Honolulu star-bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1912-2010, 1915-10-25
TRANSIT
Fight Is BEGUN
ON BREAKFASTS
tcon,inued nom page one,

i CONTINUED nom page one,
chise cost us nothing" he continued
The fact is that IL cost a good many
thousands of dollars. II is part OF
our property IT has been held as
such by the local supreme, court and
by the supreme court OF the United
States. The territory has taxed il as
our property"
He added that this year the railway
was assessed at $1,000 600 Il.
Depreciation Rate absurd
1 Ii was argued blythe attorney-gen-
eFal that the company has adopted
an absurd rate OF depreeiatioR," and
that "a great part of the socalled in
vestments have been used to replace
wasted material" He also stated
that portions of the property of the
company are not used for public pur-
poses. The company has Invested o
portion Of its capital. he added. in a
manner which in mo- sense is. benefi.
cial to the public
/ "a section Of the territory's complaint
was amended today to read as follows:
i That yuur petitioner has been In
formed by an expert ountant, who
has examined the books of the said
IIHonoIula Rapid Transit ands Land
Company, and by expert engineers
who examined. the property OF the said
railway, as welltas the statements pre-
4 pared by said accountant from said
books. that the actual cost ofsthe prop.
|erty OF said railway as: well las the
i actualiyalne of said property does not
i exceed $4,000. and your petitioner
believes the information SO obtained
and therefore charges the fact that
neither the actual cost: nor the actual
value OF the property of said railway
exceeds 1856 900 2 SIS
i Territory,s Points.
The territory's fight. az outlined in
! its petition for an Injunction, Is to
restrain the company from increasing
Its capital stock. The territory al
leges that the present capital stock,
81 ,207 $780,, exceeds the amount which
/ the company by law is Authorized to
issue The territory also alleges that
the company plans to increase its capi-
! tad to $1,000, 900, which 1t seeks to pre-
went. The territory also seeks to pre-
vent the payment Of any dividends
upon any stock except that now out
standing.
The Rapid Transit Company main
ltains that IL has every legal right to
increase its capital stock 70 $l,6e0 600
and. while stating that it has. made
no move to do SOP ayers that it may
do so at any time unless restrained
/ by order Of courtsJf
This is the gist of the legal bat
| tie that began tS1ayi sjsThs ammuni.
| ton for the battle lies in the terms
lof the charter and in the facts con-
lcerning the companyis physical yalua-
| ton.
10 Charter Provision.
In the charter fits provided that the
Rapid Transit may not increase its
capital stock in any amount exceeding
the actual cost Of sthes property of the
railway plus rs per cent of such, cost.
This regulation was totprevent stock
watering.
/ The territory maintained on April
so, when the petition was filed, that
the actual cost of the railway was
only $795,407 ands charged that the
present capital stock Is more than the
company could legally issue and that
the proposed increase to- $500. 900
would be far in excess of what 1t
could legally issue1
These charges the company just as
strongly denies, declaring that il has
issued only stock Which could legally
be put out under its charter terms
Thus the question OF the cost of the
railway plant looms up as one OF
the vital issues Of the injunction suit
1t will be the endeavor Of; the terri
tory to show that the cornpany's state
llment of cost is too large; the endea-
Isvor OF Tue company to show that its
statement of cost Is correct under the
true interpretation Of the charter.
The territory has conducted expert
examinations both of the company's
hooks and the physieal property of the
company as we'll
H. Gooding Field. the accountant,
has been retained by the territory for
| the examination Of the books, while
tile physical valuation has bcts. made
irnder the direction OF Suuerias endent
of Public Works G. r. Forbes. II was
also reported this morning that sew
.eral well known civil engineers of
Honolulu had been retained as experts
for the government.
Territory's Plea. . Ill.,.
The gist of the petition for an IN
junction filed by the territory is in the
following paragraphs: go. s:s=.~*.,
III. 49, IL. -
THAT it is provided by said charter
of incorporation and by. said franchise.
that 1t shall not be lawful to increase
the capital stock of said corporation
at any time in excess Of $2oe. 00dst un-
less the proposed increase shall, when
taken with said original capital
stock, represent only the actual cost
OF the property of the railway, and not
over % per cent of such cost in atldi-
ton thereto. VI. q .>..
w.
'sThat the said Honolulu Rapid
Transit & Land Company has. from
time to time Increased its capital