The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1902-08-19
|GOOD WILL
OF NO VALUE
Case of Brewer &
| Coin Tax APP
peal Court.
BANKERS GIVE
THEIR TESTIMONY
Question Hinges on Taxation OF
Bills Receivable and Foreign
Stocks.

Va protest from an increase in taxation
of over one million dollars was heard
by the tax appeal court yesterday aft
ernoon. The return made by the cor
poration was for S107,O3S, and this was
increased by Assessor Pratt to $1.121,-
1877. who estimated this raise as the
value of good WILL" being represented
by the premium of over four hundred
per cent at which the stock was held.
The evidence before the appeal court
brought out some interesting facts rel
alive to the business of the corporation
and the condition of the sugar indus
try at present, with it's prospects for
the future. The witnesses for the cor
poration concurred in the opinion that
good will was not of value and several
of the directors figured that the COM
pany was already paying taxes in ex-
cess of it's valuation. Brewer & Co.
contend that they cannot be taxed on
stock in Hawaiian corporations which
is admitted by the assessor. Further,
that they cannot be compelled to pay
on stock in foreign corporations and in
California companies, or upon bills re-
ceivable, which amount to half a mil
lion dollars. This is not conceded by
the assessor, who asserts that the
money is an asset of the corporation,
and should be taxed, even though the
plantation which borrows the money
also pays taxes upon it. There was
considerable discussion as to tangible
and Intangible property, though the
two kinds were hardly distinguishable.
E. F. Bishop of Brewer & Co. was the
first witness put on the stand by Judge
Whiting, who appeared for the corpor-
alton. He testified that the value of
Brewer & Co. as an enterprise, exclud-
ing sugar stocks, bonds, ETC., upon
which taxes were otherwise paid and
bonds and other property exempted by
law was the amount returned, $1O7,O
This was made up as follows: Lease
hold and real estate, $50, 902; cash, $3262;
merchandise, $SS17; commissions, s27,-
1854; office fixtures, $3.50; making a to-
tai of S107, 05S, from which was to be
deducted s24,S33 paid upon insurance
premiums. He listed also all the nom
taxable property, consisting OF Hawaii
an stocks. at their par value upon
which the tax was paid by the planta-
tions, at 81, 7SS, 1872. Stocks in California
and foreign corporations, s269, 102; bonds
in California and foreign corporations
$780, 900 and bonds in Hawaiian corpor-
atoms sos, 900. He said he could not
estimate the market value of the
stock, as it depended upon the number
of shares sold 1.-THE value. of the
stocks held by Brewer & Co. give the
value to our stock" said the witness;
but this stock is exempt and is paid
by the plantations, so 1 don't see why
they need be taken into consideration
at all. Everything in the way of tangf-
bic property not exempt has been re-
turned"
On cross-examinatfon the witness
said that he did not believe the control
of plantation agencies by Brewer & Co.
could be called of value if the corpora
ton was compelled to liquidate. He
testified that their profits depended up
on the prosperity Of the plantations and
the price of sugar, and that the good
will of the company was of no value.
He said that he had never heard of
taxing book accounts and that Brewer
& Co. had paid dividends every year
except 1892. Since July the dividend
because of the poor outlook for sugar.
P C. Jones testified that in 1901 he
had tried to sell 100 shares of Brewer
e Co stock for friend at 1875 and
could not find a purchaser, and that
the prospects for sugar were worse than
they had been for months. He did not
expect an increase in the price of sugar
at present. He considered the total
value of the corporation to be s2,423, 80
and taxes were being paid upon Ha-
waiian sugar stocks to the amount of
81, 7SS, 952, leases on Maui and Hawaii
were exempt, bills receivable to the
amount of 1862. 900 We're exempt, and no
taxes could be collected upon 1929, 900 in
bonds. making Brewer & Co. actually
paying taxes upon S247, 1888 more prop
erty than was held by the corporation.
Mr.. Jones on ss-examination said
the value of Brewer & CO. as an enter
prise was nothing. Il don't think the
good will is worth four cents in any
! business" said he, unless you get a
franchise that freezes out everyone
else" The commissions. he said, were
not taxable and to tax them would
mean about fourteen Der cent on the