The Hawaiian gazette., 1915-05-04
Territory Asks An Injunction TO
Restrain Increase OF
e. Capital Stock
PRESIDENT PECK IS
PLEASED BY ACTION
Settlement Of All Disputes viii
Hasten Street Railway
Developments
(From Saturday Advertiser. }

=
expected suit Of the Territory against
the Honolulu Rapid Transit & Land
company, to test Obligations claimed to
be dne the government from the street
railway corporation, has been instituted
in the name Of the attorney general
who asks that an injunction be granted
TO, restrain the company from increas.
ing its capital stock, according to its
recent notice to the superintendent Of
public works. A temporary injunction
was granted by Judge Stuart yesterday,
President l., Tenney Peek of the
Rapid Transit Company expresses him.
self as delighted that the suit has at
last been brought; and declares that
the company viii do all it can to facili
tate reaching decision, welcoming the
opening of proceedings that. will clear
the atmosphere and settle the matters
OF difference between the, Territory and
the company. He believes that people
generally, are glad that the suit is be
gun, for the rights of the people and
the rights of the company will be deter
mined and the latter should the sooner
be able to 60 ahead with its develop
ment. ~
Two years ago the legislature passed
an act, subject to the approval of con
gress, granting the street railway a new
and an extended franchise to replac,
! the present franchise. which xpirer
within a few years.
Under the existing franchise it il
provided that all profits over eight pc
cent, after operating expenses and othe
legitimate charges have been deducted
shall be divided between the territorial
government and the corporation. Moth
! ing, however, has been paid over to tn
! Territory, alleges the complaint, which
goes on to declare that the true valu
of the property of the company !
$795, 407; that stock to the amour
Of 81 ,907, 800, par raluey is now out
standing, and that the Rapid Tran
sit Intends to increase its stock t.
1890, 600.
81, 900, 900 Limit Proposed
+ Attorney General stainbaek, in who's
name the Territory has started the sui
! for permanent injunction, asserts tina
tn" street car "onpany, TO avoid payinj
a proportion of its porfits to the gov
elnm,nt, has watered its stock 8
! as not TO exceed the dividend limit o
its franchise and now proposes to still
1 further water its stock - by issuin
to a total Of 81, 100000 in capital STOCK
Congress failed to act in the matte
of approving the Rapid Transit fran
, chi,e extension passed by the legislu
ture two years ago.. the two years dur
ing which such approval could hav
been given expiring Thursday. Tn
legislature Of 1913 provided in it's &c
that unless congress approved With
the two.year period, the matter woul
lapse Governor Phikham was oppose
! to the idea of congress approving tn
! act of the legislature extending tn
! franchise and refused to endorse tn
! bill
The Rapid Transit Company's repre-
sentatives some time ago notified tn
Governor that the company intende
to increase its capital stock, suggestin
that then was the time to take an
steps that he might see at in the eli
cunstanees, should he be opposed t
the proposition. The company repeated
! ly urged the Governor to institute pre-
ceedings at law, 50 that the whole bus
ness, with its various complication
might he threshed orr anS tbe cor'n "
would know just exactly where it stoo
and would be able to act accofmngI,,
| This suit, now filed, is the outcOm
Of the continued requests Of the Rapi
Transit Company to have the entir
matter settled once and for all by tn
courts The suit has been long expecte
and anxiously waited for by the stree
ear people, and has long been the sui
ject of consideration by the administri
: ton
The two yeats in which congres
might have approved the twenty on,
year extension, provided by The legisIi
ture Spf two years ago, having expired
the government has finally launched III
desired proceedings.
The bill for injunction sets forth tina
the Rapid Transit s charter Of ineo
Poration provides that IL, shall not b
| lawful to increase the capital stock d
any time in excess Of 5000, 900, unles
the proposed increase shall, when take
with the original capital stock, repr,
sent only the actual cost Of the propert
of the railway, and not over twenty ,6v
per cent of such cost in additio
| lntl'lOr lHdI bu0 COHlHdhy nus ITOI
time to time increased its capital stOc
so that it is now 81 ,2O7 800; that, a,
| cOrding to an expert accountant, tn
actual cost of the property of the raj
way is $795,4O7, and that the Rapi
Transit, unless restrained, will furtht
increase its capital stock 10 81 SOC, OOC
which will far exceed the cost of tn
railway and twenty Ave per cent 9
said cost in addition thereto. 1t
prayed that the company be enjOine
and restrained from increasing il
capital stock and from paying or n
tempting to pay any dividends upo
any capital stock, and that upon tn
final hearing the injunction be mad
perpetual
Representatives of the Rapid Trans
Company are required to appear
court not later than ten days after Sc
vice to answer the bill, .