money, not knowing nor heeding what is being proposed by other committees, and guided by the executive no further than the members choose. All the expenditures recommended must be met by appropriation bills, but into their propriety the appropriations committee cannot inquire.

Every revenue bill must, of course, come before the House; and the House, whatever else it may neglect, never neglects the discussion of taxation and money grants. These are discussed as fully as the pressure of work permits, and are often added to by the insertion of fresh items, which members interested in getting money voted for a particular purpose or locality suggest. These bills then go to the Senate, which forthwith refers them to its committees. The Senate committee on finance deals with revenue-raising bills; the committee on appropriations with supply bills. Both sets then come before the whole Senate. Although it cannot initiate appropriation bills, the Senate has long ago made good its claim to amend them, and does so without stint, adding new items and often greatly raising the total of the grants. When the bills go back to the House, the House usually rejects the amendments; the Senate adheres to them, and a Conference committee is appointed, consisting of three senators and three members of the House, by which a compromise is settled, hastily and in secret, and accepted, generally in the last days of the session, by a hard-pressed but reluctant House. Even as enlarged by this committee, the supply voted is usually found inadequate, so a Deficiency bill is introduced in the following session, including a second series of grants to the departments.

The European reader will ask how all this is or can be done. by Congress without frequent communication from or to the executive government. There are such communications, for the ministers, anxious to secure appropriations adequate for their respective departments, talk to the chairmen and appear before the committees to give evidence as to departmental needs. But in Congress itself they never now appear, nor does Congress look to them for guidance as in the early days it looked to Hamilton and Gallatin. If the House cuts down their estimates they turn to the Senate and beg it to restore the omitted items; if the Senate fail them, the only resource left is a Deficiency bill in the next session. If one department is so starved as to be unable to do its work, while another obtains lavish grants which

invite jobbery or waste, it is the committees, not the executive, whom the people ought to blame. If, by a system of log-rolling, vast sums are wasted upon useless public works, no minister has any opportunity to interfere, any right to protest. A minister cannot, as in England, bring Congress to reason by a threat of resignation, for it would make no difference to Congress if the whole cabinet were to resign.1

What I have stated may be summarized as follows:

There is practically no connection between the policy of revenue raising and the policy of revenue spending, for these are left to different committees whose views may be opposed, and the majority in the House has no recognized leaders to remark the discrepancies or make one or other view prevail. In the forty-ninth Congress (1885-1887) a strong free-trader was chairman of the tax-proposing committee on Ways and Means, while a strong protectionist was chairman of the spending committee on Appropriations.

There is no relation between the amount proposed to be spent in any one year, and the amount proposed to be raised. But for the fact that the high tariff produces a large annual surplus, a financial breakdown would speedily ensue.

The knowledge and experience of the permanent officials either as regards the productivity of taxes, and the incidental benefits or losses attending their collection, or as regards the nature of various kinds of expenditure and their comparative utility, can be turned to account only by interrogating these officials before the committees. Their views are not stated in the House by a parliamentary chief, nor tested in debate by arguments addressed to him which he must there and then

answer.

Little check exists on the tendency of members to deplete the public treasury by securing grants for their friends or constituents, or by putting through financial jobs for which they are to receive some private consideration. If either the majority of the committee on Appropriations or the House itself suspects a job, the grant proposed may be rejected. But it is the duty of no one in particular to scent out a job, and to defeat it by public exposure.

The nation becomes so puzzled by a financial policy varying

1 Unless of course Congress should be so clearly in the wrong that the people were roused to vigorous disapproval of its conduct.

from year to year, and controlled by no responsible leaders, as to feel diminished interest in congressional discussions and diminished confidence in Congress.1

The result on the national finance is unfortunate. A thoughtful American publicist remarks, "So long as the debit side of the national account is managed by one set of men, and the credit side by another set, both sets working separately and in secret without public responsibility, and without intervention on the part of the executive official who is nominally responsible; so long as these sets, being composed largely of new men every two years, give no attention to business except when Congress is in session, and thus spend in preparing plans the whole time which ought to be spent in public discussion of plans already matured, so that an immense budget is rushed through without discussion in a week or ten days-just so long the finances will go from bad to worse, no matter by what name you call the party in power. No other nation on earth attempts such a thing, or could attempt it without soon coming to grief, our salvation thus far consisting in an enormous income, with practically no drain for military expenditure.'

It may be replied to this criticism that the enormous income, added to the fact that the tariff is imposed for protection rather than for revenue, is not only the salvation of the United States Government under the present system, but also the cause of that system. Were the tariff framed with a view to revenue only,

1 "The noteworthy fact that even the most thorough debates in Congress fail to awaken any genuine or active interest in the minds of the people has had its most striking illustrations in the course of our financial legislation, for though the discussions which have taken place in Congress upon financial questions have been so frequent, so protracted, and so thorough, engrossing a large part of the time of the House on their every recurrence, they seem in almost every instance to have made scarcely any impression upon the public mind. The Coinage Act of 1873, by which silver was demonetized, had been before the country many years ere it reached adoption, having been time and again considered by committees of Congress, time and again printed and discussed in one shape or another, and having finally gained acceptance apparently by sheer persistence and importunity. The Resumption Act of 1875, too, had had a like career of repeated considerations by committees, repeated printings and a full discussion by Congress, and yet when the Bland Silver Bill of 1878 was on its way through the mills of legislation, some of the most prominent newspapers of the country declared with confidence that the Resumption Act had been passed inconsiderately and in haste; and several members of Congress had previously complained that the demonetization scheme of 1873 had been pushed surreptitiously through the courses of its passage, Congress having been tricked into accepting it, doing it scarcely knew what."-Woodrow Wilson, Congressional Government, p. 143.

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no higher taxes would be imposed than the public service required, and a better method of balancing the public accounts would follow. This is true. The present state of things is evidently exceptional. America is the only country in the world whose difficulty is not to raise money but to spend it.1 Still, as our critic remarks, Congress is contracting lax habits, and ought to change them.

Considering these faults, and considering that it is by preaching an adoption of British methods that the wisest American reformers are trying to cure the defects in the financial administration of Congress, it is odd that English publicists should at the same moment be suggesting the American system as a model for imitation by the House of Commons. The present British plan is probably open to the charge of not securing a full parliamentary control either of the expenses or of the administrative methods of the spending departments. But the arrangements of Congress seem, so far as an English observer can judge, less conducive to economy as well as to efficiency than those of Parliament.

How comes it, if all this be true, that the finances of America are so flourishing, and in particular that the war debt has been paid off with such regularity and speed that from $3,000,000,000 (£600,000,000) in 1865, it had sunk to less than $1,200,000,000 (£240,000,000) in 1887? Does not so brilliant a result speak of a continuously wise and skilful management of the national revenue?

The paying off of the debt seems to be due to the following

causes

To the prosperity of the country which, with one interval of trade depression, has for twenty years been developing its amazing natural resources so fast as to produce an amount of wealth which is not only greater, but more widely diffused through the population, than in any other part of the world.

To the spending habits of the people, who allow themselves

1 The Report of the Secretary of the Treasury for 1887 states the surplus in the treasury on 1st December of that year at $55,000,000, and estimates the surplus for the financial year ending 30th June 1888 under the law then in force at $140,000,000. For twenty-two years there have been surpluses, the smallest of $2,344,000 in 1874, the largest of $145,543,000 in 1882. The surplus taxation for the year ending 30th June 1888 was $113,000,000. The total estimated revenue of 1887-88 was $383,000,000. The receipts from customs alone were greater by $24,000,000 in 1887 than in 1886.

luxuries such as the masses enjoy in no other country, and therefore pay more than any other people in the way of indirect taxation. The fact that Federal revenue is raised by duties of customs and excise makes the people far less sensible of the pressure of taxation than they would be did they pay directly.

To the absence of the military and naval charges which press so heavily on European states.

To the maintenance of an exceedingly high tariff at the instance of numerous interested persons who have obtained the public ear and can influence Congress. Without expressing any opinion as to whether the policy of Protection be or be not sound, one may observe that to its acceptance, more perhaps than to any deliberate conviction that the debt ought to be paid off, has been due the continuance of a tariff whose huge and constant surpluses have enabled the debt to be reduced.

Europeans, admiring and envying the rapidity with which the war debt has been reduced, have been disposed to credit the Americans with brilliant financial skill. That, however, which was really admirable in the conduct of the American people was not their judgment in selecting particular methods for raising money, but their readiness to submit during and immediately after the war to unprecedentedly heavy taxation. The interests (real or supposed) of the manufacturing classes have caused the maintenance of the tariff then imposed; nature, by giving the people a spending power which has rendered the tariff marvellously productive, has done the rest.

Under the system of congressional finance here described America wastes millions annually. But her wealth is so great, her revenue so elastic, that she is not sensible of the loss. She has the glorious privilege of youth, the privilege of committing errors without suffering from their consequences.