The Birmingham age-herald., 1914-07-25

| Senator Lea of Tenn sssee are also lined up against the Bourne bill
 Senator smith favors a straightout ap- propriation from the treasury, and will fight for the Shaclelford bill. which has already passed the House, and which car ries an appropriation of $25. 000,00O for good roads work. He will suggest an amendment to the bill to provide that con vict labor shall be credited as a part of the states contribution to secure the bene- its of the funds.
 McAdoo Writes Bankhead
 Under date of July 15 Senator Bankhead had letter from Secretary McAdoo voic- ing his protest against the Bourne bill. He declared it was a most serious thing to double the national debt as was pro- posed, and that such plan would in evitably bring on trouble.
 The national debt is now $96S, ,00o coo, and this would be increased by $1,000 000. 900 within five years, or more than doubled under the proposed measure. The secre- tary declared that it was extremely doubt full if the government could sell this amount of per cent bonds at par and ac- crued interest.
 ''The indebtedness of sovereign gov ernment has a more significant relation to it's assets than that of an individual" wrote Secretary McAdoo, because the se- curity of the government debt rests not only upon the honor and good faith of the government. but also upon the character of governmental policies and as to whether or not these policies may in time serious ly impair the credit and responsibility of the government
 If the proposed policy of bond issues on so huge a scale to provide for good roads was carried out, it would inevitably call for billions of money.
 No matter how good the credit of the nation may be, 1t will be hurt if the na- ton enters upon a policy of practically unlimited expenditure through the crea- ton of great public debt. The greater the public debt the higher the rate of interest the government must pay
 T am convnced of the unwisdom of the policy and I believe that it will have a serious effect upon the credit of the gov ernment," declares the Secretary of the Treasury.
 Continuing, he said if Congress deter mined to enter upon this it would be a mistake to limit the rate of interest to 8 per cent as it might easily happen that the bonds could not be hoated and the purposes of the act carried out.
 Discussing the provision for the issuance by the states of per cent bonds to secure thS icuci al SoNtlHlHcill, ne Sd1Q there was no guarantee that there would always be margin of l per cent between the state and government bonds.
 Whole Purpose Fails
 If this is not a practicable scheme, the whole purpose of the bill fails,' he said. As before stated. I do not be- lieve that it will be possible for the gov ernment to dispose Of vast amount of per cent bonds at par. I am confi- dent as the issues of government bonds increase the rate of interest will increase, and that such rate will gradually ap- proach, if it does not exceed. in time the per cent interest to be paid by the states
 It is wholly fallaciouS to assume or to expect this result insisted the Secretary. If the government should make the loans to the different states. what assurance is there that each and every state will all ways punctually pay to the government the interest on the indebtedness? It is conceivable that a state some of the states, may become involved financially: or that they may fail to pay interest on their indebtedness to the government In that case what recourse will the govern ment have? It cannot distrain a state; 1t cannot coerce, or take possession of and administer the finances of state A most awkward and embarrassing situa- ton might arise, and 1t is quite conceive able that the government might find itself unable to protect itself in the eircum- stances.''
 Secretary McAdoo scored heavily against the proposed bill in calling att tention to an act of Congress passed in June 1856, and approved by President Van Bufen, under which all the moneys in the treasury over and above a work ing balance of $5000,00O were to be depos- ited in the state treasuries, subject to call when needed.
 1 Under this act the government de- posted with the treasuries of che 25 l states composing the union at that time l $2S ,l01, 6i4.91," said MT. McAdoo. With l in a short time thereafter a financial l storm swept over the country; the treas l ury was on the verge of bankruptcy and could no longer pay money to the states l When the Secretary undertook to recall the deposits, Congress passed an act ap- proved October ?, 1887, which prevented I the Secretary from making such recall by providing that the money already de- 1 posted shall remain on deposit with the | states until otherwise directed by Con-
 gress.' The s2s,000,00O and more thus deposited, said the Secretary, has never l been repaid.
 l Referring further to the Bourne bill, 1 Secretary McAdoo says: Tt assumes l that the credit of each state and each | county is equally good and that their | bonds should be assessed on the same basis This is not a fact he says, as | there are some counties whose credit does not justify an issue of bonds at 5 per cent or at any other rate.
 | The Secretary gives his views on the 1 subject of co-ordinating the work of con- | structing national highways in the fol- lowing paragraph copied from his letter: | "A very grave objection to the bill is its failure to secure, even if the $1, ,000, 900, i GOO of government money is loaned to the states, the construction of continuous
 national highways. Leaving to each state, as the bill does, the right to expend
 the money in any way it sees fit, this
 connected road may be built with no uni l formity of standards and no well devel- oped and co-ordinated interstate and in- | trastate plan.
 | Adequate maintenance of roads is more l important than an issue of construction. | Because unless fully maintained they soon go to ruin and the original expendi- | ture Is wasted. We are suffering from this very experiment in my own state of New York"
 Sentenced to Buy Wife New Bonnet From the Louisville Courier-Journal