The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1904-10-09
FURTHER DISCUSSION
OF ALABAMA DEBT
Mr., Harding Gives Resume of
Existing Legislative Acts
POPULAR SUBSCRIPTIONS
AS There VIII Be No Extra Session of
the Legislature the State Debt
Must Be Refunded Under
the Act of 1899.

In the following letter President w. P.
q. Harding of the First National bank
submits a further discussion of the state
debt:
To the Editor of The Age-Herald:
AS the governor has decided definitely
not to call an extra session OF the legis-
lature which will not meet again In
regular session until 1907, 1t Is evident
that the state debt will be extended I'M
der the provisions of the act OF Feoru-
AIRY l6, 1899, and of such portions OF the
preceding act of February 49, 1895, as were
not amended thereby.
| The subject OF the state debt has at
tracted a good deal of attention in the
| past two weeks and it would be Well TOT
the public to understand just what au-
thority the governor has under the exist
ing law, as the matter will doubtless be
brought to conclusion In the course OF
u few months either by Acting Governor
Cunningham or by Governor Jelks, II,
happily, he should be able to resume his
duties within that period.
Exchange of Bonds.
A careful reading Of the act of 1899 and
of the preceding acts of 1896 and 1898 will
show that the chief object Of such early
legislation was to provide for an imme-
date substitution of now bonds for the
old, In order to effect a saving in interest
| rates during tho unexpired term Of the
existing bonds, which in 1893 had still
thirteen years to run and in 1899 had
| seven years to run. The provision Oh
the act of 1895, authorizing the governor
to call for subscriptions for popular
loan, was not repealed in the act OF
February 1899, but he was authorized In
lieu of calling for such subscriptions to
appoint one or more banks or bankers In
the city of New York, In the state OF
Alabama, to act as financial agents OF inc
state under his direction. and to carry
| on negotiations to make sales or ex-
changes of the bonds these financial
agents being required to give BOND III
such amount as required by the governor,
who was authorized to pay them a rea-
sonable compensation for their services
in making the exchange or selling of the
bonds out of the proceeds Of the bonds.
The governor is authorized under the
existing law to make in behlaf or the
state a contract for the retirement Oh
the state bonds now outstanding or any
portion thereof prior to their maturity,
by the issue of renewal bonds PROVIDED
the contract shall be made upon terms
which shall result In saving 10 ,ht
state In the rate of interest, and further
with whom such contracts are made
shall be such portion of the interest sc
saved as the governor may deem reason
able. specific appropriation howeVer,
was made by the act out of the general
revenues of the state of such sum as
should be sufficient to pay such compeh-
sation from time to time during the
process of refunding. AS the hVeras
maturity of the outstanding bonds Is pu-
| Of >
II Is plain that the saving of interest by
exchange of bonds will be very much
less than that contemplated at the time
the act was passed.
The Problem to Be Solved.
rso a,,astion therefore, resolves itself
practically to one of making arrange
ments to sell new bonds at not less than
mar, bearing as low a rate of interest
as possible with the proceeds OF Whlch 10
redeem the old bonds as they mature.
The governor has authority to put the
matter in the hands of financial agents
or should he deem best 1t Is entirety WIN
in his province to handle IL hiii,seI. -
ia important. however, that holders Oh
present bonds should have the opportunity
Of subscribing for the new as many Oh
then, might be induced to exchange their
bonds before maturity, thereby resulting
in a saving of interest to the state
Popular Subscriptions.
Tho nlan Of popular subscriptions has
been advanced from time to time ana
much might be said in commentator OF
n The citizens and tax payers or the
state of Alabama should certainly DC
afforded an opportunity OF oWnins III,
bonds of their own state on an equa
basis with outsiders, and theore.,cans
the plan is an ideal one, but practicails
! a. ,,,s+ he considered whether the people