Honolulu star-bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1912-2010, 1913-03-18


abuse of power?
Two years ago in the lengthy con-
ference he has alluded to. over the
bill passed by the legislature. since
pocket-vetoed by him, and now rein.
trcduced without any change. he gave
me distinctly TO understand that he
had no complaint TO make as TO our
issues of stock in the past, that he
was sensible Of the honorable way in
which We had met our financial prob
lens, and that his concern IN regard
to an extension of our franchise rights
was TO avoid possibilities Of unfair
stock manipulation in the future, if
perchanee another class of men came
into control | will saY now. as |
have always said. when discussing
these financial questions, that 1t is the
disposition OF the income of public
utility companies which most vitality
: affects the public. and thar the Ques,
ton of stock and bond issues, de-
tached from the question of the fair
hess of the rates for service. and the
apportionment of revenue is Of much
less moment. 1t might, however, be
we'll TO set forth at the present time
more in detail the financial history
Of our company to allay possible err
roneous impressions created by his
statement, and to inform the legisla-
ture and the public.
History of the Company.
The company was Incorporated Aug
ust 80, 1898, to take over the fran
chise granted by the Republic of Ha-
vail. July Z, 1898. ratified by congress,
and approved by the President OF the
United States. June %, 1900. Thirty
years from the date of his approval
would bring the date of It's expiration
to June %, 1880, approximately sew
enteen years hence The capital stock
was fixed at $500, 100000, with the
right to extend the same from time to
time by the issue of new shares not
to exceed in all the sum or $1,000. 600.
Section 81 of the franchise reads as
follows:
1t shall not be lawful to in
crease the capital stock of said
corporation, at any time in excess
of said two hundred thousand dol.
| lars. unless the proposed increase
shall, when taken with the origi-
nal capital stock. represent only
the actual cost Of the property Of
the railway. and not over twenty
five per cent of such cost In addi-
tion thereto; and such cost may
| include all expense of laying
tracks and equipping the road for
public use, and may also include
all subsequent extensions, but no
such increase shall be authorized
for extensions until they shall be
determined upon and authorised
| by vote of the corporation.
Section is gives the company the
right to borrow money at agreed rates
! of interest and to secure the same
/ by mortgage of all or any portion OF
| its property. including the franchise:
Section IA gives the company the
right to purchase all or any. part Of
| the property, real and personal,
rights. privileges and franchises OF
any other railway or Of any other
! light and power company having OBJ.
jects In whole or in part similar TO
those by the act authorized, and when
| SC acquired, the right to exercise all
rights, powers, privileges and fran
chises thereof, whether derived by
charter or act of the legislature.
Section Is sgfyes the further right,
| amongst others, to take shares in the
stock of any other company having
similar objects.
/ Lawful Charges.
Section IL reads as follows:
The following charges shall be law
! full upon the income of said railway:
1st The expense of operating, re-
pairs, renewals, extensions, interest,
and every .other cost and charge prop
! erly or necessarily connected with
| the maintenance of said railway.
End. Dividends may be paid to the
stockholders not to exceed s per cent
] on the par value of the stock issued.
3rd. A sinking fund may be created
! for the redemption of any bond which
may be issued or other record debt
ana the capital upon the expiration OF
the franchise. Provided, however
j that the amount placed to the credit
ot such sinking fund annually, shall
not exceed in amount snch sum with
| interest computed at 5 per cent per
annum, compounded. as will, principal
end interest combined, at maturity,
equal the par value of the bonds, rec.
ord and capital debt aforesaid.
4ih. The excess of income shall be
divided equally between the govern
ment of the Republic of Hawaii and
the stockholders of said corporation.
5th. A quarterly account Tor trial bal
ance of the corporation shall be. rem
dered by the corporation to the minis
ter of the interior from the beginning
of the actual construction of the rail
way.
The foregoing covers the financial
provisions of the contract made be
tW cen the legislature Of Hawaii and
the company, ratified and confirmed
/ by the congress- Of the United States.
This contract can not be altered or
| abridged except by the consent of the
! company. i. s....... r.. 81.
Stock and Bond Issue
The company began to operate its
cars in the fall of 1901. Its property
and outstanding capital stock and