The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1912-06-28
CLIMATE HELPS
BY MILLIONS
Only Asset to Cover $2,700yO00
Claim at Paauhau, Says
Richard IverS.
(Mail speeial to The Advertiser. }


HILO, June 24.-High finance Of the
most modern brand figured in the fota-
tion of Paauhau Sugar Company, when
the control was secured some years ago
by Ed Pollitz of San Francisco, ac-
cording to the testimony that came
out here before the tax appeal court
last Friday. Richard Ivers, secretary
of G. Brewer & Co., was the star wit
ness and the tale he unfolded made
Hilo sit up and take notice.
Mr.. Ivers' principal statement re-
garding the recapitalizations of Paau-
hau was to the effect that the climate
must have been included among the
main assets; at least, there was moth
ing besides the climate that he knew
of to cover one item of So 200 900 down
in the list of assets. In spite of in
| creased capitalization, declared Mr..
Ivers, Paauhau is not worth as much
today as it was some years ago. before
it became an irrigated plantation. Irri-
CATION had actually decreased the crop
bearing value.
Regarding the figure of $5,O0O,OO0,
|
facts, as stated by Mr.. Ivers, are that
Mr.. Pollitz bought out the sugar com.
pany, which was then capitalized at
| 81 100000. Mr.. Pollitz then went back
to San Francisco and foated a new
Paauhau Sugar Company, which he CAPT
talized at $5,000,000. The assets of the
company had to be shown to be worth
$5,000,000. Therefore, according to Mr..
Ivers, the value of every possible asset
of the company was inflated as much
as possible.
Even when this was done to the full
est possible extent, there still remained
a sum of $2,700,000 to be accounted for.
This amount was shown on the cor
poration return, as f'Plantation Ac.
counts" and it was over those figures
that the debate in the appeal court
ragged.
Pressed as to the reason that the
sum of $2,700,O00 was so shown in the
returns Mr.. Ivers stated that possibly
climate could be worth the large
amount mentioned.
The word "climate" thereafter be.
came a joke in the court room, and
any amount of money that was men
toned by either side in the case, was
always queried as to whether or not
it could be charged to "climate.
Irrigation Drag.
AS matter of fact, explained Mr..
Ivers, Paauhau plantation is nothing
like as valuable now, as it was few
years ago. The mauka fields are
"played out,' and the irrigation
scheme that was to make the planta-
tion such valuable one, has resulted
in an enormous expense that is drag
ging the estate down to bed rock
''I think, +" said Mr.. Ivers from the
witness stand, "that Paauhau was
worth from 100000 to 100000 more,
as an unirrigated plantation, than it
is at the present moment, as an irri-
gated one.
"The Paauhau company contracted
with the Hamakua Ditch Company, to
take 20,O00,00O gallons of water every
day. The annual cost was to be $780,
600 per annum.
"The ditch was contructed and the
water taken to the plantation supply
bitches. Ever since then there has
been great loss through the water
being allowed to run away into the sea-
There was no use for the water on the
plantation, owing to splendid rain
fall.
Transplanted Weeds.
"Paauhau was better as an unirri-
gated plantation and, although there
used to be bad season sometimes,
under the old rule, the average crops,
year after year, were good enough for
anything. Now, with irrigation, the
cost of cultivation has increased a
1Of Tho hnainn 10 bauyiar nyuinr IN
the seeds of grasses and weeds being
the ditches The cost of applying
the consequence is that the cost of
raising ton of sugar has jumped SIS
per ton"
J :. Annual Profits.
Paauhau plantation, during the past
six years, has annually made the
: profits shown below. 1t will be
noticed that in 1908, the profits were
very high This was explained by
Mr.. Ivers, who said that in 1908 there
J was wonderful crop. The cane was
heavier, and the sugar contents were
, very high. The consequence was that
I not only was larger tonnage of cane
, taken off, but it took less tons of cane
5 to make a ton of sugar. The profits
+ were: 1906, $l39,632; 1907, $166, ,034;
$ 1908, $370,792; 1909, $245,7S4; 1910
e $127,l95, and 1911, $117,70s.
Il Mr.. Ivers also explained that the
g cost of labor has gone up, and that thu
@ bonus system installed some time ago
a adds to the cost of making sugar.
a --s*-s--
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