The Hawaiian gazette., 1906-07-17
OCEANIC
DEFAULT
The San Francisco Recorder of July

Is says:
The once-powerful Oceanic Steam
ship Company has gone another step
downward into the mire and has de-
faulted on its bonds.
This news, which was confirmed at
tho banking rooms OF the Union Trust
Company, where the interest on the
company's bond issue has heretofore
been regularly paid, flew like wild fire
through the financial district today and
caused startling sensation.
The outstanding bonds on which the
Oceanic Steamship Company has de-
faulted amount to s2A05,0O and bear
interest at the rate of 8 per cent. per
annum, payable semi-snnually In jan
uary and July at the rate OF $3.50 per
coupon.
Notwithstanding the depression in
the company's affairs and the low price
to which the capital stock has fallen
(the latter was offered at $3.50 per share
\on June 30, with all the assessments
paid, the interest on the bonds has
been regularly paid and when the ex-
change was last in session they were
quoted at SOL Years ago the bonds
commanded s1l0.
Under the law, the Oceanic Steam
ship Company has six months in which
to pay the interest from the time of
default. At the expiration of that time
the bondholders can bring foreclosure
! proceedings. The Spreckels family are
believed TO be the largest holders Of
the bonds.
This may mean the wind up OF the
Oceanic Steamship Company.
A representative of The Recorder
called on F. S. Samuels, assistant to
the president Of the Oceanic Steam
ship Company, who confirmed the re-
port that the company had defaulted
on its bonds, attributing 1t to the
scarcity of funds in the company's
treasury.
The Recorder further says on July 6:
The fact that the Oceanic Steamship
Company has defaulted on it's 81, 405, 900
of per cent. bonds, news of which
was published exclusively in The Re-
corder yesterday afternoon, is the main
topic of discussion in local financial
circles. The other papers of this city
are so much engrossed with the re-
opening of the saloons that they have
failed as yet to give the least atten-
ton to this important matter, affecting
as 1t does the existence of great
American steamship line, but they will
probably devote columns to the subject
within the next day or two.
AS stated in The Recorder yesterday
afternoon, the interest on the 81, 405, 600
Oceanic Steamship Company per
cent. bonds is due semi-annudlly and
payable in January and July. The to-
} tai amount of each payment is about
$50 900. This interest has regularly
been paid to the bondholders at the
banking rooms of the United Trust
Company, but no money was deposited
! there for payment of the interest due
this month and according to the inter
terview with f. $. Samuels. assistant
to President John ID. Spreckels of the
Oceanic Steamship Company, publish
ed in The Recorder yesterday after
noon, no money to pay the July in
terest will be forthcoming for the
reason that there are no funds for this
purpose in the company's treasury.
This constitutes the default. The COM
pany has six months from the time
of default in which to pay the inter-
est failing which. the bondholders at
foreclosure proceedings to acquire the
property of the company in satisfaction
for their claims.
Besides the outstanding bonded in
debtedness of $2,405,O00, the Oceanic
Steamship Company has cash in
debtedness of rising $1,5O0.0O0, which is
due John D. Spreckels e. Bros. Com
pany for money advanced. The
| Spreckels are said to be also the larg-
est owners of the bonds, so that the
| total amount due them r. believed to
be close upon si00O,O00. AS against
| this vast Indebtedness are principally
| the Ave steamships of the Oceanic line, |
which IL put up for sale would not
in all probability bring anywhere near
| that amount. There are rumors of an
| intended sale of the steamships to the |
Japanese
The financial condition of the conf |
pany seems To be hopeless. The relief |
promised by the passage OF a ship sub
sidy bill by Congress has vanished for
a year at least, for that matter has
been put over until the next Congress !
assemblies. The company is rapidly |
losing money in the operation OF its
line. The stock, last quoted at $3.50
per share asked, is now absolutely |
valueless, for the entire property must
go To the bondholders ana j. d. Spreck |
| els q Bros Company, who have ad-
vanced sl,5OO,OOO In cash to secure their
claims.
There has seldom been "A more COM
pete wreck @: a once prosperous busl- |
ness ENTERPRISE.
-st's-