The Montgomery advertiser., 1905-05-20
w. P. c. Harding, President First Ma
 tional Bank of Birmingham. in New

W. P. C. Harding. President First Ma
 tional Bank of Birmingham. in New
 York Financier.
 The first issue of bonds by the state of Alabama was made in lS2S. the amount being Sl00,00o, redeemable in ten years, the purpose being to provide for a subscription to the capital stock of the State Bank of Alabama Other issues partly for banking purposes anu partly for the construction of railroads, were made in 1928, 1892 and at various dates thereafter. until in January. 1888, the State had outstanding oonos Amounting to S1s,s00, ,000, 43,000,0 hay" ing been issued for railroads and the balance for banking purposes. In lS44 the State Bank and It's brancnes went into liquidation, It's affairs being wound up by a commission appointed by the Governor. After this time the bonded debt of the State was rapidly decreased, the amount outstanding m 1S47 being $9.232,555, and In November. 1858, $4,42S.0 900, and at the outbreak or the Civil War, in 1861, $s,446,OoO. Tne interest on this debt was regularly paid during the Civil War, the State shipping cotton by blockade runners to provide funds in London for its payment. In 1S67-s. when most of the property own CTS of Alabama were disfranchised. the Legislature voted to extend aid to all rallrOaQS WHICH Op DNAAh th ~NA~~
 bama. by authorizing the endorsement of the State on bonds in the sum or sl2.OO0 to $l6,000 per mile. So reckless was the administration of the State finances during this period. that an in- debtedness direct and indirect of moro than $S0, ,0OO. 900 had been piled up by January, 1874, at which time the state of Alabama finally defaulted on all or fits interest Having against this vast in- debtedness a property valuation of only about 313O. 100000, the financial condI- ton of the State seemed hopeless. The election. however, in the fall of 1874, resulted in a political revolution ana the taxpayers once more came into power in December of that year. when Governor George s. Houston was in- augurated, a Legislature converting at the same time with a majority in both houses in accord with him. One of the first acts of the new administration was to call a convention to frame a new constitution, which was duly ratlned by the people in November, 1875. This constitution dealt particularly with the financial problem. and, putting the State on a severely economical pasis' prohibited debt making in future. Com missioners were appointed to negotiate with holders of the bonds, the bulk or which had been issued without regard to the forms of law and without con sideration to the State. and negotia- tions were carried on to such good ef- feet that a satisfactory settlement was made in 1s76 when the debt as finally adjusted and authorized was fixed at $S,s36. 900, all outstanding bonds being included in the compromise except about $500, ,O00, which bonds now con- stitute the entire amount of so-called repudiated obligations of the State or Alabama. Since this adjustment inter- est has been regularly paid on the rec ognized debt and the credit of the State has so improved that the bonds which brought when first issued about 35c on the dollar, have sold as high as ll5.
 The present bonded indebtedness or the State of Alabama amounts to $9'- 357, 500, of which abount $954,OOO bear ing { per cent interest mature In lS2O; S966, ,00O bearing per cent interest are due in January. 1906, and the balance S7.437, 500, carrying per cent interest are redeemable in July, 1906. The Gov ernor recently invited bids for the pur- chase of funding bonds of the State Of Alabama to the amount of SS,4oS,60O, to bear 3 1-2 per cent interest and also called for bids on the same amount to bear 3 per cent interest These fund ing bonds were authorized by Acts of