Pocahontas star herald., 1914-10-02
GREAT SAVING N
INTEREST CHARGES.
sNDlSPgTAeLE FIGURES SHOW
ADVANTAGES OF THE muEIc.
IPAl BOND AMENDMENT.
(Gceller Arkansas AssoclalIonl !

Arkansas cities and towns. under
preaen, arrangements, ATE forced To
pay high rates OF interest for accom-.
odation. Under the terms Of proposed
Amendment No, n, no londs or 9th.
er interest bearing evidences OF iu.
dohtedness, Issued under the author,
jty ot rbis amendment, shall ever he
sold n less than par. and when Is.
sued hr cities OF the first class they
shall not bear greater rate Of inter.
sst than five per cent per annum, and
when ISSUED by cities OF the second
olasa aud by incorporated towns OF
1900 o. more population, shall not
bear greater rate OF lnteres than
cir per cent per annum."
II is well known fact that many
cities aud towns In Arkansas have
been forced TO pay not five per cent
or ats per cent, but eight per cent per
snnun, and more, for short time &C.
comodations. The alternative has
been placed before the officials Of
such c,tIes and towns either to pay
such rates OF interest, or 10 permit
much needed public improvements, OF
a general character, to fall for lack OF
assistance by the cities or towns.
strange as II may appear cities and
'owns IN other states. under laws sim.
liar "a That proposed by the present
amendment. are able to obtain mon.
ay by tue issuance OF long term bonds
nj yscy low rates, namely, per cent,
l-1 per cent, > per cent or 6 per
cent. whereas, Arkansas cities and
tovna nov desiring money for two,
threa 1r four years. are forced 10 pay
eight per cent Der annum, or more.
Suppose the aggregate Indebtedness
~ the state and towns OF the State
Of Arkansas was being carried at g.
sI-s. or per cent. instead Of the
rstei which cities and towns are now
forced ~ pay for accommodation. Fig.
ure Tor Yourself the saving there
would he 10 the people In the amouat
81 interest per thousand dollars, by
figuring the difference In the rates,
and multiply that amount by the mum.
her Of thousands OF dollars which the
people o. your community now owe,
or have been forced TO owe, during
the past ten years.
A tie constitution Is nov no city
or town can issue Interest bearing
evid.rc.s Of indebtedness. Arkansas
ciies iud towns, by general consent,
IN order to make public iIsprove'
ments, for years have made a prac'
tice OF issuing warrants. properly
drawn. and approved In every way as
required by law, these warrants ma
turing from one 10 five or six years In
ths future.
Under rhe present law these war
-arts cannot bear interest, either
from date or after maturity. There
fore such a warrant for one thou
sand dollars maturing In five years
would be discounted by the bank at
n rate % interest OF s per cent per
anuum or higher. No criticism OF
the haukar can properly be made, for
the reason that the warrant cannot
bear Interest and therefore Is not
considered first.class bankable paper
\ municipality issuing such a warrant
would receive in cash, under the law
as II is at present. only six hundred
dollars. or less, and that amount. and
not one thousand dollars, would be
She amount which would be LETT for
uss by .he city: whereas. II the mu
nirinaIltv could issue an interest bear
'ng certificate OF Indebtedness. bear
lng slv : per cent interest, the city
would receive the full amount OF one
thoylrd dollars In cash, but would
not nay the interest Of $4,000 each
wear until after the city had used the
money For that year.
IN short the passage Of proposed
Amendment No. II will enable Arkan
sas municipalities to obtain the use
Of -oney at about one-half the pres
ert rates Of interest as well as "a
make unnecessary the payment OF IN
tcrps. IN advance. as Is now done
For example. under the law as II Is
at present. an Arkansas city or town
which issues a warrant for one thou
sand dollars. due in five years, would
receive at the most only 100000 cash
and would be forced to suffer the de
ductiou Of the sum OF 100000 from the
face OF the warrant as interest for
figs years charged for the use OF the
$4,000. Four hundred dollars inter
esf for the use Of six hundred dollars
Tor five years would equal on the
same basis. the sum Of $666.66 inter
est on 100000 for five years.
On the other hand, when proposed
Amendment No. II has been passed, q
municipality. by the sale Of low in
terest bearing bond for that amount
could realize 100000 cash. and la
ter pay annually the sum of 5000
for interest. or $4,000 interest in the
five years. The differeNce between
. SGG6.G6 and S25O.OO, or S4l666, repre-
sents the amount per thousand dollars
which the present law places as
burden on Arkansas cities and towns
and this is one Of the burdens whicI
proposed Amendment No. IA will re