The Birmingham age-herald., 1916-01-06
Chairman John B. Weakley Asks If This Is Cheapest
 Way to Handle Matter
TEMPORARY LOANS
 USED IN THE PAST
Writer Contends Incoming Taxes Make This the Most Business Like Way of Caring for the
 States Indebtedness

Chairman John B. Weakley of the house committee on finance and taxa
 ton has submitted the second of his articles in opposition to the proposed state bond issue. The first was pub
 lished in last Sundays Age Herald MT. Weakley writes as follows:
 To the Editor of The Age-Herald. In my last article on the bond issue, I left the voter asking himself the ques- tion: What shall do about the efficiency which now exists, assuming that here after the state may live within it's in- come?
 Before deciding this question, the voter must ask another: What will it cost the people to issue bonds and pay the debt we owe in the manner advocated by the governor?
 It may be safely assumed that the actual cost of printing and placing the bonds on the market will be met by the premium which the bonds will bring at the sale. At this time, bankers want good bonds, the demand Is greater than the supply. At any rate we need not deal seriously with the cost of placing the bonds on the market.
 FINALLY PAID IN 1929 Under the terms of the act the bonds must be issued and dated within 30 days after the election. The entire amount bears interest at 5 per cent per annum from date until January 1, 1920, when the first payment of $150O00 falls due, thereafter a similar amount is due and payable each year until 1929 when ac- cording to the present programme the entire debt will have been paid. Assum- ing that the bonds will bear date Feb ruary 1, 1916, the entire amount of in- terest to be paid from the issue of the bonds to the date of the ultimate pay ment of the debt will be $631, ,250, which is a trifle over 42 per cent of the total debt. It will be observed that no pay ments are to be made on the debt until 1920 after the expiration of Governor Henderson's term, that the burden will be passed on to his successors after the state has been committed to programme which calls for the payment of 42 per cent of the original debt in interest alone.
 This is according to the programme, but will the programme be carried out? How do the voters know, that In some way, by another constitutional amend ment or by an ordinance of another constitutional convention, the ultimate payment of the debt will not be post poned?
 In the constitutional convention of 190l I pleaded for programme for the grad ual retirement of the state debt. Not only did I speak to deaf ears, but an ordinance was passed making it compul- sorry upon the governor to issue 5o-year bonds with no privilege of prior pay ment being retained. I can count on the fingers of one hand the cases where bonds once issued have been paid in Ala bama during my business experience of over 30 years.
 IS IT CHEAPEST WAY?
 But granting that these bonds are paid according to programme, what about the 42 per cent interest we are paying simply to get a breathing spell? Is that the cheapest and best way to handle the situation? Men who are accustomed to pay interest know that payment of in- terest in no way lessens the debt, the only thing we are going to get for that $63l, ,25O, which the governor advises us to pay, is indulgence. Is it worth the price? Think how much good all that money would do in building up the Uni versity and Auburn, to say nothing of the common schools of the country. Is there any real reason for binding the state to the payment of $63l,25o simply to get breathing spell?
 We are told in the governors state ment that the amount of warrants out standing unpaid was about $2,25O, 900; to pay this amount there has been leVleQ, and there is now being collected taxes for the year 1915 on the real and personal property in the state the grand total of &, ,O7O, ,O2671, which amount is, or should be, applied to the payment of the out standing warrants as fast as it comes into the state treasury
 To any student of finance, it will read fly appear that our assets in the way of assessed taxes exceed our liabilities in the way of outstanding warrants by about $1, ,75O, 000 and according to law. and the previous course of business, the great bulk of this money will be paid into the treasury by February l. and by that time the Outstanding warrants should be paid off entirely and the financial oper- ations for the year 1915 will have been closed and the voter will ask himself What about the year 1916?' It must be remembered that in state financing the levying of taxes Is a continuous per- formance and that while tax collectors are busy collecting the 1915 taxes, other agents of the state operating under the new revenue law are fixing valuations as basis for levying taikes for the fiscal year beginning October 1, 1915 and ending October i. 1916.
 IS COMMON PROBLEM If the taxes levied for 1915, and other sources of revenue, will by February or even March 1 pay off all the outstanding