The Prescott daily news., 1914-08-24
GREAT SAVING IN
 INTEREST CHARGES
INDISPUTABLE FIGURES SHO" ADVANTAGES OF THE MuNlC-
 lPAL BOND AMENDMENT.
(Greatef Arkansas Association)

(tIE6dlGF
 Arkansas cities and towns, under present arrangements, are forced to pay high rates of interest for accom- odation. Under the terms of proposed Amendment No. II, mo bonds or oth- CT interest bearing evidences of in debtedness. issued under the author ity of this amendment, shall ever be sold at less than par, and when ls- sued by cities of the first class they shall not bear greater rate Of inter est than five per cent per annum' anu when issued by cities of the seconl class and by incorporated towns or 1000 or more population, shall not bear a greater rate of interest than six per cent per annum."
 It is a we'll known fact that many cities and towns in Arkansas have been forced to pay not five per cent, or six per cent, but eight per cent per annum, and more, for short time ac- comodations The alternative has been placed before the officials Of such cities and towns either to pay such rates of interest, or to permit much needed public improvements, ot a general character. to fail for lack ot assistance by the cities or towns.
 Strange as it may appear, cities and towns in other states, under laws sim liar to that proposed by the present amendment, are able to obtain mon ey by the issuance of long term bonds at very low rates. namely, 1 per cent. 1 1-2 per cent, , per cent or per cent whereas, Arkansas cities and towns now desiring money for two, three or four years. are forced to pay eight per cent per annum, or more.
 Suppose the aggregate indebtedness of the State and towns of the State of Arkansas was being carried at 4, 4 1-2, or 6 per cent instead of the rates which cities and towns are now forced to pay for accommodation. Fig ure for yourself the saving there would be to the people in the amount of interest per thousand dollars, by figuring the difference in the rates and multiply that amount by the num- Der of thousands of dollars which the people of your community now owe, or have been forced to owe, during the past ten years.
 As the constitution is now no city or town can issue interest bearing evidences of indebtedness Arkansas cities and towns, by general consent In order to make public improve 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 to five or six years in the future.
 Under the presen, law these war rants 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 a rate of interest of per cent per annum or higher No criticism of the banker can properly te made, for the reason that the warrant cannot bear interest, and therefore is not considered first-class bankable paper A municipality issuing such a warrant would receive in cash under the law as it is at present, only six hundred dollars, or less, and that amount, and not one thousand dollars, would be the amount which would be left for use by the city: whereas, if the mu- nicipalitv could issue an interest bear ing certificate of indebtedness. bear ing say per cent interest, the city would receive the full amount of one thousand dollars in cash, but would not pay the interest of $50.00 each year until after the city had used the money for that year.
 In short, the passage of proposed Amendment No. IA will enable Arkan-