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OPEN LETTER BY B. F. DILLINGHAM
REPORT OF MESSRS. 0. II. KLUEGEL AND G. F.
ALLARDT, ENGINEERS OF OAIIU RAILWAY
AND LAND COMPANY, TO THE SPECIAL"
COMMITTEE ON RAILWAYS AP
POINTED BY THE HAWAIIAN
LEGISLATURE OF 1890.
. Junk 9th, 1890.
Hon. II. A. Widkmann, ""
Chairman Special Committee on Railways,
Honolulu, II. I.
Sin: 1 desire to bring before your Honorable Committee
ti few facts and figures bearing upon the proposod-extonsion
of railways on this island, and also statements concerning
the Hilo and Ilaniakua railway project, which may throw
some light upon tho subject, and show, if possible, the
feasibility and soundness of tho undertaking, which it is
hoped will commend itself to the wisdom and good judg
ment of your Honorable Committee.
I beg, first, to call your 'attontion to the proposed exten
sion of tho railway line upon tho Island of Oahu. Supple
mentary to my own statement, I submit herewith a brief
report made by Messrs. Kluogol and Allardt, Engineers in
tho employ of tho Oahu Railway and Land Company.
With sufficient support and encouragomont from tho
Government, which the .Company respectfully ask tho
present House of Legislature to authorize, the Oahu Rail
way and Land Company propose to build or extend their
lino in a westerly direction from Hoaeub, the terminus
of tho present Contract, to Wnianno, a distance of twenty
If the line is so extended, it is proposed by Mr. E. B.
Thomas and others in this country to form a company for
tho purpose or quarrying limestone, with a -view to supply
ing our market with domestic lime.
With suitable machinery thero is little doubt that our
sandstone can bo placed on the market at a price to com
pete favorably with brick for building purposes. This will
create in the country a new and valuable industry, and add
considerably to tho business of the proposed Waianae divi
sion of the Oahu Railway and Land Company.
1 have made a careful investigation of the business now
existing andjn immediate prospect, which would como to
the Waianae Division, and submit the following as the
result of such investigation.
This line will be .much loss- expensive to build than were
tho first fifteen miles, and will be undertaken for an amount
not to exceed $15,000 per mile, payablo in Companies bonds
bearing interest at 5 per cent. The interest to bo guaran
teed by the Hawaiian Government:
HOAEAE TO AVAIANAE.
Twenty miles, including equipment, at. . .$15,000 $300,000
Estimated present income:
Freight to and from Waianae $ 12,000
Freight from Waiinanalo Stone Quarry and wood
lot - 3,(?00
Passenger trallic 5,000
Annual subsidy from Government at $500 per mile
for tho torm of five years 10,000
Annual interest on $300,000 at 5 per conl $ 15,000
Annual running expenses, including wear and
tear, repairs to track, etc., etc 10,000
Sinking .fund to meot bonds.
. I am satisfied beyond a question of doubt that tho-above
figures are safe; that the work can be accomplished, and
that the running expenses and interest on the Bonds, and a
Sinking Fund sufficient to pay tho Bonds, will bo realized
from the legitimate earnings of tho road from tho day it is
opened, without any expense to tho Government beyond
the subsidy asked; which is only $2,500 por mile, to bo paid
in yearly installments of $500 por milo during a torm of
five "(5) years,
I think the following figures will satisfy your Honorable
Committee that oqually favorable results may be confidently
looked for in tho extension of tho lino east from Honolulu
to Kahuku via Waiinanalo, a distanco of fifty-four (51)
HONOLULU TO KAHUKU.
Easterly route 5-1 miles at a cost not to exceed $18,000
per mile, in Bonds issued at 5 por cont. to cover first-class
construction of road with 40-lb. steel rails and good equip
ment. , Fifty-four (54) milos at $18,000 per mile $ 972,000
Estimated income at tho opening of tho road
Freight ull along the lino to and from Kahuku,
25,000 tons at an average of $2.25 por ton. .
Subsidy, $500 por milo
Interest on $972,000 at 5 por cont. per annum. .$ '18,(00
Running oxponses por annum, including wear
and tear, repairing track, etc., say 45,000
Possible contingencies 4,050
Sinking Fund to meet Bonds 15,000
HILO AND IIAMAKUA RAILROAD.
I have gathered statistics from tho thirteen sugar planta
tions stretched along tho sovonty miles of proposed railway
on the Island of Hawaii, and find tho freight available to
and from tho plantations now organized and running, ex
ceeding 75,000 tons por( annum, which at $2.25 por ton
average, dolivorcd at Hilo, and to tho plantations, would
amount to $ 108,750
Add passenger traffic por annum, say 12,250
Subsidy, say $500 per milo por annum for five
Gross receipts $ 210,000
Sovcnty miles of road, which will be an expensive line to
build as compared with tho line on Oahu.
Issuo of Bonds, interest to be guaranteed by
Govornmont, not to exceed $24,000 por inile.$ 1 ,080,000
Interest on $1,080,000, at 5 per cent, por aunum.$ 84,000
Running expenses . 90,000
Sinking Fund to anticipate Bonds as they fall
duo, say , 42,000
Repairs on road, including running expenses as above,
for the first few years will bo necessarily large.
It should be remembered that with railway facilities on
Hawaii a saving to the plantations on rates and quantity of
freight as above estimated would net $125,000 per annum.
It is believed by those who are in a position to know, that
the business along the line would bo greatly augmented by
the proposed railway.
1 have the promise of largo land owners on Hawaii of
100,000 acres of land in fee, which will bo consolidated with
the road, and pay for same taken in stock and bonds of the
Company. This land will become valuable after the road
is built, and when sold will go far towards paying off the
T propose the bonds issued on account of the construction
of each lino shall be payable in equal amounts in fen, fif
teen, twenty, twenty-five and thirty years.
In taking a broad and comprehensive view of the request
for Government aid in a guarantee of interest upon railroad
bonds, it will be observed from the statement made, that
while little or no risk would be incurred, the Government
would assist in creating good securities for tho investment
of accumulating funds which otherwise might be sent out
of tho country, trust funds and the savings of the working
classes, who are now obliged to deposit fheir hard earnings
at a lower rate of interest.
It would be superfluous to call the attention of your Hon
orable Committee to the thousands of acres of rich, fertile
lands now practically locked up and lying in an unproduc
tive state for want of suitable transportation facilities, and
it also seems equally unnecessary to speak of the urgent
necessity for the easiest, quickest, most direct and econom
ical method of transportation known, to save our agricul
tural interests from utter failure.
Recognizing as wo do our sole dependence upon the pro
ducts of our soil, together with the possibility staring us in
the face of a change in the tariff of our prosont market,
which if effected will be a financial loss to this country
equivalent to an abrogation of tho treaty; tho Government
should put forth its every and utmost endeavor to encour
age an enterprise capable of building up the waste places,
even under adverse circumstances.
Already we see the beneficial effect of the short lino of
railway just being completed, in tho starting of two now
plantations on this island, each at a capitalized value of
$500,000. Reul estate has changed hands along tho line,
raising the value of property from $5,000, as assessed for
taxation two years ago, to $40,000 ifs prosont assessable
If parties who claimed damages tor right of way amount
ing to an avorage of $1,000 per mile from Honolulu to
Hoaeae for a strip of land forty foot wide, pay taxes this
year on their proporty lying botweon Honolulu and Ewa at
tho rule charged for land taken, the oncouragemont of rail
road building on the part of tho Govornmont upon tho
terms asked in tho Oahu Railway and Land Company's Bill
now before your Honorable Connnitteo, would bo, I think, a
very profitable business for tho Government, without ref
erence to future developments.
While calling your attontion to tho large expense incurred
in the purchase of right of way, 1 am reminded of tho pos
sibility of being obliged to take tho westerly route to Ka
huku and Waiinanalo in case of difficulty in obtaining
right of way going oast of Honolulu, and thoroforo do not
wish to have the Company bound to take tho easterly route.
In closing, permit mo to refer to the United' Stales of
Amorica, which country, as you know, owes its wonderful
prosperity very largely to its network of railroads; and it
is safe to say that not one road in ono .hundred was over
started with half the business already created that we find
on oither of tho proposed lines I have had the honor of
bringing to tho "notice of your- Honorable Committee
Hoping the foregoing will load to legislation favorable to
tho enterprise, I bog to subscribe mysolf, Sir,
Your obedient servant,
B. F. DILLINGHAM.
To the President and Directors of the Oahu Hallway and Land
Gknti.kmkn: Tho bonoficial results which have already
followed the completion of tho Poarl River Division of tho
Oahu Railway, in tho way of developing tho resources of.
tho country, in stimulating private enterprise, and in en
hancing tho value of landed proporty along tho lino, would
seem to warrant tho extension of tho railway to more remote
localities, and perhaps ultimately, its extension around the
entire Island of Oahu.
With this end in view, tho undersigned, under your in
structions, made a caroful rcconnoisanco around tho island
for tho purposo of determining the most feasible routo, and
arriving at an approximate estimate of its cost.
We found tho most practical route to bo that along or
near tho coast, which routo, at tho same time, travorsos by
far tho greater portion of tho improved and unimproved
arablo lands on the island. Tho distanco was found to bo
132 miles, of which 15 miles uro now completed and now in
operation. The distanco might bo decreased about 18 miles
by running tho road across tho divide between Ewa and
Waiiilua; but this would cut off the important district of
Waianao with its extensive sugar plantations; also, tho
largo limestone quarries near Barber's Point. Moroovor,
there is, at present, but little prospect of any considerable
local traffic on this routo. Tho summit of tho divido is
about 900 feet above sea level, consequently the gradionts
will bo heavy, and Vould necessitate heavier engines and
greatly increase tho expense of operating tho road.
No serious obstacles will be encountered in tho construc
tion of tho road along the coast, except in passing a few
rocky poiiits that extend down to tho water's edge, whore
tho grading will bo comparatively expensive.
The northerly side of tho island is equally accessible, in
an engineering point of view, whether the road is started
oast or wost from Honolulu. By going cast, however, the
average length of haul for freight and passengers will bo
considerably shorter than by going west, but the difficulty
and cost of obtaining tho right of way on tho eastern routo
through tho city and through the district of Waikiki may
finally force the adoption of the western route, notwith
standing its greater length of haul.
All alongthc proposed lino of railway are extonsivo tract h
of good arablo lands, now lying idle, which are capable of
supporting a large population; the construction of the rail
way would undoubtedly hasten their subdivision into
sinallcfr tracts, and their occupation by a thrifty class of
small farmers. The important advantages of regularity,
reliability and speed secured by railway service would en
courage the raising of many perishable products which,
under the existing means of transfer, cannot be brought to
market with profit.
Taking this view of the situation and wo beliovo it is
sustained by tho history of railway construction the world
over there can be no question but that a railway around
the Island of Oahu is an indispensable factor in its future
development and prosperity. The direct benefit to tho gen
oral government will appear in a notable inereaso of the
public revenues resulting from the improvement of its now
unoccupied territory, not to mention tho important advan
tages of rapid communication with all parts of the island
in the administration of the several departments of the Gov
ernment. If these conclusions be correct, if. would seem to be emi
nently just and equitable, and in the lino of a sound public
policy, for the Government to extend a helping hand to
any private corporation willing to undorlukc a work of this
magnitude and importance. While it is confidently ex
pected that tho road will eventually yiold a fair revenue
upon its cost a rovenue largely created by tho road itself
it is questionable whether the income in the first four or
five years would bo sufficient to warrant its construction
without Govornmont aid.
As near as can be estimated from the data at hand, the
cost of the road, fully equipped for service, will range from
$12,000 to $20,000 por mile, according to the naturo of the
topography traversod by the lino. A rise in the market
price of steel rails, always u possible contingency, might add
very largely to tho above estimate of cost. Tho rails and
rolling stock will, of course, have to bo purchased abroad,
but the money for grading tho road-bed for cross-tics,
bridges, fences, depots, engine-houses, ware-houses, etc.,
would be disbursed hero, thus croating on these islands a
large and active market for labor and material while the
road is under construction. Indeed, the amount so dis
bursed will greatly excocd the sum now asked for in the
shape of a Government subsidy, which, as wo are informed
is only $2,500 por milo a sum that will not cover tho cost,
of grading and bridging alono
In tho United States tho policy of aiding tho construc
tion of railways over its otherwise inaccossiblo torritory, lias
proved of inestimable bonofit both to the public and the
general government. The subsidies granted wero exceed
ingly liboral; thus for example, thero was granted to the
Central Pacific Railway Company a subsidy, in guaranteed
bonds, amounting to.$10,000 per milo for tho valley division,
$32,000 per mile for the Nevada and Utah division, and
$48,000 por milo for tho mountain division of that road;
and, in addition thoroto, an absolute grant of 0,400 acres of
Govornmont land for overy milo of road built and put in
To inako a comparison, it may be fairly estimated that
the cost por mile of a railway around Oahu will bo about
equal to tho cost of tho Nevada and Utah division, oir
which, ab stated, a subsidy of $32,000 per mile, with land,
was grunted by tho United States Government.
0. II. Ki.ukoki., Chief Engineer.
(J. F. Ai.lakdt, Consulting Engineer.
Honolulu, II. I., Juno 12, 1890. " ' "