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 viii 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

The hopes Of the management Of the
Hilo Railroad Company for a sufficient
assured tonnage to make certain the
meeting Of overhead interest and op-
Grating charges have been dashed by
word which has been given ost that
the so-called Brewer plantations" on
the Han1akua coast Of Hawaii have
entered into a new contract with tha
lnter-isIand Steam Navigation Com.
pany, Limited. ..""
This news was confirmed at the
lnter-lsland offices today when 1t
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 five years beginning Octo-
Der 1, 1915. The present contracts
expire in September, and it Is no Sc
cret that the continued operation OF
the Hilo Railroad Company on its
present basis depended largely on
securing at least share Of this busi-
ness.
The Inter-lsland management an.
Niihau and Kaiulani and possibly a
third ship, will be kept on the Hama
kua coast, taking on sugar at the
mills, and then transporting it to Hilo
where it will be loaded into the Mat
son or American Hawaiian freighters
for delivery on the mainland The
new. fnter-lsland contract is on prac-
really The same terms as The old
agreement.
This definite loss of prospective
tonnage by 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:
A certain 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 8 to $
per cent.
The floating indebtedness is to be
taken care Of by Glass A preferred
stock.
The new Glass A preferred stock
will be a cumulative dividend secu.
rity, with a dividend rate OF not less
than 6 per cent and possibly more.
The Hilo Railroad Company has tive
bond issues. one made in
1901 for 81 900, 900, and second Is.
sued in 1909. which though authorized
to the sum of $4,000, 900. has been is !
sued only to the extent of $500, 900.
Both bear 6 per cent interest. which |
brings the company's fixed interest
charges up to $4,000 each year.
BY reducing the bond issues and
the interest rates to point where
the revenue now in sight will take
care of interest charges, and giving |
preferred STOCK or a spe-
cial rating for the surrendered bonds,
Il is hoped to save the road until it 4
can be developed to a better paying
basis.
Various details remain to be adjust
ed-for instance the amount OF each
bond Issue which should be surrender.
ed, the interest rate and other mat.
ters. These questions are being
out by two committees rep.
the majority of the owners
Df each bond issue.
Holders of the 1901 securities are
by ]. R. Gait, A. F, Judd,
A. Lewis, Jr.. and j. Waterhouse. The
cwners of the issue of 1909 have E.
H. Wodehouse, Z. /. Spalding, r. w.
Single and A. w. T. Bottomley act.
ng for them.
1t is understood that the arrange
nent of the final details of the re-
scheme were held I'M
abeyance until the final determine.
ion of the freight contracts for the
big Hamakua plantations had been