The idea for Alabama's state motto came from Marie Bankhead Owen of the Alabama Department of Archives and History while searching for a phrase to be put on the state coat of arms (completed in 1923). The motto was inspired by a poem by the 18th-century author Sir William Jones which includes the stanza,

"What constitutes a state? . . .
Men who their duties know,
but know their rights,
and knowing, dare maintain."

The motto was translated into Latin by Professor W. B. Saffold, of the University of Alabama.

Source:

Kids Symbols & Emblems: Alabama Archives & History

Links:

State Mottos - 50 States