The Birmingham age-herald., 1920-11-14

The matter has been brought to the attention of Gov. Thomas F. Kilby OF his two recent visits to Bir- very strong arguments were presented to the chief executive urging that he use his efforts to bring about rold- tion of the problem which would not have the dire results predicted to fol- low the strict enforcement of the re- cent ruling.
 Several of the civic organizations of Birmingham have entered strong pro- test against the enforcement of ths ruling to tax all loans made in this state by foreign corporations and many of the leading individuals of Alabama. They predict that development in the state will be largely strangled at this time by the tax and that it will be in effect breaking faith with the com panies which began doing business in this state under the law which exempt. ed their loans from taxation. BREACH OF FAITH
 The recent ruling of the state tax commission, according to local business men, overrules In act of the legislature of 1907 which declared that loans made in Alabama by foreign corporations should be exempted from taxation It lis contended that many banking and insurance companies began making large loans in Alabama at rates of in- terest lower than could oe secured elsewhere as soon the law oeca ne effective, and to tax them now would be in effect breach of faith. Under the ruling of the state tax commis- sion it is contended these loans " ould not only be taxed in the future hut for all the years they have been nnade..
 Such policy would, in the opinion of Birmingham business men, result in calling all loans as soon as they be- came due. This would bring about a most serious situation, it is pointed, out as many large firms and individuals have borrowed money to construct buildings and to make other improve ments which they would not be re- pared to pay in full at the time of n,a- turity.
 Despite the fact that these foreign corporations made longtime loans Of nature which banks do not ordina- rily handle, and in spite of the fict that lower rate of interest is charged than the banks secure, the banks of Alabama are declared not to be an- tagonistic to these foreign corpo-A- tfons, but are said to welcome them, as they supply need which the banks cannot meet.
 SITUATION SERIOUS
 With the present heavy demands cu the resources of the banks to handle the ordinary commercial paper and the financing of the cotton and other crops, if is cOntended that tho eitla- tion would become serious were these foreign corporations not here to meet the demand for loans on real es tate and farms and for many other forms of public, improvements.
 Ii is 10 these foreign corporations that 1 make loans for a longer time than hanks and which charge rate of .n- terest lower than that of commerc banks that the business interests of the state are looking to finance the build Ing of hmoes to solve the housing sit. uatlon and to provide the necessdf V money for the improvement of agricul- tural conditions to meet the present day demands,
 It is declared by those who have conferred with Governor Kilby that e Is giving the arguments advanced against the enforcement of the ulins his very careful consideration His decision in the matter is expec. ed to be made as soon as he can make the necessary legal investiga ations