun-
try, cautious and conservative firm.
| But that cautiousness and conserva-
! tism might make 1t imperative upon
that house to stand to the relief OF
certain firms and help them out to a
certain extent. These invest
ments are not bad investments on ac-
count of the political affairs of this
country, not on account of the distrust
In the United States concerning the
silver business: II is not the failure OF
| the Earrings, ii is not the financial
| disasters in Australia, 1t is not the
/ void cat railroad ventures in the Ar
/ gentine, which makes these securities
bad securities, IT is BECAUSE THEY
ARE EXPERIMENTAL OR BECAUSE
THEY ARE NOT BASED UPON
SOLID VALUES OR PERMANENT
| VALUES. They may become better
and they may not become better that
is not the question. They do not
come within the rule with regard to
trust investments that is the matter
with them. submit that when the
bonds of sugar plantation the shares
OF which receive no dividends are is
sued, 1t is an EXTREMELY RISKY
THING TO TAKE THEM. And why?
II the plantation pays no dividends
to its shareholders II Is because sugar
does not pay. What are the bonds
worth then? What can you do with
sugar machinery except for the manu-
facture of sugar? II has always seem-
ed to me that these mortgages on SUI
gar plantation were somewhat like
the mortgage of the while elephant
When the time comes that the prop.
crty is worthless as sugar planta-
= ton and these mortgages are fore
closed you then simply get the value OF
the property for other purposes be-
sides sugar and nothing else, because
the mortgages would not be foreclos.
ed II sugar were paying"
THE SUGAR PROSPECT.
Judge Humphreys resumes his own
observations with a discussion OF the
sugar situation, beginning:
Assuming what l do not for a mo.
ment belieye) that the present values
OF the land and machinery of the Wal
alua and McBryde companies are fairly
estimated, 1t does not all follow that
such values have that stability which
trustee should require for II goes
without saying that the permanent
: value of any mortgage security must
depend largely II not entirely upon the
permanent earning capacity of the
property mOrtgaged and where such
earning capacity Is in the least degree
! precarious or rests upon conditions
) and numerous contingencies beyond
the power of the mortgagor to con-
troll or protect, ii follows that an in
, vestment in such security Is specula'
tive in the highest degree. If the pro
, duction of cane upon these planta'
lions should be discontinued the land