MESSAGE ST1ATE OF GEORGIA, Executive Department. Atlanta, August 10, 1918. Gentlemen of the General Assembly: There are three matters to which you are now de- voting earnest thought of such importance that it was deemed advisable to address you this special message concerning them. FINANCES. As to one-the State's finances-the status of your work presents a situation that apparently demands a frank expression of my views. It is anticipated also that a full and accurate statement of the condition of the State's financial affairs may be helpful, if not to all, certainly to those of your Honorable Body who, in the multitude of matters with which you have dealt at this session, may not have had the opportunity to acquire a detailed and definite knowledge of the subject. This tabulated statement following will visualize the situation that must inevitably confront us the first of next year, unless of course, the anticipated revenues, whic:h are liberally estimated, should far exceed present expectations: Appropriations for 1917 carried in the General Appropriations Bill of 1916 and Special Appropriations Bills in 1917 unpaid August 1, 1918________ $ 149,268.51 Appropriations for the year 1918 carried in the General Appropriations Bill of HH7 and Special Bills of 1917 unpaid August 1, 1918 ____________ 4,538,410.01 1 Deficiency appropriations carried in the General Appropriations Bill of 1918, to J.e paid in 1918____________ Temporary loan and interest clue September 15, 1918 __________________ 195,000.00 204,500.00 'l'otal . ___________________________ $5,087,178.52 Balance in treasury August 1, 1918 _________$ 132,958.53' Estimated iucome Augnst 1st to ,Jan 1, 1!llfl, based on income for same period of 1917, including $70,000,000.00 increase in taxable values as now estimated by the Comptroller General __ 3,315,611.00 Total _________________$3,448,569.53 Dellciency January J, 1919 __________$1,63'8,608.!J9 Some word of explanation concerning the foregoing is necessary: In order to pay our Confederate Veterans their pensions in full; it was necessary to negotiate the loan set out in the fourth paragraph. The interest charged, which will be borne by the State, is very reasonable ancl no difficulty was found in placing the loan. A contrart as anthorize<1 urnfor the law passed scwral ypa1s ago ,vas made whereby $2,000,000.00 of sehool wmT,mts ]11\\'c lw(m used in order to pay our school tc>,1ehers 1'or 1!)18. 'rl1is method of anticipating taxcs-"liieh is something akin to kiting -is aeeomplishf'd :1t a high rnte of discount to the already poorly 1iaid tcaeltns of GPorgia and should 2 be discontinued. The mm contract was hard to ob- tain at any rate of diRconnt, due to unsettled conditions gro"ing out of the war, ancl hut for the state interest and pride of some of our Georgia banl,ers, it is verr Jll'ohahle that the 1Yarrants could not have been disposed of at all. It is unnecessary to cliscuss the advisahilit~- of making prompt provision to avert the embarrassment that will inevitably eventuate if this practire is not discontinued. Th, amount of warrants annually discounted should C(~l tainly not h1 e increased and immediate steps should be taken looking toward the balancing of this item on the State's books. rI1he foregoing explanations al'(' n0cessary to a cornplde unclerstancling of the present situation ana methods of state fimmcing. This method has been in vogue since the passage of the Act of August 13, 1915, to be found in Georgia Laws of that year at page 56. The following table shows the clifferences existing between appropriations and revenu0s for the years Hl13 to 1917, inclusive: 1914, nnpaicl balances ,Tan. 1st ______ $1,607,431.39 Bnlrmre in treasury.Jan. 1, 1014 ______ 709,625.25 nefi c1 ency ________________________ $ 897,806.14 101;5, unpaicl balances .Tan. 1st _______ $1,901,702.07 Balance in treasury ,Jan. 1, 1915______ 787,455.88 Deficienry - - - - - - - -- _______________ $1,114,246.19 mm, unp11icl hnlnnces ,Jnn. 1st _______ $2,257,361.73' Balanl'P in trcmmry .Tan. 1, mm ______ 842,799.02 1lefi