The Hawaiian gazette., 1916-12-12

:apital contributed and which he
brands "actual investment
Whether the property of the stock.
holders is in the insurance fund or is
transferred from thisNfund to capital, 4"
said Attorney Warren, cit is their
property. 1t belongs to them and they
are entitled to reinvest it in the bust
less and are entitled to earn a fair
ate of return on the investment and to
:hargc fair transportation rates to earn
ais retAirn.'', h D." q
Absolutely denying that the non
Utility enterprises of the company had
leen built up from the earnings of the
steamers, Auditor Graham submitted
"abulation showing the profits from
10Th the utility and the non.utility
business of the company from 1885 to
i0l5, excluding 1887, as follows: Steam.
ers, $775, 243.39; other business. $3,50l,-
I5O.3l; general, including interest, com
mission, exchange, etc, $5l4,947.29
,otal, $3,79l74O.99; from which cash
dividends paid from surplus amounted
$2,s77,l5
AS against the $775,@43.39 profit of
steamers, he showed a statement of
$S47, 079.69 paid out for purchase of
new steamers since the date of the last
increase Of capital stock for the pur.
chase of steamers.
"MOre has been taken from surplus
to build up the floating property of
the company" said Graham, THAN
has been carried TO surplus as profits
of steamers.
1t was upon the question Of the
cOmpany's handling Of its insurance
fund that the most discussion ccntercd
yesterday aud Auditor Graham found
himself the target for a cross-fre Of
questions from Commissioners Forbes
and Garden on the subject.
New Point Appears
point not hitherto shown by Audi
tor Field was contained in statement
of the insurance account by Auditor
Graham, namely that cash dividends
had been paid out of this fund as web
as stock dividends.
. His statement showing Il total of
1857, 2O6.2S accumulated as insurance
since 1885 accounts for the disposal of
the amount as follows: losses, $l67,.
9l3.S9; repairs to ships, $S4, 2O2.26; 5.
:. Mauna Kea, proportion of cost trans
ferred, $9,325.36; cash dividends and
payments on account of syndicate
stock, $206,500; stock dividends, $572,-
1906; balance, $557,O78.71.
On the propriety of paying both
stock and cash dividends from this
fund Commissioner Garden quizzed
Auditor Graham at length. Commits
siOner Garden held that the amount set
aside for insurance was too high and
that a lower rate of insurance, would
justify lower charges against. operating
expense of steamers and bence lower
freight rates.
Attorney Warren took the stand
that II fair insurance rate was charg-
ed against the steamers, ii was no con
Germ of the shipper whether this
amount was paid to an outside concern
or paid to the stockholders of the com,
pany. He said:
~ submit that the whole question of
disposal Of the insurance fund is out
side the' issue. Neither this commits
sion [nbr any court of law can force the
Inter Island company to charge less
than the regular rate of insurance
against their steamers.
of the Inter Island carries its own
insurance it has the right to earn a
profit on the premiums paid for taking
the risk just as an outside company
would have, and the stockholders of
the company are as much entitled to
dividends out of an insurance fund
built up on premium charges against
the steamer as the stockholders Of an
outside company would be entitled to
dividends on the premiums paid to it
by the Inter Island for insurance.
No date was set for future hearing
as the tables being prepared by Audi
tor Graham arc not yet completed.