The age-herald., 1899-06-25
ALABAMA'S BONDED
 INDEBTEDNESS
Figures Showing the Saving By a
 Refunding of the Bonds.

the governor to make a contract for the retirement of the old bonds, on the ground that it would be a saving of interest. The contractors are to be paid out of the inter- est so saved and in such an amount as the governor may think reasonable. An amount of money is also appropriated out Of the general revenues of the state to compensate the contractors as from time 10 time the refunding is effected, whereby interest is saved.
 The part of the section in which the gov ernor is given this additional power is as follows: And the governor is also hereby authorized if in his judgment it should appear necessary so to do, to make on behalf of this state a contract or contracts for the retirement of bonds of the sta'e now outstanding, or any part or parts thereof prior to their maturity, by the is sue of said revenue bonds; provided, that the said contract shall be made upon terms which shall result in saving in the rate of interest to be paid by the state on ~s bonded indebtedness, or in such parts thereof as shall be refunded under sucn contract or contracts by the issue of such renewal bonds. Such contract or contracts may provide for the payment or compen- saton by the state to the person or cor poration with whom such contract or con- tracts is or are made for such saving of interest to the state, which compensation may be such portion of the interest so
  ment of the governor making such con- tract be deemed just and reasonable, and an amount of money is hereby appropriated out of the general revenues of this state sufficient to pay such compensation from time to time as such refunding is effected whereby such interest is to be saved. The state auditor shall draw his warrant from time to time for the same on requisition of the governor from the amounts provided In this act. The interest on said bonds may be made payable semi-annually and such interest and also the principal in the discretion of the governor be made pay able either in the city and state of New York or in the city of Montgomery and state Of Alabama, or at either place at the option of the holder of the bonds."
 While for political purposes a saving of interest covering fifty years could be read fly ciphered out by esteemed and truly loyal journals, yet in law and in all common sense the saving in interest must relate to the years in which the present bonds have to run, namely, until 1906. Of the bonds maturing d that date, $7427600 bear per cent. interest, and are worth in open mar ket 113. Bonds to the amount of 900 bear per cent. interest, and are worth l00. Tennessee new settlement 3's are worth 9S12, and North Carolina As are worth lO412 Louisiana As being no, and the New Orleans As are quoted at ll3 South Carolina 4s bring 104, and Georgia 31a are HNNtCu ol Ill. GeOTSld 412 are neld al 123.
 May Be Sold At Far
 Bonds bearing 31a per cent. interest, run ming fifty years, can probably be sold in New York at par; but the selling of seven or eight ilions of such bonds at par is not all there is of the problem. The old bonds must be drawn in. If purchased at mar ket rates there would be no saving in in- terest, as simple sum in arithmetic will show:
 Saving of interest on the 5s.. .. .$66S, ASA Saving of interest on the As. .. .. .. 2S,9S)
 Total saving in six years. .. ..$697, AGA Premium on the 5's... =. ... ...... 742,7 ,760 Actual loss to state... .. .... ...$ 45, ,296
 If the holders of the 5's are induced to exchange them for 3A per cents., there would be a saving of $66S ASA in the six years the bonds have to run, but there would probably be a loss to the state of one-half of 1 per cent. In the other forty four years that the new bonds would run, because in 1906 the indebtedness can be- yond reasonable doubt be refunded at per cent.