Honolulu star-bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1912-2010, 1916-05-06
City Gets Points for Which 4
Contends, Attorneys Readily
Agreeing in Most Cases I


Radical changes in the propose
amendments to the Rapid Transt
| Company's franchise were acceptd
| By the company's attorneys and off
cials at conference held last nigk
in the Capitol with the supervisors
committee on the franchise ameI1-
ments, the utilities commissioners aid
the attorneys for the two bodies. Is
told yesterday I'm the Star-Bulleth,
the city proposed three cnanges-ne
placing of the city's 21a per cent ax
ON gross income instead of transpoTa-
ton income, limitation of stock isae
and a more definite provision for eX-
tensions.
These three changes were agreedon
by the attorneys for all three parties
to the conference yesterday Afternoon
and were drawn up. and submitted at
the meeting last night After mach
discussion they were finally aecefed
by all cohcerned-that is after j A..
Magoon had left. e ~
Mr. Masoon arrived bright and ear
ly and with a series of protests kept
the floor almost without INTERRUPTION
for about an hour and half. then
he left and the others went ahead
Attorney NIagoon, who declares that
he is acting at the instigatfon If no
one but merely as a public-snrited
citizen, claims that the Rapid Ttansit
Companys charter does not giveit the
right to put its earnings into IMPROVE
ments and extensions and issus cap
ital stock against. these He aso de-
clares that the present charter Is suf-
fiefent to compel the company TO
make extensions and pay the people
what is the public's fair shares of the
company's earnings He contends
that there is no necessity br the
company to get new charter Ibw and
said this morning that he is wiling to
start injunction proceedings ID block
the charter plan if it seems advisable
to do so. ~:
There was a long discussion be.
tween Deputy City Attorney w. T..
Garden, representing the supervisors,
and the Transit company officials, on
whether or not the word "accumula-
tive" should be left in the Tovision
declaring that per cent dividends
may be paid to the stockholders. The
company contends that it was not
for their own interest that this was in
serted. but to provide more funds for
extensions. They pointed but that.
with the word "accumulativeP in the
charter it would be possible for the
company to spend its dividends for
several years on extensions and inn
provements and then when they had
begun to earn money pay the deferred
dividends. but that III 1t was not in
serted this dividend money could not
be used.
Garden said that it would tend to
prevent more money being invested in
the business, that dividends would be
used for extensions instead OF money
derived from cash stock sales. He
declared that If at some fiture date
the controlling stockholders should
hold control by narrow margin they
would fight the issuance Of any new
stock, no matter how badlylnew mon
ey was needed in the business, for
fear OF losing control, enc that the
word 'aceunhalative" gave them the
power, virtually, to restrict stock is.
sue.
Left to Commission.
After 20 minutes discussion both
sides agreed that the other side had
ground for its stand and left it to the
commission to decide whether the
word should be left in or crossed out.
Garden pointed tout at the public
hearing Tuesday night that If the
city's 21s per cent tax was to be lev
led on gross transportation earnings
only it would be possible for the Rapid
Transit company to organize subsi-
diary company, operate it and pay
these earnings into its own treasury
so that no tax for the city could be
collected on it. The other side agreed
with him and last night a provision
was submitted to the utilities commits
sion which puts the tax on gross earn
ings, with the exception of the reve-
nue. from sinking and replacement
funds and from the aquarium.
Stock Issuance Plan Agreed To. .
Another change agreed on last night
limits the stock issue to $780, 900, |
unless the utilities commission gives
Its approval to further issue. In |
that event it must be sold at par, for |
cash, and the revenue must be applied !
to capital expenditure.
The provision giving the public utili- |
les commission power to compel ex-
tensions when they ARE public me-
cessity and can be made to earn a
reasonable profit" was made more eX-