Honolulu star-bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1912-2010, 1916-01-07
RAPID TRANSIT
RIGHT TO ISSUE
STOCK ISUPHELD
Continued from page one)

notice that they would file the flna
decree some5time next week. II vii
be from this decree that the territer.
will appeal the case, providing an ap
peal is taken. -. 1884,.
Il Beginning his decision proper Judg,
Stuart says: IT,. ."..... ILL.,. .
THE defendant claims that by al
express provision OF its franchise, i
is entitled TO issue stock for the full
amount of the legitimate cost of III
plant and % per cent in addition
thereto, and find that the charter 81
reads. To illustrate, if this plant ha(
actually cost $2,500,000, by the char
ter defendant may properly issue
stock TO that amount and Is per cen
in addition, or 1925, 900. although tbs
property may not be worth more a
the present time than $2,000,000. Thi:
is undoubtedly the reading of the de
PENDANTS franchise or charter. Plain
tiff claims that stock should issue only
to the value of the plant as il now
stands, after deducting from It's cost
value all depreciation that may have
arisen from any cause. ~. .: ~.
Assessed Value Quoted. ...- -. +. ..
Judge Stuart goes on to say that
the testimony Of the tax assessor. and
the books introduced in evidence.
4 showed that the assessed value OF the
company's plant, which. In this terri
| tory, is placed at the actual cash
value of the property" was. at the
/ time the case was commenced, 81
1870. ,=.. .~...- Fl -. ..=.~.
| IF we add IS per cent to this. - the
decision reads, lit gives us an author
! lied issue of stock of $2674.637."
| Commenting on the testimony of
| William Barringer, a witness for the
territory who spent three months as.
| certaining the value Of the Rapid
Transit plant, the decision says he
found that the plant cost the company
| 81, $50, 5000. ..:.. -. ."."". i. .":
"But BarrinSer," the decision con.
| tinues, did not include everything
which was later included in the stip-
ulation, showing cash outlay and
cost to the defendant of $2,17L976. IL.
! Add % per cent to this and we have
an authorized stock issue of $2,714.-
! 970.13." ~..-. ....... Il. +
The decision points out that J. NJ.
Young, another engineer fixed the
cost and original value of the Rapid
Transit plant at 1881, 401.74. But to
this" 1t continues, is to be added the
tramways purchase and the Pearl Har-
Dor traction extension, which again
brings up the hrst cost to Spill
976.11, and by adding the 25 per cent
we again have an authorized stock
basis of $2,714,97013 Young finds a
depreciation Of s9S3.571 IL This
taken from $2,714970.13, leaves an au.
thorized capital stock of $1,731, 1890.
Agreement Is included.
At this juncture there Is inserted in
the decision the written agreement
filed by the opposing attorneys, con-
tanning disputed and undisputed items
regarding the cost and actual value OF
the Rapid Transit plant The disput.
ed items amounted to S56S,91943 and
the undisputed items to $1,603.056.6S
Judge Stuart adds, by way of com
ment, that the investment by the Rap
i'd Transit in both the old Hawaiian
Tramways and the Pearl Harbor Trac
ton Company was fully authorized
by the defendants charter.
The Hawaiian TramwayS Company.
Judge Stuart finds, had the prior right
to and was occupying the principal
streets of the city. These compel
ing companies were continually at
war" he continues, Gin the legislature,
the courts and elsewhere Everyone
saw the necessity OF the settlement OF
these disputes not only for the benefit
Of the companies. but for the public
benefit, and from the nature OF the
Rapid Transit charter, the purchase
of the Hawaiian Tramways Company's
rights and property by it seemed to be
the only proper way of solving the
difficulty" -. ....--. -.
The correspondence which Governor
Pinkham had with certain interested
parties prior to the purchase of the
tramway by the Rapid Transit, which
correspondence has been published in
the Star-Bulletin, is commented> upon
at some length in the decision
Pinkham's Advice Good.
MIR l.. f. Pinkham, a public
spirited citizen" Judge Stuart says,
who was at that time also holding
one of the territorial offices, under
date of April 4, 1899, wrote the au-
thorities of the Rapid Transit Com
pany advising them to pay $400000
for the property and rights of the.
Tramways Company, and enclosed a
letter from learned friend of his
engaged in street railway business, adj.
yising that the Rapid Transit Com.
pany should pay $4,000 for the prop
erty. think that Mr.. Pinkham gave
good advice and ! believe that when
the Rapid Transit Company finally
bought the Tramways Company for
S255,54e.e4, that il made the best bust
ness investment II has made during its
life, l have no hesitancy in holding
that the stock, bonds and cash given
in purchase of that property should
be considered as part of the legiti
mate cost of its enterprise" ".
Grant and Limitation.
1t was argued during the trial.
Judge Stuart continues, that the char.
ter providing for the 25 per cent in.
crease is not grant but limitation
Il think it is botn, the court adds.
that the plant itself should pass TO the
city at the end of the franchise right
than as regards any other provision
+. L. - ~.