that of Ways and Means, the responsibility for raising money; it delegates to nine other committees the more cheerful task of spending it. It makes no attempt to coördinate these two activities. For the fifty years succeeding the outbreak of the Civil War, indeed, Congress levied taxes, not primarily to find money for governmental expenditures, but to keep out foreign importations. Thus the Congressional system instructs its right hand to collect money and its left hand to spend it, and safeguards one hand from knowing what the other doeth. The Committee of Ways and Means is a careless father; the appropriation agencies are spendthrift children; the former laboriously gets together money which the latter irresponsibly spend. Naturally our balance sheet never balances. One year Congress raises more money than we need. The result is a huge surplus-which is only another word for unnecessary taxation. The next year we have a large deficit, and we have to borrow money to pay our bills.

GOVERNMENT WITHOUT RESPONSIBILITY

An investigation of our whole financial scheme betrays the one striking fact: nowhere is there a responsible agency supervising receipts and expenditures. I have called the Secretary of the Treasury's "letter" our nearest approach to a budget; in reality it has almost no resemblance to

In the preparation of these estimates, Mr. McAdoo is not a Finance Minister; he is merely a messenger boy. Any other member of the Cabinet, or the colored gentleman who sits outside his office door, could do this part of his work quite as well. Congress directs that the head of every department shall prepare his estimates for the succeeding year and send them to the Secretary at a stipulated time, who forwards them to the Speaker. The department heads in turn direct their bureau heads and sub-chiefs to prepare estimates for their particular activities. These documents are all dumped into the office of the Secretary, who forwards them to the Speaker precisely as he receives them. This disordered mass constitutes his "letter." He has no authority to change them. The President himself has no such au

thority-at least no authority that is effective. Therefore, we have no Finance Minister-no system of responsible government. A responsible government each year would determine what each department was to spend. It would decide these important facts after maturely considering the needs of the Nation and its existing resources. It would perhaps cut down the Army because the Navy had greater claims; it would reduce river and harbor expenditures because the Department of Agriculture had a more legitimate use for the money. It would then inform each department that it had so much money to spend and that it must keep its estimates within the limit. If the estimates exceeded the stipulated amount the pruning knife would be used. After determining these details this same responsible agency would seek ways of raising the cash. It would not overtax and so have a surplus; it would not undertax and so have a deficit; it would adjust its taxes, so far as human foresight could arrange, so that they would bring in the amount required. It would then introduce the result of its labors in the shape of a budget. If Congress did not like this result it could reject it. Congress, that is, would have the right which the President now has-of criticism and veto.

Instead, we now have, in the executive departments, hundreds of chief clerks, bureau heads, and secretaries, each one working in his own interest, each one preparing helter-skelter a mass, practically unsupervised and unedited, of so-called estimates of governmental expenditures. Each one of these thousands of units is working to get just as much money as he can. What they collectively conceive of as their requirements goes before Congress as the Secretary's "letter." Then nine committees, each one split into subcommittees and each unit revolving in an orbit of its own, take these "estimates," add new details of their own, and incorporate thousands of suggestions obtained from any number of wild sources outside, usually of the most selfish nature. After wrangling among themselves and the Senate appropriation committees, this disordered mass is usually rushed through Congress at the last hours of the session.

A few years ago Senator Nelson W. Aldrich, probably the greatest business man in the Senate, said that the Federal Government wasted $300,000,000 a year. The application of common-sense business methods to American finance, he added, would save $1,000,000 a day. The financial methods of Congress sufficiently explain this fearful waste. Until recent years the scandal has not particularly mattered, because our expenditures have been so comparatively small and our national wealth so enormous that waste in federal expenditures did not greatly inconvenience us. A man who has an income of a hundred dollars a day is likely not to worry much about carfare. Up to the Civil War federal expenditures did not exceed $74,000,000 a year. Now, however, we are spending more than nine times that amount. In 1885 the cost of the Government was $260,226,935; in 1913 it was $682,770,706; in 1885 our population was 56,148,000; in 1913 it was 97,028,497. In other words, population has increased only 73 per cent., while expenditures have increased 162 per cent. As a nation we are running the rake's progress, and, in the opinion of most competent observers, the time has come for a reform.

"A nation embodies its spirit and much of its history," said a French statesman, "in its financial laws. Let one of our budgets alone survive the next deluge, and it will plainly appear all that we are."

A slight acquaintance with American financial history emphasizes the truth of this statement. We were not always a wasteful nation; there were periods when frugality was an essential element of statesmanship. Congressmen to-day defend our system on the ground that it is "American," that budgets, coördination of receipts and expenditures, are only the products of outworn civilizations. In fact, the present system is not "American" in the sense that the fathers originated it. It is a comparatively recent growth-in its most outrageous aspects it is the product of the last thirty years. In the earlier years government and its expenditures were comparatively simple procedures. Washington at first had only five Cabinet

officers-the Secretaries of State, of the Treasury, and of War, the PostmasterGeneral, and the Attorney-General. These functionaries arranged our expenditures in simple fashion. The law creating the Secretary of the Treasury clearly provided that he should be a Minister of Finance, in the real sense of the term. It made it his duty "to prepare and report estimates of the public revenue and the public expenditures." That is, he was to prepare what was essentially a budget. Alexander Hamilton, the first Secretary of the Treasury, actually prepared such budgets.

After his retirement, however, Congressional jealousy gradually arrogated all control over appropriations. Congress, however, did not plunge immediately into the insane system that now prevails. It created, in the early part of the nineteenth century, a Committee of Ways and Means, whose functions were twofold and logical: in the first place, to make appropriations, in the second, to provide revenue. This committee, therefore, was practically a budget committee. It properly centred in the same hands control over both the raising and spending of money. The making of the budget is properly an administrative function; if Congress is to possess this power, however, this original scheme represents the only working plan. This committee also introduced all the appropriations in one bill as they are in England to-day. This was the era of small appropriations. For the first ten years, we spent only about $3,000,000 a year on the Federal Government. In 1845, despite the great growth of the country, we were spending only $27,000,000. From 1851 to 1861, federal expenditures averaged only $60,000,000. At the opening of the Civil War we had almost no national debt. Already, however, Congress had introduced one dangerous innovation. The Committee of Ways and Means still had jurisdiction over both expenditures and revenues, but it had begun appropriating money by several different bills. There was respectable reason why the different classes of expenditures should be split into several bills. The British House of Commons is now appropriating billions of dollars a

year in a single bill; until 1847 this was virtually the American system. In that year, however, the Committee of Ways and Means reported nine separate appropriation bills. What was the reason for the change? The history of the movement sufficiently answers this question. Before 1847 certain departments of the public service had their own. bills. In 1826 pensions were placed in a little pigeon hole all by themselves. In 1828 the first River and Harbor Bill passed Congress as a separate measure. These measures mean only one thing: the Pork Barrel. They were the greatest sources of Congressional patronage then as they are to-day. Placing these expenditures in separate bills enabled the friends of the soldiers and of public improvements to concentrate upon them. They were singled out as activities that deserved special consideration; in this way Congressmen could get more money for their constituents. This system, now grown into fifteen appropriation bills, was devised in the interest of extravagance and Congressional extortion.

By 1861, therefore, the procedure of the fathers had considerably broken down. Instead of acting as a body for revising departmental estimates, having the final say whether these should be granted, and thus absolutely controlling expenditures, Congress had centred in its own hands a complete despotism over money matters. But this Congressional system, compared with that which exists to-day, was financial idealism. One Congressional body, the Committee of Ways and Means, controlled the spending and raising of money. That is, it was something like a budget committee. But the Civil War enormously increased federal expenditures. In 1860 we spent about $63,000,000; in 1865 appropriations aggregated $1,300,000,000. Thaddeus

Stevens, a man of great native energy, but broken in health, was then chairman of Ways and Means. His position during four years of warfare and of unheard-of expenditures had broken him down. His colleagues, as a means of relief, now proposed to divide the functions of his committee. In the future Ways and Means should have merely jurisdiction over raising revenue; a new committee, to be

named the Committee on Appropriations, should supervise expenditures. One of the ironies of the proposal was that this reform was brought forward in the interest of economy! Samuel S. Cox-"Sunset” Cox-who introduced the new programme, advocated it on this ground.

"The burdens of Atlas," he said, "must be shifted to the broad shoulders of Hercules. . . . I need not dilate upon the importance of having hereafter one committee to investigate with nicest heed all matters connected with economy. We require of this new committee their whole labor in the restraint of extravagance and illegal appropriations."

Many shrewd Congressmen, however, perceived the absurdity of this idea. Mr. Stevens himself declared that the separation of the two functions would necessarily lead to greater extravagance. lead to greater extravagance. Morrill and Garfield opposed the change on the same However, the new resolution was

ground. adopted.

Bad as this innovation was, chaos had not yet been made complete. The new Committee on Appropriations was really what its name implied; this one committee, that is, prepared all the appropriation bills. In the late 'seventies several adventurous spirits conceived a new idea. This was to have several appropriating committees instead of one. The Appropriations Committee reported appropriations not in one bill, but in several; why not have a separate committee for each bill, or at least divide these measures among several committees? About 1879 this change was discussed in Congress. The greatest minds in both Houses denounced it vigorously. It would mean, they declared, the end of all economy. James A. Garfield, afterward Presidentone of the most brilliant public men of his generation-who had pointed out the mistake Congress was making in 1865, now directed all his influence in Congress, which was powerful, against this new attempt at disintegration.

"The scattering of appropriations, as here suggested," he said, "is an utterly ridiculous proposition. I believe it would cost this Government $20,000,000 a year if the appropriations were scattered to the

several committees. . It will be absolutely breaking down all economy and good order and good management of our finances. It cannot be otherwise."

Thomas B. Reed, of Maine, Congressman Keifer, of Ohio, and Senator Hawley, of Connecticut, denounced the plan. "It is a good way to get money out of the Treasury," said Senator Beck. Senator Sherman, perhaps the greatest financier who has ever sat in Congress since the time of Alexander Hamilton, Senator George F. Edmunds, perhaps its greatest constitutional lawyer, Senator George Frisbie Hoar, Senator Thomas F. Bayard, and Senator Dawes all protested. The proposed change, said Bayard, was not 'an error, but a legislative vice. The expenses of this Government will be enormously increased."

This opposition, splendidly led by Garfield and championed by this great array of statesmen, defeated the movement. But not for long. The arguments they raised against the change were precisely the motives that urged Congress to adopt it. It necessarily meant extravagance-and that was what Congressmen were itching for. They wanted to get their hands on the money bags; they wanted appropriations for their districts-big pensions, public buildings, river and harbor "improvements," army posts, navy yards, and other expenditures. The scattering of appropriations among several committees would facilitate this operation. And so their enthusiasm could not be stayed, and in 1885 they accomplished their purpose.

But the fight was a bitter one. A really heroic figure was that of Samuel J. Randall, the most brilliant Democrat in Congress. Besides serving as Speaker of the House twice, Randall had been for many years chairman of the Appropriations Committee. In this post he had made his great reputation. He was as great an enemy of the pork barrel then as Senator Burton has been in recent years. Almost unaided, he had reduced appropriations, in the Forty-fourth Congress, by $30,000,000 a year-this without decreasing official efficiency. He led the campaign for the election of Samuel J. Tilden with the issue of "Retrenchment

and Reform." When Cleveland came in as President in 1885 Randall again became chairman of this committee. Again his passion for economy and his fight against the pork-barrelists aroused the wildest antagonism. Unhappily, Randall's hostility to Cleveland's tariff policy he was a "protectionist Democrat"-had weakened his influence. Congressional attacks on his committee, therefore, made greater headway than they had before. In 1885, after a ten-years' war, the appropriation mongers succeeded in succeeded in their favorite scheme. Randall informed the country what the change meant, and never have prophecies received more complete fulfilment. The proposal, he said, was "without example in any legislative body in this country or in Europe. country or in Europe. It will be impossible to keep any just relation between expenditures and receipts, as such distribution tends to continually increasing appropriations. . . . The change will absolutely break down all economy and good order and good management of the finances. Who can tell what the end will be?"

For the fulfilment of these prophecies we need only consult the records of the Congresses of the last few years. For sixteen years Mr. John J. Fitzgerald has served on the Appropriation Committee; since his party gained the majority in 1911 he has been its chairman. He has the reputation of knowing more about the financial condition of the United States than any other man in public life.

"Whenever I think," he recently said in Congress, "of the horrible mess that I shall be called upon to present to the country on behalf of the Democratic Party I am tempted to quit my place. I am looking now at Democrats who seem to take amusement in soliciting votes on the floor of this House to overturn the Committee on Appropriations in its efforts to carry out the pledges of the Democratic platform. They seem to take it to be a huge joke not to obey their platform and to make ridiculous the efforts of the members of our party who do try to live up to the promises they have made to the people. .. Nothing will be more pressing in the future than the financial problem of the United States."

PRESIDENT WOODROW WILSON Probably the first American writer to picture the absurdities of American financial legislation. His book, "Congressional Government," published in 1885, advocated centralized responsible government. President Wilson advocates a federal budget for the appropriation of public moneys

Copyright by Harris & Ewing

EX-PRESIDENT WILLIAM H. TAFT

His attempt, as President, to establish a budget system was ridiculed and defeated by Congress. Congressman Fitzgerald, Democratic chairman of the Appropriations Committee, who did most to defeat the Taft idea, is now a champion of a budget system

of rule by Congressional committees. This book was a reasoned argument for responsible government, especially in financial legislation. "It cannot be reasonably regarded as a matter of surprise," he says, "that our financial policy has been without consistency or coherency, without progressive continuity. The only evidence of design to be discovered in it appears in those few elementary features which were impressed upon it in the first days of the Government, when Congress depended upon such men as Hamilton and Gallatin