Turnabout

Like several other Southern states seeking to lure Northern industry, Tennessee in 1951 passed a law allowing local communities to issue revenue bonds to finance industrial expansion. Last week the law was used in a way Tennesseans never expected. Citizens of Sevierville (pop. 1,700) voted unanimously (544 to o) to issue $2,000,000 in bonds to build a new plant for the Cherokee Textile Mills--which is moving, not from the North, but from Knoxville, just 24 miles away.

When the bonds are sold, it is likely that Cherokee Mills will buy the biggest portion. The rent the company will pay for the plant will be just enough to cover maintenance, bond interest and amortization. Thus, most of the rent the company pays Sevierville will go back to Cherokee as interest and amortization on its bonds. In effect, the company, which employs 700, will get a modern, tax-free plant, instead of an older building on which it paid taxes in Knoxville. While Knoxville was angry about the deal, Sevierville was jubilant, figured it meant hundreds of new jobs for the townspeople and more money in the pockets of merchants.

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