The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1908-12-25
TEXT Of RAILROAD
AID AMENDMENT
Does Not Lend Public Credit,
but Authorizes II to
Be Done.

"The amendment to the Organic Act
in relation to government aid to rail
roads, which Governor Frear has draft
ed, - said Acting Governor Mott.
Smith yesterday, "does not lend the
credit of the government to any
railroad enterprise, as some people
seem to think. 1t merely gives the
Territory the power to do so if it
wants to and the Legislature author
ICES it. When the power was given to
the Philippine Government to lend its
aid to the construction of railroads for
the development of that country it was
looked on as an excellent thing, a pro-
gressive move. The amendment as
drafted by the Governor simply gives
to this Territory the power that was
gwen to the Philippine Government.
! The Territory does not need to exer-
else the power, unless it wants to. The
Legislature is the judge in that matter.
$50 that everybody may know just
what the amendment in this matter is,
l have here the text of it, with per-
haps some variations in the mere
phraseOlogy. This is as the added sec
tion viii read if the amendment is
adopted:
- That for the purpose of aiding in
the construction, equipment, operation,
and maintenance of such railroads,
using steam, electricity, or other
power, in the Hawaiian Islands, as the
Hawaiian Government may hereafter
specifically authorize, the said govern
ment is empowered to enter into con-
tract of guaranty with any railroad
company organized pursuant to the4
laws of said government or of the
United States or any State thereof
undertaking to construct, equip, oper
ate, and maintain any such railroad, |
whereby the said government shall |
guarantee interest, at not exceeding
four per centum per annum upon first |
lien bonds to be issued by such com
pany, properly secured by mortgage or
deed of trust upon the said railroad, |
its equipment, franchises, and other |
property, real, personal and mixed, |
then owned and thereafter to be ac-
quired.
50 Such contract of guaranty shall |
be signed on behalf of said govern |
ment by the Governor thereof, and on
behalf of the railroad company under
taking the construction, equipment,
maintenance and operation of said !
railroad by the chief officer thereof,
thereunto duly authorized by the stock
holders and directors of the same, and
shall contain, among others, the fol
lowing provisions:
{" 'First-That the total amount of
bonds the interest upon which is to be
guaranteed shall in no event exceed the
amount actually invested in cash in
the construction and equipment of
such railroad, to be determined as
provided.
'SecondTThat no debt except as
above provided shall be incurred by
the said undertaking railroad COM
pany, its successors or assigns, by
which lien shall be created upon such
railroad, its equipment or other prop
erty, prior to the lien of said govern
ment to secure the repayment of the
interest paid by it under said guar
anty without the consent of the Con-
gress.
80 'Third-That the said railroad
shall be constructed and equipped
within the time limited in the first
by the Hawaiian Government,
VI any extension OF SdlQ time granted
by said government for good cause
shown.
d" 'Fourth-That after the construc-
ton and equipment of said railroad in
accordance with the foregoing provisions
and all others of the contract of guar.
inty, the railroad shall apply its gross
earnings as follows:
First, to the necessary operating ..
including reasonable expenses
If the corporation; second, to the neces- J
ary and ordinary repairs of said rail-
Dad and it's equipment; third, to such }
and extraordinary repairs
# said railroad or equipment as may !
be first by the governor of the islands,
n writing, expressly consented to; d,
.ourth, to the payment of the interest :
N the bonds, the interest on which to y
my extent shall have been guaranteed :,
" the Hawaiian government under !,
his section.
50 THE contract of guaranty shall be in !.
ubstance Endorsed upon said bonds and :
igned by the treasurer of said govern
nent, and the said contract of guaranty
hall not be executed except upon sat \
sfactory proof of the completion of the .
abroad in sections of not less than i
wenty continuous miles each, and in :
ueh proportion. TO be fixed from time
o time by said government, as the