The Birmingham age-herald., 1912-11-01

state of Alabama. The state auditor has reported that the actual deficit at the close of the fiscal year, September 80. was S414,041.77. The new fiscal year began October l, and owing to the re- opening of the public schools the eX- penses of the state are unusually heavy during the months of October, Novem- Der and December, while it's income during this quarter is small, for the reason that while taxes are due on October l they do not become delin- quent until January 1. There Is no provision in this state for allowing a discount on taxes paid in advance of the delinquent date, hence tax pay ments are as a rule deferred until the
 last days of December.
 While the constitution authorizes the governor to negotiate temporary loans to the extent of $300,00O his ne gotiations are limited by a Legislative enactment at a time when there was a large surplus in the treasury, to sl00, 900, which, at the time, WAS deemed sufficient for any contingency. At the same time 5000 year was ap- propriated for payment of interest on temporary loans. The legislature of 1907, whose appropriations trans formed the treasury surplus into deficit, made no provision for a larger temporary loan nor did 1t increase the previous appropriation of 5000 year for interest.
 Cautiously enough, the legislature or 1911 took no steps for tiding over the treasury, so that at present only $looo a year Is available for interest on tenn porary loans, which cannot exceed .s1O0,OO0 However, the legislature in 907 and again in 1911 appropriated S1O,00O a year for four years as the governors contingent fund. Arrange ments have been made for several years past, both by the present governor ana by his predecessor, for the purchase by banks of warrants on the state treas ury the banks stepping into the shoes of the original holders of the war rants, and the banks interest charges have been paid out of the governors contingent fund. In this manner a large sum was furnished by banks last year, and during the present year an even greater amount has been ad- vanced so that in January, 1913, proba- bly, more than $1,250,OO0 Will be paid to banks for state warrants carried by them as loans. Many other matters be- sides interest on warrants have to be provided for out of the contingent fund, so it appears that the available bal ance of that fund during the term or the present administration will be ab- sorbed in paying the interest already accrued on temporary loans ana Wdr- rants held by banks
 Present indications are that 1t Will be necessary for the state to negotiate another temporary loan next summer, and also to arrange for a large amount of warrants to be carried over next fall but it does not appear how, with the resources now at the command or the administration, fund for payment of interest thereon, can be provided. No loan, however secure as to pr1n- cipal, can be negotiated without 1n- terest. and for the reasons above out lined, it is difficult to see how an ex- tra session of the legislature early in 1918 can be avoided, however reluctant the governor may be to call 1t.
 "The necessary business of a special session could be transacted and an ad- journment had within 10 days, but prediction that such will be the case would be an expression of optimism which even the existing wave of pros perity does not justify.
 THE FIRST NATIONAL BANK OF BIRMINGHAM"