The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1913-03-14
GOVERNOR EXPLAINS WHY HE
POCKET-VETOED RAPID TRANSIT
FRANCHISE EXTENSION BILL

nr with Individual persons and com
panies.
'Thc considerations Of chief prac
teal concern, at least in this case
nrc G) control by the public (2) ser
vice hv the company. and CD the issu.
rncc Of stocks and bonds and disposi
tion of the earnings.
a. Control nv the public TIL s
should lie assured in several ways.
Sin the first place, the public should
reserve the right TO repeal or amend
the franchise at any time. Congress
has inserted such provision in the
yes and electric light franchises which
have beeo- granted by our legislature;
and following the example thus set bv
congress. our Legislature inserted it at
the last session in the Hilo street rail
way franchise, and it is now contained
IN the bill introduced on behalf of the
hfnid Transit Co., but it mav not be
Going too far to consider the present
franchise as something alrendy granted
which should not be disturbed in this
respect and to make the provision as
20 repeal or amendment operate only
from the end of the present franchise,
rs If new franchise were being grant
ed to begin at that time. This pro-
vision is TO become operative in the
company's bin on January ]. 1880, and
IN the bill drafted by me at the ex-
riration of the present franchise, which
is n year or two earlier
I'm the second place the, company
should be made subject to any public
ntil ty commission that might be es-
tablished even during the continuance
of the present franchise, because the
public should have the right to insist
on proper service and the company
could not fairly object to that, and
especially could it not do so with good
grace when seeking long extension of
its franchise
( "In the third mace " he continues.
@ the public should have the right to
buy ont the company at any time, but
since this, like the provision as to
amendment or repeal, is in the nature
of power to term nate the franchise.
il also may fairly be made to become
lucrative only upon the termination of
the present franchise
"The company's Dill purports to pro-
vide for a purchase of its road bv the
public, but the provision in the bill is
omen to several serious objections. In
the first place, it postpones the date
when this provision may become opera
tive to time eleven years or so after
TIE expiration of the present franchise.
There is no reasonable ground for that.
II it becomes operative at the end of
the present franchise, it will still be
thirty years after the franchise began,
while in the case of the Hilo railway,
it is to begin twenty years after the
franchise begins, Notwithstanding the
a I'M Of h.,
risk as to the road proving profitable
in its earlier years. Whatever the COM
panv gets after the expiration of the
present franchise, it gets rs gift; and
n certainly cannot complain if so hand
some gift ASIAN extension of its fran
chise for twenty years or so is subject
to termination in the public interests
rnon full compensation being made. It
should not look so fine a oifthorse IN
tn mouth. Indeed, without the extern
sion the company would get nothing for
its property at the expiration of the
present franchise. Its rails and cars
would he to it so much scrap iron and
junk
The plan Of purchase rs prepared b.
the Transit Company, says the Gov
ernor, is not fair.
PUBIC is Protected.
"Again, he continues, eff the con-
tentiOns are sound which the company
will undoubtedly make, when the time
comes, it may construct its entire road
or any extensions of it entirely on the
bonds, then issue watered stock to the
amount of 1875 per cent of the cost
then pay off all the bonds out of earn,
ings, then pay off the 1875 per cent OF
watered stock out Of earnings. then
continue to pay at least per cent in
dividends on the l25 per cent of stock
the value of which the public instead
of the stockholders has paid to the
company, and then compel the public
If it wishes to buy the road, to pax
for it all over again. In other words
the public, in order to get the road
right have to pay for it at least threI
and quarter times to company thai
, has not put cent into it, but has beer
drawing good dividends from it. Tn,
, substitute bill provides clearly, not tina
the public NAV merely terminate thu
franchise, but that it may also acquir
/, the property; that il may do this, no
at the cost, but at not exceeding tn,
cost of the property, exclusive of thu
, franchise and good will, and less de
fiNNihiiohf iosNts anu inc puI
chaser to assume the debts; and tina
the price must be determined by arbi
tration subject to appeal to the 81
, preme court. Even this provision ma,
: not be sufficiently fair to the public
> for in so far as extensions are mad
/, out of earnings the public pays TO
y them and ought not to be obliged t
! pay for them over again. 1t woul
|, seem fairer TO pay the company onl
I what the stockholders have put in an
: reasonable bonus, or else to deduc
= from the value of the property wha
!, has gone into it out of earnings. 1t
u TO be hoped, however, that under tn
. substitute bin such good service wi
u he secured that the public will nc
!" want to purchase the property.
Similar TO Hilo Franchise.
q "The provisions inserted in the hi
prepared by me are similar 10 thos
which congress, AZ my suggestion, r.
:. Gently inserted In the Hilo street raj
/, why franchise bill he continues. -
1. thnt ease the company Is allowed 10 b
n sne capital stock only 20 the amour
{, paid for IL in each, and bonds M n'
i lees than Nn per cent of their PAR yhlu
y. except mo- that $4,000 of stock may !