li~~~ rr   is~~~~~~~;?~~.~~~~T ra n p o   t a t o 
MT~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
r~~~~~~~~~~~~~~~~~M
395~~~~~~~~~~~~~~~~~~~~3~~~~~~~~~~ ~i~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~N
N ~
zE                                                 'WE;~~I 
PB,~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~i  ~j~~~~~~~~~~~~~~~~~~~~~~~~~~~g






I
40




CHEAP TRANSPORTATION IS THE LIFE CF THE PEOPLE AND SHOULD BE CONTROLLED BY THE PEOPLE FOR THE PEOPLE UNDER JUST, INTELLIGENT AND
CLEARLY DEFINED LAWS AND REGULATIONS.
WITHOUT THE CHEAPEST POSSIBLE TRANSPORTATION THE SMALLER INDUSTPiES AND IMMIGRANT SETTLERS WILL BE SERIOUSLY HANDICAPPED IN THEIR
OBJECTS, IF NOT DEFEATED.
TRANT*SPOR"T.ATIONT
IN     I I F
Terri'torv Of H a waii
By L. E. PINKIIAM
from
Ihe leopleand         ust Promotion1
Thle    Presen-t Genellral RailIwayv            I sawXX  Which
IPermits Ovcer CaPitali1zaItion anld
ExAcessiVeIrmtin


II  I I 'l *1.




Transportation
Library
p-:




J / -t.1~if ' -  A 
EDUI(.',A\IO()N IS NEEI)ED.
ED1)UC (.\'(N I  -1 ()( PRATIAL O UI'I()NS IS
IMO()R1 NEIEIEDED.
OPPORTUIN I TI' ES '( )R A SELF-R ES ' 'ECTING LIV E111001)OOD ARE STILL IMO(RE NEED)ED.
T IE IWELFAE O() THIIE COMMON I EOPIE -MUST
IBE THIlE PARTI(IICLAT (: ARE OF TIlE TERRITORY
FO(R TIEY (CANOT 1NDIVJI).UALLY IIOTECT
TH EIR OWN INTERESTS.
IN CARING FO(R TIlE PEO)LE IT IS N(T NECESSARY TO INJURE TIIE LAU IDABLE INTERESTS OF
OR DESTIRO(Y CAPIITAL OR OUR OWN IMAI N INDUSrTY BUIT TRATHIER PROIMOTE THEM I,E LI NES
OF EQUITY AND J'USTI(CE.
TRANSPORITATION IS TIE 1MAIN' FACTOR IN SECU IRNG( TH'E,,RESUIJLTS O)F IND1USTRY AND ENTER
1P1ISE AND ITS PROMOTERS SHIOUILI) BE KEPT
\V WITHIN TIlHE 13BOI N )S OF) I ( CONSRVATIVE ENTERPR ISE A N) NOT BE GIVEN (OPO I)RT() ITUN i  I ES FOR
LEGAJL  EXPLOI TATION S   A N1D 1:BUR I) l. ES(:) MI
CHARI-GES O(N EITI HER LARG1 (1 SMAL IRO. DUCERS.
TRANS P)ORTATIO)N (fONDITION:(S AN\ I) lR1 )lBLEMS
TERRITO RY OF IAW\VAII.
thre t      kee              n ano seevere.
Th 'e  ceap  lest )est posqsile  transtportation  by  sea(  111(1 te
the very existenee of the presenit and jpossilule i1(lIlstri e- of flie
rl' w oli r f -IV ii, that tbey 1m1av live alld pro"sper ill eeiilpetitioi with  the  i-iiore favored  ai  les s (listia-lt]iv sitnlate(l  nlltries  a os  mi iark"(V   \whliell collipetitiml  il'oliliC5  to  oeeoomee
lore keen and severe.
The cheapest C1(l1 (Ill ilehat tral  spc)rItat vio   by  sa  cam  iieve(r
lbe oltailned  unltil steamners cal bot:,t   load  ail dliChllar'' e (ilarg' es
aloongside wla: rves at railway terminalts..




4


rl.he interest o1 legitimately issued I Railway Bonds and1( Cl(apit:ll Stock, paid for in cash, is a legitiliate cllarge on the people
nd,1 industries patronizing such railway.
Neithler Section 808 E. L. of HIawaii, (oir Clapl)ter 64 I. L.,;ffi(:rds Iprotection to the people from over issules of B'onds and
a(apital Stock, which careless legislation 'is isivafrialbly taken
advaiitage of to exploit the people and their ildustries.
'li'e( Islanllds of Hawaii and Kanai are particullarly siffering;tdl nare' being retar(ded in development froll tlh la ck of railway
a'ct:,   a llll.ltiolnts, ternlinals aii( hariors.
tle (dlitricts of IIamiakua and Ililo, Islandt of Ulawaii, a1nd
tih two ldistricts of Kanai, 1st., tle South, and 2ld(., the East
an1 Noorth, lack ra    ilway facilities.
Ihe 11( N I1 ii H:ailway, servirng the district of Northl K1ohala.
e'(edls a (iqiet Ib}i1hor and1(1 termil-i:ls, iwhich Illight be properly
lIcaIted (a t         Ha1\waailil,  HaI:aiiii, il (coli(ctioii with other lines
of railway.
railwayv is needled froin Kawailae tlc'ougal tlhe iT aiminea and
uIIper HIaimakaI llnaw iii, districts to a 'unctiol withl a below-,d(1seribedl bra: lc l Iine., and thlence to tlhe city of l H-ilo, l  I awai iI
Tlhere exists at the presenlt time mlore olr less conneecting liles
of iplaitation railxways realchingl, diiectlyl tle sugar lnills of the
I 1aa8knoa d(listriet, ad, from>  w]hichl tIi e heiavy freigihit traffic
iliust at lpresent origiailte, which ih lines are capable of being very
cl(healily tranIsfolrlOed( into a line o-f rail\ay servilng the lowcr
porl ions of said distrlict an1(l tlhen c( olliie(til(g witll the main
line ahlove-ienitioned form a line which wi( vld c(ontillnue to tlhe
(itv of Iilo, allid wli:ich wAo(l, s(ere thlie IIil, distriict.
Tl I (,Kn  dlistrict o(f 1Iawai i is at lt to le serve d I)y the
(xteiisioiI of tle e.xisting railway, a1d the11  Itaull (listlrict ltiust
de(1(1(11(1 on extellsiois of  lini e existillg, Or pIroet((t(d.
if 1lie  I sI llld  of  Ka lli I ii tit  IoIl  li e c(i)ili(oe t((  ii II l e i  dl(pqjO e I
linte of iailw:Iv fort thit deliictl (tl \ailL  hotli the )Idtilit(ti,)lsi
a1n1d pull:lie 'I IdM t eaI (s11t (1a11d Imorth of Kauaz11,i 11neally sim1lilr
t    do llit i (:,  xist X.
ic 1Iest served hv oic i   (r twot ra il wa  systei iis.
lh(,ie Iland of Maui is well served lv tie.Ka1 1ii l1ailwav,
which ol w   olds, the contol (if he sita itolnl and (  1)0 e xtelded as,-4 requiled.




I'lle Islanl of ()alll is well lprovided with railwavs and extell;iolns are beil)i  ade.as r apidly as equired.
II thle districts of Ilanlakllla and Ililo, Ilawaii, fronl \Waipio
(lilch to 1lilo, IIawaii, covering a railway mileage of appoxin1atehly sevenllty mlil('e, tlhere is an1 existilng freigt tonllagl e olltwar(d hound of lapp)roxinmately 110,00() tols of snuar and other
articlte, alnl ai1 inward tonlage of not less than 100,000 tonls,
1t tl(a 1popull ti(on tlhat should furnish not less than 400,000 single trip fares each year1, all of which annual traffic s1hould, at
low)er rates tlhan iow prevail in the Territory, lprodluce a gioss
rev(lei e of over $i(00,)()0. ()per year, and o)perating a.d1(1 1ailltellanlce( Shoul lnot excee(  $290(),000.00 per annmi leavinlg a
inet  arg'i of $ 11))).)00, against which interest an1(l divi(le1n charges shlould (lnot exceed $190,000.00 anlnually, leavino
a sIlrplius of $1 10,00.00.
\ great expansioi i of traffic ad earnings 1mst ocerl wl\\h1
tlhe la(1ds of IIilo, I11llaakula an  South Koluala dlistricts are
fully utilised.
1- tile soutil distlict of the  111and(1 of Kl(.ali, there is al,(,iille traffic of S,00)()0 toiis, and il thle nortlh (istrict (of 22,000)
1ins ( Lihne )Plalitation beingr exclinlded ) andl a )pol)lation tiatl
811old(1 yiel( -100,000 fares, the revenIIlle from whIichll tl affic cmn11ot he estimlate(d iitil ter(isal  (    ros ad  rors are determined,
h-lt which cal lhe c(ared1 for with fi naiilncial sIiccess Ily planltati
rl,',eenmelts as t tlie litilizatiojl ot existiig 1)plantatiotl railways.
AI1(cl11 power for electlric o  ration of railways canl lIe securell
fr-om  water hlea(ds on (G(vernmelt landll(s not ]lieilated(, and it is
possiblc to collll)ille tle two systel'ns of steall  1(1 electlricity,
5(:ecrin gl tlie -advanitagevs of each.
It is now\ ti   tie t c(onsidler whether it bee possible to se(rl,
tl,<se( illmperat tive\ly l  eel(l facilities of t ranlllslprtationl for tlie
Islandl(s of 1Ilawaii an1d l\aalii llunder so1me railway corlporatil-1s,
ill whlichl tli ( o)vermnclll   t shall have a voice, ad111 tile 1,Bon1 1s a
C'a (ital Stock of which shall (ot exceed tlhe actual cash c pal
in:1(l al reas(olnale percenltage for promotiol and (liseonlt, tlle
issue of botl to be legally limited, and interest and (livildellds I1,e soudlly and justly limited, that the people andl industrieiof these districts nmav not be exploited forever, and1 that, as
iarninogs incre(ase, traffic charges may be reduced thlat the pe(:' le
and(l theil idl(liustri(s 111 ay thliive, increase tand plr)spler.




f1-3


le stckl-jolblillg, i alfnllipilhnltil.g, waterinlg and inflatilig of
tlie Iill,s 1lll( c( lital stock of the railroadls of tl Ill: ilnllalnd has
1tl r, ll(I the li lresidclet of the Unitedl States  f \America anpu}lic opinion to this shlalmeless aind corruptilng exploiting off
il(i' pfeop),le, commnnercial corrupti:n and desTrucltioil of all finall(.i11  inlteolritY.
It is tlie (lnty ovf the Legislature of the T'erritory of tIawaii
to.se to it that neither the Legislative nor ExecI'(tive power\s,
10or tte people, are over-reachedl by those who wxollil fastel
folrever llillionls of dollars of bonus stock on tllie peoplle an1d
indistries of this country.
Tle Tlcerritory hias, in the past, given filinacial 8ai(d to 'ril\way
developlltmet, it 111:Va seek to ascelrtail if its fillallcilal aidl is nec(,.5s8ri'v to )rotect its peop)le and inldustries in their inlperative:eed(l of chea(ap transportation, al, should it so lpr'ove, seekt(  the
iecessr 11I a11 tllhoritv to reiider such aid.
W\Aiejl oice railroads are establishled in thlese districts, an1d
iss(ues o,f c'.p)ital stiock nre emitted, tle peop(le anl their indlustries canl never secure relief thlrough' clomlpetitive lines of tranls-.porta'tioi, ullt will 1be sublject to i traffic rates (est dlescri(bedl b1
tlue word's "a11l the traffic Awill iear'.
The,xec(lltive shllold cease any al ienatiion of p!lillic watter'le(ads, l(pending tile letermi niatmii of the best mletliodls of pIo)vidi01ig lseeded 1ltasp o rtaI1tion facilities withini tie Territorv.
The Le-'islatilre slhoid carefully co(il oser the tlteI(rests aid
welfarel of tle pople of tle Territorv of IIa\wii and gluird
thlill ill ever( v possilde ailnd re.asoiaitale wary friom tlhe resullts if
-l(i\o ( ogl0itZelli otill prplll oll'lilfit-l I)\(l shig!  (pulil I)r i-l
teif ltl   I l'  lf i t'; i  o,l  I i1 i l   ll Jl '  ( i t  f (l 11  iltl'l  i   i'   l il( 'l/ 8 l i i i  irl
a/n1dtt  tirii,,iil,1 t'l `F(  eita 'Ft 1a')' be il ted.N OV~s   IVi l(0 
K A 1 \ I  t'i11 'A( I/i//   cw   (1 o 'o-i  /i/'1 /1 1.^' |()fol wis:
It  iI i),  il      I t,,   1a e  v   1's,  t I tIima.tes  1,o I tIhe, l  "ndI41  o f
K Ia I.IIi l as   te ill ls II IIv(,,I  1, t, e1( det(er i e po  bu I II II I   oI I  tIe
noth10ea(st ('oa0st of Hlawaii ir coi c,Mwhlusions can le:1, lived at 
an1, d  te  princile oI (Ic Ii  rI It aid 1,  il lw sti teI,.
I bIIer tlie Il (i e'w Il/ JI.,'i /,e,  Ir' tIie co'st of a rail\ wxav
in thle listlrii'L of llilio an]d hliinalua ila w hhaxvii, eillsistitI of




7


158 miles of coast line, 4 miles of connecting line and 50 miles
of main line, or a total of 72 miles, would be:
In 1st.Mortgage Bonds.....................  $3,000,00. 00
InI ('apital Stock, 9010/ of whlich would Ibe a bonus 3,000,000. 00
* Total.........................,000,00. 00
To reach liawaihae would cost:
In 1st Mlortgage Bonds.... $1,000,000.00
In Capital Stock, 90 () bol-nus 1,0((0,(0. 00  2,000,00().00
Total cost o/ railroad, 1.1H io to ka(t 'ir e..... 8, 0(()(. 00.
The corporation colld increase tlhis capital stock as tley:
might choose.
Under the A imendled( General t t(1r tle same lilns of irailroad
would cost:
In lst Mlortgage Bonds....................$2,000,000.00()
In Prefered Capital Stock................ 1,00,00(0.00
Inl ('ommon:ll Capital Stock for lpromotionl fillaneering, &c..........................   750,00 O). 00
'otal........................... $3, 750),000.00
To reach Kawvaiwhae would cost:
In 1st Mortgage Bonds.....$ C(50,000.)00
In Preferred Capital Stock.  350,000.00
In (,,0ommon (a pital Stok.... ) 250,000.() 0  1,25 ),()000.)00
J'otl./ost of i)'tril'odt(l. /il/ f,,o Jr 'i'l(......$()5,  ()0).00
UInder the I rme)nde(d G(eleneran R1il7/ty Jat La,. appliedl;s albove,
thore l)patronizigl this line of railway will he freed forever of
the 1possil)ilitv of paying traffic rates to supply dlividends on.
$3.000,000.00 of watered stock.
The whole proposition btecomes a fair, square delal, in which
the Territory, the people anr(d promote'rs are protecte.d and prospered.
Another feature of the A mended General l1t!ilwtya Law is
that the people and lnot the c(orpforation get tlhe 1 enefit of the




8


Sin:kinlg f::lt, whlicl is, of co,,rl., or'iginally taken- olit of the
pockets of the people and not from the stockholders, so that when
the $2,650,000.00 of bonds are paid off by the operations of the
sinking fulnd no stock can be issued in their place and the people
need furnish traffic charges for dividends on $2,350,000.00
only, instead of on $8,000,000.00 or more.,
This melans, eventually, lower rates for transportation, so our
products can be brought very cheanlv to tide water andcthence
on a long voyage to market, able to stand a fair show in the
wvorld's competition.
In the Philippine Islands, Government aid is being extended
very extenlsively in bllilding railroads for development.
If the Territory of Hawaii shows its confidence by granting
the trifling aid proposed by this Act, I believe the plantations
affected by this Act will quickly absorb $500,000.00 of preferred
capital stock, an1d that investors will greedily take up the other.$500,000.00, and that as rapidly as needed the $2,00000,000.0
of bonds canl be sold, and the  iilo-Hamakua end of the HiloKawaihae raiilroald line can be quickly put under construction.
'The followilg bllsiness is in sight at present:
110,000 tolln of oult-frciight, 100,000 tons of infreigllt.  d thle 1)robablle 400,000 fares, which,
at lovwer irats than exist il the Territory, woluld
bring in a revenue of.......................$605,34t2.)00
The expelse of uannagelnent, operating' and mnainteialce would be
over estimlated at........... $290,000.00
fTaxes woild not hce less than.......  20,000.00  310,000.00
Leavinii, a balance, for 'in1'reos'. diidce't ds, &c. of $295,342.00
tInter(l;t  at 3t /,  onl bonds annually
froml earnlings..............$ 6C0,000.00
Rettlrn ing to the Territory the interelst advanced anniluallyl(.......  60,000.00  120 000.00.tBaatrae for. pr)efoerred stocl,:, etfc.. Of............. $1 75,342.00
Thllere is no good rca:son for exempting this particular railro'd(l flromll tlaxation.




9


The ielitrvjrsks~ htlileIII its interest advanees of..................                    $ -) GO,0 ()0.O
Taxes, not otherwise receiv7ab Ie, 7would amouint to  2 0,YO( 0O. O00'
The amount at -risk is but..........$ 40,000.0
an1d that wVould b~e retlleiu  on-af ahsi  ots in all probThe incerease of propertyI values for taxation and deovelopm-ent
Ot thle country wouldl a(Idl to the resources of the treasury of
LiawNan and not dleplete it.
It is not the amount of mioney inv\,olv-ed, but confidence shown
byv the                         I   '7people through the acts of it  w  Legislature representa tIVe s Ithat will Caid tins imperativ-ely niecessary transportation
enterprise.
The m-aim land has suiflered from  excessive p)romnotion and.ianipulated and inflated wateredl stocks, and Tfawai i should
learn by those mnistakes, of careless legislation and granting of
franchises to now avoid them.
The hard times of this Territory are larg'elv (Inc to reckless
tin aInceerino'f and] it is the clntv of the GIoverinment to restra in
tha,-t spirit and endeavor to bring about an era of conse:~r N-vativ
tinmance'r1ing and general prosperit mixamong~ the mi(ldle classes,
rahrthan listen to schemes, that enrichi only the holders of
f r a nchlises.
Low an(l decreasing traffic charges are the only p)o55ihlc nicans
ef development of this Territory, mud rende'r tranispo~rtation
available in all parts of the b'isnds for the benefit of the small
(Imier as well as, our sugar industry.
Th'lere is every reason this Act should pss  Shiould it be
b1cemined advisable, a lpullie bearing should be, hiad.
T ime island of Kauiai and her development of small industries.-ul( p~rotection of her great industry would be equalrll-y benefited.
The g'reat clapitalists would. not. miss from their resources the
tmrs~'t requiirements of $2'70,000.00, nor the fina -iIay nmt of
$2 70.000.O0 and the bonds would find a sale. I needl not fuirthem illustrate details as to Kauam.
If the, lromoters and orgammizers of these railroads are frank
and open in their dealings with the public, they will. not object
to the public seciiring such information as may enab~le their
Riepresentatives, of the Legislature knowing the 'full cause and




10


effect of such legislation as they have enacted or may elact on
th subject of transportation.
If the promoters and organizers of these railroads desire tlhe
welfare of the common people and their little industries for all
time, they will restrain their desire for iimnlense riches anld l(
content with the l-ample rewar,(ds tlese acts afford the )opportunitr
of secnring.
Should the Legislature prefer a few to secure great riches
amnd perinit them to issue lawful obligations representing not enterp)rise or labor but a keen instinct to secure enormous advanltages over the peolple and thereby bind the shackles ol tlleir
inlllstry forever, it is not in the power of any single manl or
leg isla tor to prevent.
IIwaii will for years repeat the cry of California producers.
5IMell of enormlous capital are becoming ashamed of their own!
greed alnd its effect on the general character of the people anl
AN   A   I A      M t,NI) SECTIONS 783 AND        S(s ()OF
(C1 APiTERTI  64 OF TEIE REVISED       LAWS O)1
HAWAII REIELATING TO THE GENERAL RAILWAY LAW.
I iltrod ' 1,ed(1 Mlar(ch 27, 19()07, 1  Sena tor Geo. (. Ilewitt.
I ':ss(ed first rea(ldillg i i tihe Senalte, March 27. 1907.
Sectio, l1. Section 74 of the lievised( Laws of  I awaii i 
hevreby a:lidel( to re'(ad as follows:
"Se('ctio '7$S.  )Power 1ldl authority is giveil to the Slluprinlte,(lenlit of Ptilic W,,rs. 1 Works,  itl with tie con(senlt of tlth
(Governor, to ('lIter' into ( a it('twh any Issol lc)iatioll of peSl'l '
wo m1vy associate<'it( tl slves to'tler undler the general ( r-,,i,,tiu, law 1 of tl is TerI it iv, aI(d 1)v the aenerall la   ii relat ioIl t-o c(i:' oi' tiols (ii(l sil.j(()  t t-o ta ll the pr oisioIls thlereof tan
tie 1)rovisiolls helr('ilnafter (cotil oill-(] for tile purpliose (of bu,)ild i,)
Il(l operI.ating  railo(1 o, ilo,(lroad  in aiAy )parEt of thlis Territory -
'Provilded, (Ihowever, it shall 1b lawful for anyl sai(l assli;tion o-r (cl)olratio)l to issue-( preferre(l capital stock, inl such
sums as u1a1v be nlecessary, at 1a ice in the legal] monies of the
fnite(l State:<s of Anleri(ca equall to not less than ninetv )e( ('(elt.
of tlhe face valuejl of such iss:ues: and




11


"litIiler )pro(vidled1, hlowever, as a eo-mipensal ti  to t, tle lrooliter's, or0gallizers, lbildl(lers a11(1 finlanl(:.iers of aiiv sn11eh rail, rad
o  railroalds, it slhall be lawfull folr aln sai(l associatiool or corploratioll to iSs1ue ( m ()11111(II (llitill stoc(k to.all at111ollt e('(ilal to:on(e4-foIurti  of ()Iiill* issles (f ple  Ifered c apital stok 11ad
b)01(ds com11)illed  ald(-1
1"Fr, Ilier provided,  wever, lwhen by' tile operations of a
sinikilng, full(l aliv bonds, imortga fge b1od(1s or rec(l (d evidencess of
ldelt of a caplital 1ature shalll lave been lil lpaid d  a('nl11elledl(, it
s11ill be ullawxful for anyl said assoCiatioll or corporation to issue1
cal)ital stock of aily description to rep'lace saidl abolve menltioned
obligatiolis cancelled;
"Further provilded, however, it shall be unlawful for ay sail
associa:tioln or colrporatioll to paY dlividell(ds in ex(ess of seven
per cent. per annum on preferred capital stock and six pe'r (cet.
)per anm11111   on 011 COm 1 capital stock, all dividellnds to 1(be nncumuilative; and11
"F''urtlher' provided, however, it shal:l bhe ]awfJul to ('l11arge for
two years lduring constructio,   all taxes to cost of co,:strlclltiol
of said railroad or railroads."
Sectiol 2.   Sec(ti ol 80S (of the Revised Laws' o)f  1 a waii iI
herleby) anlende(l to rea1d as follows:
Section 8()S.   Any corporation wliiell may 1e orl'glliiz'e
aild  ndeltrtalie the ilbil(dilg of anyi rnilroadl oi railrlads, il
pl)1rs1ali:ce of the anutlhority of tills chlapter, alld ill accord (()I
wxitil it, 10iav issue Sholds to raise Inl,01ey for tilh( (colstrllctil1 of
s('lIh 'ilroald or railroadls, iln 8s11e su111s aS  iav he conve Ili(lt
llit it shall 1)e lllllawfill to issue said bl onds at a price, il thel
lei-al oillllies of tile United State:s Iof Aineiica. less tlnfi llilletv
pe c (nlit. of tile flace valule o(f any 111 so) issue1 111(ld s1 ill 1)1d
s101,all bel(' iiterest at at late mot to exeeCd six per cent. pelr 1l"PI',ovided, 1however, nt the exlilrationl of 1nin(e yeas fi' f, ll tl('
"Fititiho of sOl(idl ed. issoeer 0 issuel', t lee s1l (,r 1( ndsta lish,
a sik1n1 lr f1111 al(  111 ea rlv tl ere slles11l t sie s uet a Sile  sm(111
(of 1m11e11v  which al t Ia rate of ilnterest e(pal to fouir per cent. per
a01111111  a(     ouilll ailloililt at tile end (f f-orty-one yea!'s to a s8n11
epllal to tlhe face value (f thle bonds (f tIle issue aLalist \whilch
st idl si-nkini  fund is assigre(d; a1nd
"Further provided, hlowever, 11(o eap)ital stock or bonds sh111l
be issuled (or exchaIl(rge(ld for tlhe prllOlase or con11(odi idation  f anyll



12


raill'ad or r1 ilroad(s withollt tle anl)1rov<lI of te (Governor, the
'TreIlsulrer aldi the Aiu(litolr of tlhe Territor (of IIawa:ii 1and then
oll0y after the terms of the proposed consolidation shall have
been advertised for three weeks in nlot less than three dlailv,
anll( three weekly newspapers, and a pllublie hearilng Ihad.''
Section 3. This Act shall take effect on the day of its approval.
A\N A\(T _TO ENCO()OUIAGE THE B13LI)1 N         OE PUIll,IC[(  RAIII()OADS ON THIE ISLANDS OF HAWA11 ANI) KAUATI, TERR..ITO(lR
O)F HtAWNAII.
Introd, cel(l March 2', f1907(), 1by S(enlator Geo. (. IHewitt.
Passd1 first 1cadilg iin tlhe Senate Mlarch 27, -1 '907.
S(ct inl l I. \V l                    oeieve  tlhere shall be organized l  inder the.ii1tlhor'itv of (llapter (4, R'evised Laws osf 11awaii, as as,::eededl
1xiv tile Leg,'islatll re, Session of A. 1. I 11)7. 7an association or
crlpooralion to build a line of railroad:or railroads through the
dist:i:tls of Il ilo, IlIaiak'a ad ll(1 South Ioliala, Island of Hlawaii, and to exven'tiually extenid from the town of Ililo to l(awaihae I Iarbor, Island of Hawaii, and there shall have been sll)scribed 01el:ililolio (doll ars of prefe.rred capital stock of said
corploratioi. on whicl not less than four hundred a(nd fifty
thonilsa:ld dollars in: lawfull monties of tlhe Ilited States of America sihall lhave been p)aidi c;to the treasury of said eorporatio: 
anil( on whliclh iot less than fourl hutilndred and fifty tlousaInd
lollars l  slall e1 d(e an(I( ld payable withill twelve mollths thlleafter a'lld tllhere sliall have beenn altliorized ani issie of two iillionl dollals of first mortgage lbondls on tle lproperty of said
colr)poratiioni, there shall be paid, subject to the approval of tiis
Act bv the CongrMes of the IlUnited States of Anerica, oi tlh
first diav of January and the first day of July of each year for,a term of twenty vyears. froml lawful moni:,es then in tie treasllr
of the Territory of tInawaii iitto the tre (asulry of said corporationl
a suiil on: eaclh of said daltes e(ual to olne and one-half per celt.
on tle total amollut of said first lortglage bondsl that have lbee
sold andl isse1d 1)b saidl clorporatito  to and on the dates above
mientioIed: and




13


Provitded, however, salid mnollies paid from the trcaslir of the
Territory of HIawaii shall be applied solely to the pl(ay\nllt of
interest cide oi0 the first days of IJanuary an(d JulIy oni the first
mort.gage lbolids ab(ove described alid on dates above mclllti)oedl
and
Furtller provided, however, tlhat, from the earnirnm s of said
'railroadl (orlporation net above the expenlse of malllagemell t,
opicratioll an-d maintenance anld a sum- eqllallillg three lper C(elt.
pcir alumllll Oll said first nmortgage bonds outstaldliig, there slall
kbe rep)dl; into thle trelasury of tlie Territory of lawa 1ii any siusi
of Ionley alvan  ed froml the treasury of the Territory of 111awa:ii idl(ler the conditions above named.
Se tion 2.   Whenever there shall be org'allized n11der tlhe
athrit     f ( hapter i;4 Ievised Laws off Ilawaii  as amended
b)y tlte Legislature session of A. 1). 1907, an association or corpo(ration to build a lilne or lilcs of railroadl or railroadls tlrol:uglh
tlie several districts of the Islani(l of Kanai as may be dleter
m111ined 1upo)n ad1( as 'all provi(le proper transportation: facilities for tlhat Island, and there shall have been subscribe(l six
1lnlldl(1re  thousal(l d(lollar s of 1)referred caplitall stock iof said col)poration on which nlot less than two hundred and sevetity thlousanll (1ollars inl lawful monies of the United States of \America
shall have been paid iilto tile treasury of said corI)oratio  a,1l
11 \wli(cll iiot less tliiia two hnlmdred ald seveiitv tliolsaii(d (lollars' slall 11 be due and1 payable within twelve months thereafter,
a11(1 tllhere sliall lihave been authorized an issiue of one m lillion;ive Il1dired,(l tlollsand (dollars of first llortg'tag  bonds oil the
lroplerty - of said crpOl)l 1tiol, there shall  e p]ai(1, subj(ect to the
approval of this Act by the (:onlgress of the United States of
Aenricia, on the first (lay of Janunary and the first day of July
cf eachl cyear for a term of twenity years fromn lawflll nmoIies
tliell il thle treasury of the Territory of Iawaii into the treaslry of said corporation a sumiii on each of said dates equlal to
onlle adll onle-lhalf per ceilt. o1 the total amrlount of slidl first Inmortgage l:,bonds that hai(v  een so(ld and isslued 1ty Saidl corlorlatimo to
I1(1d c  the dates above menitioned (l:  1
-Prvi(led, hiowever, said il Jllic.s,jaid from the trea.lsury of the
'Territlr o-f lIHawaii shil be l applied solely to the paymenlt of
ilterest (ldue on the first (lays orf January an(l July ol the first
imnortal,,tle bondsl, alb'ove l ext dlescribed a-nd on the dates above
n-lition-ed  and




14


Flirtlier provided, however, that from the earrinlgs of said
railroad corporation net above the expense of management, operatioi and maintenance and a sum equalling three per cent. per
allnnum on said first mortgage bonds outstanding there shall be
repaid inlto the Treasury of the Territory of lawaii any sums
of inliiey advanced by the treasury of thL  Territory of lawaii
under the conditions above named.
Section 3. This Act shall take effect whenl approved by the
Governor of the Territory of Hawaii, and on the day of its
lawful approval by the Congress of the IUnited States of Amnerica.
Copy
H ONOLU UL, T. I      1., Marct 2Stli, 1 0'()7.
Il,);i\: 1 Si:-I lmlail you a copy of the Bulletill with:i;
article (lo "1ransportation".
hevoii(d cost of operation and interest and dividends oil conservative capitalization, all transportation becolnes a tax on
tlhe people, and is as direct as taxes by the GovernluIcet.
1 1(e only competitor possible in these Islands is the sea,
excessively exlpensive at best.
()Only by limiting capitalization by law or voluntarily can
the )eople, sec'ure the advantages due it over cost by sea.
If tllev clloose to fail to safeguard tlhmcselves, it sliould not
be tllrl ogli lack of a tlhoroughl analy sis of the local situation.
Tlie article il (uiestion is for their thorough information.
1t is not, lhowever, expected to be effective from the fact the
legislative sessionI is so advanced, aid(l orgaliizatiol alonse is
effectual iii producinlg results.
''lte plrinloter is wortly of lhis reward in a just degree, but
it sho1ldl1  be the righlt of the relpre;seltatives of tile Ieople to
fix the limlits.
\ (1irect tax 1by tlhe Goverlmelllll econoliically applied in aid
of thei railway facilities should lie welcolie(d by the prornoters
as strl-lengtheningi their fillnacial position, and could be: well
nralte-( lI t l(e (Glvern'lenlt tlat thlt t  lowest 1)ossible traffic rates
might lprevail for the best interests of the Territory.
Taxes f'ou tlthi pip"se do i)ot 1ear the 1iatr lnte of an ord(liliarv
tax on the peoplle, for as )irol)ose(l they would be directly and
plrollltly reibllll:irsed to thle Territorial treasury.
Very respectfully,
T. E. PE. iN IIA.




0




.




3   V 1)() I1 I () 2 ( Q) I (2 ) 9   075




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