The age-herald., 1899-06-25

b BOnuS, que lSUo at per cent. 0ioVVo "C" bonds due in 1906 at per cent. 966 900 Funding bonds due 1920, per cent. 9540OO
 Total ........ ........... 9,35i 6O9
 The annual interest bill is $44S,GSO. The bonds due in 1906 amount to s, 500, and the interest due upon these bonds annually is $4l0, ,490. If the interest charge were cut down to per cent. the annual saving would be S74,376; if the rate were reduced to 3]2 per cent. the annual saving would be $1l6,44; if it were brought down to bedrock or three per cent. the annual saving would be $15S4l2.
 Matter of Six Years
 The saving in interest is a matter of six years only; for in 1906 three classes of bonds. aggregating $S,lO3,6OO, become due and payable. At present these three classes can only be drawn in by negotia- tion. The holders may be induced to ex- change them for a long-term bond bearing a lower rate of interest, or they may be purchased. Consols or A bonds sell ing in New York at 11O to 113, and "B' bonds are worth no. These bear five per cent. interest The "C" bonds bear four per cent. interest, and sell at par, about lo6 If A ana B bonds were bought at ll0, the new bonds would have to be three-per- cents and be placed q par in order to ef-
 
 elapse before the bonds could be called in
 Any saving of interest after 1905 would accrue in any event. Money is year by year becoming cheaper, and Alabama's wealth is accumulating and it's credit rs- ing. Article XI of the constitution forbids any increase of the public debt. It reads as follows:
 Section 3. After the ratification of this constitution, no new debt shall be created against or Incurred by this state, or it's au- thority except to repel invasion or sup press insurrection, and then only by concurrence of two-thlrds of the members of each house of the general assembly, and the vote shall be taken by yeas and nays and entered on the journals; and any act creating or incurring any new debt against the state, except as herein provided for shall be absolutely void Provided, The governor may be authorized to negotiate temporary loans, never to exceed one hun dred thousand dollars, to meet the defic- iencies in the treasury; and until the same provided further, That this section shall not be so construed as to prevent the issu- ance of bonds in adjustment of existing state indebtedness"
 Await Maturity of Bonds
 The more natural and business-like plan would be to await the maturity Of the bonds, or the year previous to their maturi- ty, and then refund them. United States bonds three-p -per-cents are now worth lO9, which reduces the rate of interest to about two and one-half per cent, or the rate that English consols will soon bear. There Is no reason to doubt that $S,403,600 in Ala bama bonds could be refunded in 1906 at three per cent, and any bargain made now below that basis would be a probable loss to the state, however much political capital might be gained from it.
 The general assembly of 1S94-95 passed act authorizing the governor to issue bonds at a rate of interest not exceeding per cent. for the purpose of adjusting and con- solidating the bonded indebtedness of the state of Alabama These bonds were to be termed renewal bonds of the state of Ala bama." They were to be made payable at the expiration of not exceeding fifty years, but were to be subject to be called In Tor redemption from and after fifteen years from the date of issue
 It will be noticed that no minimum limit for rate of interest is prescribed. The max imum limit 4 per cent. at which the gov ernor is authorized to sell the bonds IS now considered very high for Alabama bonds.
 Section 2 of the act gives directions as to how the bonds shall be issued ana pre- scribes the duties of the state ofhcers Tn the premises thereof The bonds are to be issued in denominations of not less than s1OO nor more than $1 ,000, at the discretion of the governor
 The following proviso Is also made in this section: "Provded that three months De- fore issuing any of the bonds herein pro- ~Tided for. and just after the passage of this act. the governor shall by proclamation publish for thirty days in some newspaper published in Montgomery a call TOT sup scriptions to a popular loan, the proceeds of which loan shall be promptly applied to the redemption of the present outstanding Indebtedness of the state as heretofore mentioned in this act, and by such simultaeous and further proclamation, negotiation or proceeding. by sealed pro- posals from the holders thereof or other wise"
 Authorized Small Denominations The section further authorizes bonds of small denominations bearing annual inter" est of per cent. These bonds were to be receivable for state, county and municipal taxes but when so used interest shall not be paid thereon. The purpose of issuing said bonds Is de- scribed in section of the act as follows: (Which is hereby declared to be for the purpose of creating fund, by means of which the governor may be able to pay or call in or renew or exchange, take up and cancel the bonds of this state, issued under ar act to ratify and confirm the settlement of the existing indebtedness of this state approved February 23, 1S76" Under section 4. In no instance Cd1 any Ol lIeSe JULIUS be sold for less than par or face value. Section prescribes the power and author ity of the governor, and is the section un- der discussion in the issuance of these bonds The last legislature passed an act which amended this section and changed It considerably. Section of the original act reads as follows: 'Be 1t further enacted, That the governor be- and he Is, hereby authorized if. in his judgment, it should appear to be best, to exchange the bonds issued under this act dollar for dollar for the bonds now out standing mentioned in the third section of this act, and that he is authorized if, in his opinion, it may be necessary or expedient, to appoint some bank or banker in the city of New York or the state of Alabama the financial agent for the state to carry on the negotiations provided for In this act. To make sales or exchanges of bonds and to pay interest on said bonds. provided that said financial agent shall be required to give bond in such an amount and with such security as the governor may require, a,d tho OovernOr Is alIthOrized to nav then,