The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1903-04-09
No issue of Stock
Made Beyond
Authority.
Frank Statement OF the Com
pany's Operations Made by
Its President.

4
yesterday. Mr.. Keliinoi, from the spe-
cial committee appointed to look into
the affairs of the Rapid Transit and
Land Company, submitted the follow
ing report:
your committee finds that the Rapid
Transit CO. is existing under powers
contained in franchise granted to it by
Acts SO and 20 of the Laws Of the Re-
public of Hawaii of 1898.
These acts-especially Section 81 of
Act ss-give the company very broad
rights as to increase of capital stock.
The capital thereby can be increased
to such sum as win represent the ac-
tual cost of the railway plus 25 per cent
of such cost.
1.-The actual cost of the company on
the s1st day Of December. 1902, was
1861. 7ss.so
twenty-five per cent of that is s24o.-
442Oo.
Therefore the company has the
right to issue stock to the sum of
81. 2O2, 211.
They have issued 100000 capital
stock and are therefore within their
right.
ut is stated that the last issue of
capital stock of $500, 900 does not rep
resent actual cost from stockholders
but that bonds were issued to secure
cash, and that when the bonds are fl
nally paid, the money to pay the bonds
will be taken from the earnings of the
company and thus the government viii
be deprived of its share of the profits
above per cent.
Granting this to be true. on first
appearance it would seem the govern
ment is or will be deprived of its share
of this gain above per cent. but Sec
ton II of the same Act gives the COM
pany the right to put any or all of the
income of the company in operation,
repairs, renewals, extensions, interest
and every other charge and cost prop
erly or necessarily connected with the
and operation of said rail-
way and makes these charges lawful.
$50 it seems to your committee that
the only thing for the government to
do is to wait until the Honolulu Rapid
Transit & Land Co. is ready to pay
the half of the gain above per cent
of the capital, then receive the same
with thanks,
Your committee encloses an expla-
nation from Mr.. Thurston, president of
the company, which your committee
offers as a part of this report
Honolulu, T. H. March %, 1908.
To S. E. Keliinoi, Chairman of House
Committee on Resolution Concern
ing Honolulu Rapid Transit G
Land Co.
Sir: In confirmation of the oral |
statement yesterday morning made to
your Committee. L hereby place in
writing the points then made.
The resolution under which your
Committee is acting assumes, "a that /
he Rapid Transit Company is acting
lnder an agreement with the Govern
nent; (2) that its originally authorized
stock was 100000; (sl that it has wa
cred its capital by further increase of
800, 900; (D that it has unIawfully used
part of it's earnings in extension of its
inc.
In reply to these suggestions I beg
o present for your consideration the
oIIowing. viz:
ID The Honolulu Rapid Transit and
land Company is not acting under any
agreement with the Government. It's
powers and its sole powers are contain
d in the original franchise granted to
t by Acts SO and 20 of the Laws of the
Republic of Hawaii of 1898 and under
he ratification thereof by Congress in
he Organic Act and the subsequent
atification of the said franchise by
President Mckinley on June %, 1900
In addition to the foregoing franchise
he Rapid Transit Company is organic
d as a corporation under the general /
corporation laws of the Territory.
C2) The original capital stock of the
ompany named in it's franchise as be-
ng that at which it was to incorporate
vas 100000 instead of 100000 as sug-
,ested in the resolution Il