Honolulu star-bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1912-2010, 1913-03-13

tit OF the increased or improved SefN-
ice. but il may be better TO require the
company to pay definite percentage
of the gross receipts to the public aft
er paying dividends of s per cent TO
the stockholders, before dividing the
balance. if any, with the public.
Public Must Not Pay Twice..
The substitute bill cuts out the
sinking fund on the stock also. The
public should not be required TO pay
the stockholders twice for the property
or to pay them for their stock and
then allow them to continue TO draw
the dividends on il. If sinking fund
is allowed for the stock, either the
stock should be reduced as fast as 1t
lis paid off, in which case the share of
the public in the earnings would in
crease correspondingly in other
words, the public would practically
get the dividends on the stock which
it pays for, or else the property
should revert to the public at the ex-
piration of the franchise without fur
Their payment inasmuch as the public
would have already paid for 1t.
THE company, of course. takes the
position that it has a good thing now
and that it will be to the advantage Of
the public to extend the franchise be-
cause that will enable the company to
spread its sinking fund for bonds and
stock over a longer period and there
fore enable 1t to expend more now in
making extensions.
1893 Franchise Good.
THAT is quite true. An unusually
good franchise was granted in 1898.
The city was then small. there was
little capital seeking investment in
this way, the public was willing to
go long way to get a better service
than was given by the old tramway
company, and the subject was not so
well known or had not been brought
so prominently to public attention at
that time as now; and yet the COM
pany, even under the bill as | have
drafted 1t, will stand to gain much
more than 1t will lose. Indeed, one
,, would suppose that it would jump at
the chance of getting so good thing.
While it will be to the advantage Of
the public to have more extensions
made now by spreading the sinking
fund over long period, 1t will like
wise he to the advantage of the COM
pany because it will enable it to pay.
more in dividends now If ii Is not
Obliged to pay so much in sinking
fund, and the period Of the extension
will be its fat period when the road
has been developed and the city has
grown.
Moreover, the company probably
has not such good thing now as it
thinks In the first place, there Is
much reason to believe that It can
issue watered stock only to the ex-
tent of 25 per cent and not to the ex-
| tent of 125 per cent Of the cost and
that it cannot SET aside sinking
! fund for any stock which has not been
paid for in full. The time will soon
come when the. government will be in
a position to test these questions. The
company, therefore, cannot afford to
! insist upon doubtful contention Of
this kind at the risk of losing the
magnificent boon of a twenty -one-year
/ extension. Furthermore, the public
| has under the present law some pref
! ty good levers to exert on the COM
/ pany in case the latter should not
do the square thing by the public.
i For instance, the superintendent of
public works and the governor may
make rules and regulations for the
company; the company may be re-
CURED to increase its schedule; the
I franchise is not exclusive; and the
! rights and privileges of the company,
j except as otherwise provided, are ex-
pressly granted upon such terms,
conditions and restrictions as now
/ are or may hereafter be imposed by
the laws of the Territory of Hawaii
/ in relation to the matter of construct
ing and maintaining street railways
! in the district of Honolulu, Island of
Oahu, and strict compliance with
such laws is hereby required" There
| are also other respects in which the
! company may be required to give in
lcreased service to such an extent that
| it could not do more than pay OF its
bonds and stock and a small dividend
4 during the remainder of it's present
franchise if the public were disposed
to exercise it's powers. The COM
pany should in its own interests take
| the position that it desires to serve
/ the public first and that 1t is willing
i 10 GO SO IOF IdlFs feluIU. IL SduuOI
afford nearly so well as the public to
! postpone readjustment of the rela-
/ lions between the two. These rela-
tons should be such that it will be
!. to the advantage of both parties to
continue them indefinitely. The city
will always need street railway sys-
! TEN and the company should not take
/ the view that it should eat and drink
on the theory that it will die tomor-
row. No hand to mouth policy should
/ be adopted. An automatic arrange
ment should lie made that will be safe
and fair to 10Th parties.
For Adequate Service.
80. In the matter of securing ade-
quate service provision is inserted
similar to that which congress insert
/ ed at my suggestion in the Hilo fran
chise to the effect that the company
may be required by proper board
or a public utility commission to
make extensions as the needs of the
! city require, provided the entire sys-
tenn, including the extensions. will en-
able the lOInUany to paw dividends, of