The times-news. [volume] (Hendersonville, N.C.) 1927-current, 1933-04-19
NEWSPAPERS OPINIONS
IN FACT OR ON PAPER


Governor Ehringhaus has succeeded in renewing
short-term notes amounting to more than %o'ooo'-
OOO in New York at a rate Of interest Of SIX per
cent for go days
The Governor is to be commended for his sue
cess in this undertaking. considering the condition
Of the financial market, but while ne IS being 1c-
dictated for this accomplishment the fact that SIX
per cent interest had to be paid remains as hy
in the ointment.
That IS too high rate Of interest for state
like North Carolina to pay and one Of the reasons
the interest account of the state is so high IS be-
cause of the uniformly high rate that has been ami
is still being charged the state for its borrowing
The reason assigned for this rate IS that the
bankers refuse to bring it down so long as the
budget stays out of balance.
Thai is the equivalent of saying that North Car
olinas credit is not as good that of some other
states because it is spending more than its reVe-
nues Justify state that continually maintains
a fiscal policy like that is penalized by the banking
houses with higher rate Of interest than some
other governments are charged.
Turning the issue squarely around, it is aXio-
matte that if North Carolina balances its budget
its public credit will he stronger, showing itself IN
easier money, and lower rates of interest.
That is good banking policy. One can find no
fault with the theory upon which the creditors OF
the state are operating n this regard
There is, however, fault to b efound with the
process by which the legislature proposes to bring
the states appropriations and revenues back INTO
eouipoise and the method to be followed by which
it will be possible for the state to be dealt with
more generously by those with whom It is forced
to have financial negotiations.
Balancing the budget on paper and balancing
the budget in fact quite different propositions
Ii is conceivable that the legislature will balance
the budget of the state at or around $83,OO0'OOo
for the coming biennium.
In other words. it will appropriate $83,OOO,OOO
and so adjust its revenue producing measures thai
they should, granted they work out in accordance
with the legislative design, produce the $03,OOO-
600 which will be spent.
That however, represents no better than book
keeping balance of the budget, and, therefore,
should have no important bearing the impair
ment or the strengthening of the int gritty Of the
state government.
What the New York bankers should insist upon
and doubtless, anticipate, is that the spending
level announced for the state will be supported
by revenues actually paid .ather than oy revenues
which the legislature hopes may come IN
A great gulf separates these two propositions
what the legislature may levy for and what the
people will be able to provide out of their earnings
for governmental cost
The Observer has consistently taken the position
that North Carolina taxpayers will not have $685.
600 900 during the next two years to pour into
their state governmental costs and that the legls'
lature in fxmg this spending level and adjusting
revenues thereto is proceeding merely upon a
fancy rather than upon the logic of fact in antic-
patng that any such colossal sum as this in taxes
will be paid by our people.
Therefore, so long the appropriations remain
higher than may reasonably be expected that reve-
nues will be sufficient to cover, the budget is not
balanced except on a sheet of paper and the credit
of the state is not helped one iota by that sort Of
budget Observation-Disclosures Observer.