Honolulu star-bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1912-2010, 1915-05-28
HILO RAILWAY
GETS NO SUGAR
FROM big Mills
0nOmea, Pepeekeo and Homo
mu Win Give Tonnage to
Ships For Next Five Years
WORKING OUT DETAILS
FOR REORGANIZATION
Committees Representing Two
Sets Of Railroad Bond Hold
ers Have Feasible Plan

i
The hopes Of the management Of the
HiIo Railroad Company for sufficient
assured tonnage 70 make certain the
meeting Of overhead interest and op-
Grating charges have been dashed by
word which has been given out that
the so-cailed brewer plantations" on
the Hamakua coast Of Hawaii have
entered into . new contract with tha
inter-island Steam Navigation Com.
pany, Limited.
This news was confirmed at the
Inter-island offices today when IT
was announced that the steamship
company has this week signed up
contracts with the Onomea, Pepeekeo
and Honomu sugar companies for the
exclusive handling or their sugar for
a period Of i've years beginning Octo-
Der 4, 1915. The present contracts
expire IN September. and it is no Sc
cret that the continued operation e.
the Hilo Railroad Company on tts
present basis depended largely On
securing at least share Of this bpsi-
ness.
The 1nfer-Island management an
nounces that in future the steamers
Aiihau and Kaiulani ana possibly a
third ship. will be kept on the Hama
kua coast, taking on sugar at the
mills. and then Transporting Il to Hilo
where 1t win be loaded into the Matel
son or american Hawaiian freighfers
for delivery on the mainland. The
new Infer-Island contract Is on prac-
fira1lt !. .fhn = ne terms an the ola
agreement
This definite loss Of prospective
tonnage hy the Hilo railroad has
caused renewed activity on the part
Of the creditors and Of the commit.
tees representing the bondholders OF
the company. who are now working
out the details Of scheme OF reor.
ganization which may be broadly
forecast as follows:
Afcertain percentage Of each issue
Of bonds will be retired, and "class
A preferred stock will be given In
lieu Of same.
The Interest on the remaining
bonds may be reduced from s to
per cent.
The fiosting indebtedness is to be
taken care OF BY Class A preferred
stock.
The new class A preferred stock
will Be 4 cumulative dividend secu.
rity, with dividend rate OF not less
than per cent and possibly more.
The Hilo Railroad Company has two
outstanding bond issues. one made in
1901 for s1,00O.000, and second is !
sued IN 1909, which though authorized
to the sum OF s4,5O0. 900. has been is
sued only to the extent of $S,500,000 /
Both bear 6 per cent interest. which
brings the company's fixed interest
charges up to s270.0O0 each year.
BY reducing the bond issues and
the interest rates to a point where
the revenue now in sight will take
care OF interest charges, and giving
preferred STOCK or q spe- +
cial rating for the surrendered bonds,
Il is hoped to save the road until II
can be developed to a better paving
basis.
Various details remain to be adjust
ed-for instance the amount of each Z
bond issue which should be surrender
ed. the interest rate and other mat
ters. These questions are being
threshed out by two committees rep.
resenting the majority of the owners
Of each bond issue.
Holders of the 1901 securities are
BY ]. r. Gait, A. F. Judd.
A. Lewis, Jr., and J. Waterhouse. The
owners of the issue of 1903 have E.
H. Wodehouse. f. !. Spalding, r. w.
Single and A. w. T. Bottomley act
Ing for them.
1t Is understood that the arrange
nent Of the final details of the re-
scheme were held in
abeyance until the final determine
ION OF the freight contracts for the
big Hamakua plantations had been
made.