49 
mg  railroads  within  the  Territory.  Any  railroad  constructed 
within  the  Territory  must  depend  to  a very  large  extent  for  its 
income  upon  the  sugar  plantations.  There  is  no  justification  for 
the  construction  of  railroads  at  the  present  time  except  as  they 
reach  .out  for  the  sugar  plantations’  trade  and  this  will  be  true 
until  the  economic  conditions  of  the  country  change.  Those 
primarily  benefited  by  the  construction  will  be  the  owners  of  the 
system  (if  it  is  profitable),  the  sugar  plantations  along  the  line, 
and  the  owners  of  real  estate  other  than  plantations.  I am  not 
in  a position  to  state  what  area  of  government  land  a railroad, 
say  through  the  Hilo,  Hamakua  and  Kohala  districts,  in  the  Island 
of  Hawaii,  would  benefit,  but  I think  I am  safe  in  saying  that 
much  over  50%  would  be  private  holdings.  Again  much  of  the 
construction  would  be  along  the  sea-coast  in  order  to  reach  the 
plantation  mill,  the  only  trade  that  would  make  it  possible.  In 
other  words  such  a road  would  cater  to  highly  developed  land 
the  most  of  which  is  owned  and  controlled  in  large  holdings  by 
private  individuals.  The  homesteaders  would  derive  advantage, 
but  not  to  such  an  extent  as  would  justify  the  guarantee  of  bonds 
by  the  government.  The  building  of  railroads  in  this  Territory 
would  no  doubt  have  progressed  very  much  more  rapidly  were  it 
not  for  the  conditions  existing.  This  is  a small  community  and 
a large  part  of  the  value  of  the  property  of  the  Territory  is  con- 
trolled by  a comparatively  small  number  of  individuals.  There 
is  but  one  company  operating  any  regular  line  of  steamers  be- 
tween the  islands  and  water  transportation  is  controlled  largely 
by  the  same  people  who  control  the  plantations,  and  interests  are 
so  interwoven  that  it  is  difficult  to-  obtain  capital  or  contracts  for 
railroads  which  would  interfere  with  the  other  method  of  trans- 
portation. I believe  that  a railroad  through  the  country  above- 
mentioned  will  be  constructed  notwithstanding  the  fact  that  it  has 
been  checked  in  the  past,  and  that  the  same  will  be  of  great  ad- 
vantage, but  I believe  that  it  is  one  that  should  not  be  encouraged 
to  the  extent  of  the  government’s  guaranteeing  bonds  issued  for 
construction.  The  present  development  of  the  country  itself 
justifies  the  establishing  of  a road.  As  stated  above  water  trans- 
portation between  the  islands  is  in  the  hands  of  one  concern  and 
I believe  that  rates  are  in  some  instances  excessive,  transporta- 
tion charges  being  greater  in  many  cases  upon  inter-island  ship- 
ments than  they  are  from  the  mainland  to  Honolulu.  I also  think 
that  great  discrimination  is  made  between  small  shippers  and  the 
large  shippers.  This  in  itself  works  against  any  successful  home- 
steading policy  in  the  Territory.  Probably  the  Federal  law  now 
in  effect  will  meet  this  situation. 
In  my  opinion  there  should  be  a large  appropriation  made,  say 
of  $100,000,  for  the  purpose  of  constructing  roads  to  and  through 
homesteads,  and  that  all  payments  on  account  of  homesteads  here- 
after be  set  apart  and  placed  to  the  credit  of  a special  fund  to  be 
