The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1912-11-19

A G. M. ROBERTSON
Chief Justice of the Territory Su.
preme Court, who vigorously dissents
from majority opinion for Wailuku
plantation.
X x X i; X X X X X X \; X X X X =
| ton of $4,950,000 discount of fifteen
per cent should be allowed. That would
show total net valuation of 81 ,207 800.
As a matter of fact actual sales of
stock need not be shown. The statute
requires that when the stock of cor,
poration is quoted on the market the
market price thereof is to be taken
into consideration in assessing the com
pany's property. The stock of com
pany may seldom be dealt in but that
fact does not necessarily show that the
company is not prosperous one. Ere
quently it indicates the opposite. Evil
dence of bona fide sales is valuable as
showing what investors are ready to
pay and have paid for the stock.
The Principle to Follow.
''The net profits of corporation
show its earning power, and considera-
ton must always be given to the
amount of dividends, if any, which in
past years have been paid to the stock
holders. In the case of sugar com
pany the element of goodwill does not
figure and the amount of it's profits
have direct relation to the intrinsic
value of its property. But where a
plantation has been developed, rehabili
tated and put upon a new footing its
earning power as newly established is
the important consideration. For this
reason the profits of WailulSu planta.
ton prior to the year 1909 should not
be. taken into calculation. This phase
of the subject was dealt with in IL
Haw. 239 as follows: In some cases,
a plantation may have apparently just
taken fresh srart or entered upon a
new lease of life, as it were, through
the acquisition of additional lands or
water supply or change in it's variety
of cane or a more extensive use of fer
tilizers, or for some other reason. In
such case the net profits of the past
would not be of the same weight as
they would be in other cases.
"This plantation was valued on Jan
uary l, 1907, at $2,000,000 with an init
nation that it might well have been
regarded as being worth more than that
sum. In re Assessment of Wailuku
Sugar Co., IS Haw. 422. Since then
the company has doubled its output and
its capital stock, and trebled its profits,
and its stock has been sold upon the
market at more than sixty per cent
above par. In view of these circum-
stances it would be rather strange if
the property was not worth double
what it was at that date. The future
outlook was no darker on January /,
1912, than on January /, 1907. This
plantation IS yield in 1906 was 1928
tons and in 1907, 1926 tons, and its
yield per acre during those years was
less than six tons. Since then it has
"entered upon new lease of life. -
In 1910 the company doubled its capt.
tai stock, its plantation is in position
TO put out between 10000 and 1000
tons of sugar annually, and since 1908
its average yield per acre has exceeded
seven tons 1t owns large area of
land in fee, but small fraction of its
cane land being held under lease. 1t
is an irrigated plantation and has its
} own water supply. The plantation is
! well situated, in good physical condi-
ton, and has good prospects of main.
tanning its output, the estimated yield
for 1912 being $4,000 tons.
Basis of Assessment.
considered on the basis of CAPT
talization of profits, such a plantation,
according to the rule laid down in IL
Haw. 244, should be subjected to a
rate of IL or 1917 per cent. The court
there said: 1t seems to use that sugar
plantation under favorable conditions,
as, for example, one that owns its land
in fee, has for period of years paid,
say, IL or 121a per cent and has besides
been maintained in a state of efficiency
and has every prospect for doing as well
in the future as it has done in the past,
would generally be considered worth
par And in fixing the values of the
plantations which were then under con-
sideration special reference was made
to amount of dividends paid to the
stockholders during a number of years.
What the court there said as to plan.
tatiOn s prospect for doing as well in
the future as it has done in the past ,
is to be understood as applying to the
condition and situation of the planta
ton, and not, as counsel for the ap-
pellant would have it, as referring to
the effect of possible unfaVorable legis
lation. There were broad uncertainties
depending on national action existing
at the time those cases were decided
and they were adverted to in another
part of the opinion of the court. The
cordition of the cane sugar industry
in these Islands is no less stable now
than it was in 1897, when the eases re-
ferred to were decided 1t is generally
acknowledged that all business and in
dustry in this Territory was put upon
a sounder basis when these Islands were
annexed to the United States.
'tIn 1897, as now, there seemed to
be considerable uncertainty as to what
the future would bring forth. Uncer-
! tainty has prevailed ever since it was
conceived that protection is essential