The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1903-03-04
SINKING FUND FOR BONDS

Senators. whose interest IN the future
of the Territory is as acute aid strenu-
Gus as that OF any other inhabitant,
have laid with fattering JUNCTION to their
/ souls the fact that the law setting
aside tn. realization from land sales
accompIishes all that is needed for the
creation Of a proper sinking fund for
the prospective issues of bonds Of the
Territory.
The law is not new one, and II is
fair to say that it's working has not
been such as to impress with the idea
OF its value. Some of the best judges
Of the Hawaiian public domain are of
opinion that there are not more than
81 600 600 worth Of public lands. This is
not the worst feature. from the stand
point OF the value of the sinking fund
made by the setting apart of realiza-
lions. for the sale of lands is now pro-
crossing and has continued recently at
the rate OF close to $4,000 year. This
is not a fund to meet millions of bonds,
or even hundreds of thousands. and 10
lean on 1t means that the value of secu-
rites will be all the less.
One banker OF the city, when dis
cussing the value of the Fire Claims
bonds, from the standpoint of invest
ment purely, said that without an en-
actment of the Legislature behind them,
10 insure interest and a sinking fund |
for their retirement, he would insist on |
a discount Of fifteen per cent before he
would take them. This is of course |
radical, but it indicates that the bust |
ness men of today are doing business,
and sentiment has no place in it.
The bonds of the Territory must be |
above suspicion. Whom United States |
bonds are 50 nigh. ,Sith railroad and
plantation issues at good rates. it would
be worse than criminal negligence to
send out issues of securities which are
not gilt-edged.
As indicating the insufficiency of the
reserve or sinking fund, as provided by
the sales of lands. Treasurer Kepoikai
There were outstanding on June go
1901 of the bonds of the Territory, is
sued under the Republic and being in
excess OF the issue taken up by the
United States, $685., e70.31. At that time
the special deposit in the Treasury,
from land sales to meet liquidation of
the loan. was s23,721.5s. During the
next fiscal year the fund grew only to
$50. 75s0S. Later it increased until the
-otal of the fund as shown in the re-
port Of Treasurer Kepoikai as of Dec.
!, 1902, was $43.OS6.3O. Thus in more
han "a year and a half, there was real
zed only $4,000. This was kept in the
resting" earning nothing,
,ut now the Treasurer will buy sSS 900
# the outstanding bonds, and thus stop /;
he interest on that amount. This in |
Iicates a yearly deposit to the credit ,
# sinking fund. for the year 19O1-19O2,
It least, of $13,OS6.49. AT this rate, if
here is no better fnanciering in the {
way of saving interest or of reinvest- ,
nent, the bonds. issued under the Re- {
,ublic of Hawaii, will have nearly sew ,
nty-hve years of life before they will ?
,e wiped out Add to this sum 100000 :
4 Fire Claims bonds and $5.O0O,0OO of I
Improvement bonds. and the amortiza- r
ion of the combined issues will be post
oned to later centuries. There is of
curse a provision for sinking fund I
n the loan bill. under which the $5,OOo, c
90 may issue. but there is serious con- 1
Iteration of the propriety of taking t
out, as the land sales provision is c
bought ample. f.