The Birmingham age-herald., 1916-01-20
STATE CAN SECURE MONEY NEEDS AT
 LOW INTEREST RATE
Bibb Graves Says Alabama Should Now Be Entirely Out of Debt in
 Three Years

That the state of Alabama can and probably will borrow all the money needed at very low rate of interest and take care of it's outstanding in- debtedness was the opinion expressed last night by Bibb Graves, of Mont gomery, chairman of the state demo cratic executive committee, who was in Birmingham
 Furthermore, without any issuance Of bonds, the state of Alabama will be entirely out of debt in less than three years with the continuation of the present receipts and disbursements ac- cording to MT. Graves, who was one of the leading opponents of the bond is sue.
 In discussing the financial situation last night, MT. Graves said:
 The governor can and doubtless will arrange now to borrow enough money at low rate of interest for short time to pay off the indebtedness which is hanging over the state. If the record of the past year is contin- ued and it certainly will be. Alabama will be entirely out of debt within three years and the state will have no bond issue of S1,500,000 hanging over it.
 strange as it may seem, money for long time now is hard to get and calls for a high rate of interest, but money for a short time is extremely
 
 low rate of interest The reason for this is that there is a tremendous sur plus of money in this country now which is seeking investments, but only for a short time. Financiers are not willing to tie up these tremendous sums of money for long periods of years in bond issues without high rate of in- terest for they cannot foresee what a demand there will be for money after the war in Europe ends. The best posted financiers are of the opinion that within six months or a year after the war closes there will be an ab- normal demand for money, both in this country and in Europe. Hence the high rate of interest on long time loans and the low rate on short-time loans.
 Last year, according to figures Of the state auditor, the state of Alabama spent more than $1.000,000 less than it did the previous year. The previous year the state spent $500, 900 more than its income. Thus it is that but for the past debts the state would now have surplus of s700,000. This record will continue during the Henderson admin istration, as the legislature did not make large appropriations which would take the money. None of the appro- priations can be paid until the money is actually in the treasury, so they will not figure in the receipts and disburse- ments until all the debts are paid. At the present rate of receipts and dis bursements the state will be out of debt in less than three years.
 'As to the ability of the governor to borrow the money. that matter was provided for by the legislature A contingent fund of $100,000 was voted and it is expected that it will be used for the purpose of paying interest on this money borrowed to pay the debts. The state of Alabama can borrow mon ey at per cent or less under the pres short time. The contingent fund of the governor is sufficient to pay the inter- est on a loan of S2,500,000 for one year. which is ample to meet all the needs of the state. Of course it would not be necessary to borrow that much and a certain times of the year when the taxes first come in the loan would be small
 These figures showing that the state is now creating an annual sur- plus of S700,000 as against a deficit of $300,000 annually before, are absolutely correct The convict department is now making a better showing by S300.- 900 each year than it did before. This is caused by reduction of expenses amounting to $150,000 and an increase in the lease price of the convicts of the same amount When the judiciary bill goes into effect in 1917 there will be considerable addition to the amount now being saved. The state of Alabama is now being run on a sound and economical basis and it's financial condition will soon be good. With this temporary loan. which can certainly be made, there will be no need for con- tinuation of the present conditions"