If the county simply issued short-term notes, the interest rate would be about 2 percent, he said.

But today's short-term note sale is an entirely different matter.

Short-term notes usually must be paid back within the next fiscal year, officials said.

Prices of short-term notes also fell, but by a much smaller amount.

The city is planning to go ahead with a sale of $1.3 billion in short-term notes later this month.

Continued delays in passing the budget may force the city to sell short-term notes.

"But we could see quite a reversal in short-term note and bill rates if the numbers are much stronger than expected."

The plan calls for the state to issue long-term bonds instead of short-term notes to cover its deficit.

The short-term notes will be offered to investors through various securities dealers.

Prices of short-term notes and bills were little changed.

Proceeds from the sale of short-term notes will be used for general corporate purposes.

Rather, they argued, the investments were in short-term notes not covered by Federal securities law.

The rest he proposed to borrow by issuing short-term notes that the state would have to pay back within the year.

General Motors was out of control and had to borrow $83 million in short-term notes to meet its current obligations.

Short-term note prices did well compared with bonds yesterday.

Such funds invest in short-term notes issued by towns, cities and schools, among others.

He also helped hold off the county's short-term note holders by convincing them to wait a year before getting the $800 million they are owed.

City officials estimate that $600 million to $1 billion in short-term notes might need to be sold to cover cash-flow needs.

Much of the day's activity was in intermediate- to short-term notes, where prices inched higher.

To cover its accumulated deficit, the state has traditionally issued short-term notes each spring.

He said Columbia's other commercial paper and short-term notes do not come due until July 8.

That would make it more expensive to borrow in the long-term bond and short-term note markets.

Investors are likely to remain interested - but at a higher price - if the county only defaults on its short-term notes.

He said there were still questions about whether such a sale of short-term notes would be feasible from a legal and marketing standpoint.

They also might have to renew the short-term notes they sold earlier this month, which cost the city nearly $20 million in interest.