The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1903-03-06

SENATORS. who~e Interest IN the future
81 the Territory IL ~ acute and sirenu-
out a. that % any other inhnhitant.
have laid with fnttcfinE JUNCTION to their
souls the fact that the law setting
aside the realization from land sales,
arcomplishes all that IL needed for the
creation of n proper sinking fund Tor
the prospective issues OF bonds Of the
Territory
The law is not n new one. and II Is
fair to say that It's working has not
been such az 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-
tons for the sale OF lands Ii 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 to
lean on II 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,
to insure interest and 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 1t.
The bonds of the Territory must be
above suspicion. When United States
bonds are so high, with railroad and
plantation issues at good rates, 1t 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
gives these figures from his records:
There were outstanding on June 80,
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. 7O.31. At that time
the special deposit in the Treasury,
from land sales to meet liquidation OF
the loan. was s23,721.59. During the
next ItCdl year tHt luHu SitN phis w
s36. 75S.0S. Later II increased until the
total of the fund as shown in the re-
port of Treasurer Kepoikai as of Dec.
6. 1902, was $43,0S6S0. Thus in more
than year and half, there was real
lied only $4,000. This was kept in the
Treasury resting" earning nothing,
but now the Treasurer will buy $4,000
of the outstanding bonds, and thus stop
the interest on that amount. This in
dicates a yearly deposit to the credit
of sinking fund, for the year 19Ol-19O2'
at least, of $13,036.49 AT this rate, If
there is no better financiering in the
way of saving interest or of reinvest-
ment. the bonds, issued under the Re
public of Hawaii, will have nearly sew
enty-five years of life before they will
be wiped out. Add to this sum $400,O 600
of Fire Claims bonds and $5,000,000 OF
Improvement bonds, and the amortiZa-
ton of the combined issues will be post
poned to later centuries. There is OF
course a provision for a sinking fund
in the loan bill, under which the $1,000,
900 may issue, but there is serious con-
sideration of the propriety of taking
it out, as the land sales provision Is
thought ample.