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INTERNAL ORGANIZATION OF THE DEPARTMENT OF THE INTERIOR
INTERNAL ORGANIZATION OF THE DEPARTMENT OF JUSTICE
INTERNAL ORGANIZATION OF THE DEPARTMENT OF LABOR
INTERNAL ORGANIZATION OF THE NAVY DEPARTMENT

200-201

272

287

504-505

INTERNAL ORGANIZATION OF THE POST OFFICE DEPARTMENT

762

CYCLOPEDIA OF AMERICAN GOVERNMENT

VOLUME II

FINANCE, EUROPEAN SYSTEM OF

How Far National Systems are Similar.- | net national revenues partly because that gov Strictly, there is no European system of finance. Each country has its own system which is a joint-product of historical conditions and an evolving science of finance. Both influences, reenforced by conscious imitation of other nations, coöperate to bring about an essential similarity of main features in the several national systems. Like needs for public expenditures result from like constitutional limitations, and forms of political organization and social and political theories, and like industries, trade, forms of property and income provide substantially similar sources of public revenue. The science of finance, dealing with similar data and being itself a product of collaboration by scientists and administrators in all countries, also tends to create a uniformity of national systems.

Expenditures. The ordinary gross expenditures of leading European governments under main heads, according to Schwarz, were (in millions) in 1908:

ernment defrays armament costs from current revenues. Continental countries extensively meet them by enlarging the debt-placing loans to cover resulting deficits or to pay "extraordinary" costs of armaments. (2) Costs of debt service; which are current payments towards costs of past wars, covering deficits created by armament expenses, besides making public improvements and acquiring more or less productive enterprises-railways, telegraphs, telephones, tobacco and other factories. (3) Expenditures for education; improving public schools and educational facilities, pensioning retired teachers, enlarging the share of central government in these costs. (4) Promoting industries and commerce, including transport and communication facilities, a rapidly increasing item. (5) Social welfare; especially costs of public employment bureaus, old age pensions, workingmen's insurance. Even Great Britain, though tardily, has vigorously adopted these policies.

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Great Britain
Germany (Empire

17.5

3.2

Pound

58.2

17.4

29.5

26.0

151.8

and States)

Mark

3,267.3

142.8

1,162.1

317.8

735.5

1,749.1

7.376.6

France

Franc

304.0

233.4

1,203.6

271.2

973.4

886.0

3,871.6

Lira

167.1

150.2

400.6

76.9

Crown

998.7

238.3

499.1

151.7

592.7
710.1

325.7

1.713.2

838.3

3.436.2

Italy

Austria-Hungary

Expenditures for state enterprises-post, telegraph, government railways, domains and for fiscal monopolies-tobacco, matches, saltare gross payments, usually offset by greater receipts, and hence figures on the revenue side of net budgets.

Prominent among expenditures proper are the following: (1) cost of armaments; military and naval expenditures, including pensions, absorb almost half of Great Britain's

An expanding local government expenditure. varying from country to country, adds from 30 to 100 per cent to the fiscal burdens. They double certain items such as education and debt; provide purely local services, and reduce in aggregate the disproportion between armament expenditures and other expenditure groups. There is a tendency for the National Governments to limit and control local expenditures and debts and to assume a growing share in

ance.

FINANCE, LOCAL SYSTEMS OF

costs of general services such as education, prises-gas, water, light, tramways-and cethoroughfares, prisons, police, public assist- trois (France, Italy). The tendency is to separate sources of national and local revenues. assigning to central governments taxes based on ability to pay, and to local governments taxes on land, buildings, businesses, services

Revenues. The relative proportions of net national revenues drawn from main sources were, in 1908:

State enterprises Customs and taxes, net Other receipts

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55.4 14.1

91.0

84.1

5.4

9.8

82.4 6.6

93.3
1.3

Despite varying methods of classification it is clear that state enterprises yield a striking part of net revenues in Germany, and notable and increasing sums in other continental states, where the acquisition of the more lucrative railway lines proceeds. These revenues, how ever, have a tendency to decline in hard times, like customs duties.

Customs and taxes provide nine-tenths of the British and French, and four-fifths of the Italian and Austro-Hungarian net revenues. On a similar basis-including fees above placed under "other receipts"-Germany's proportion would be about three-fifths. British customs duties yield over one-fifth of national revenue, 95 per cent of this being from alcoholic liquors, tobacco and "colonial" products. The other governments derive approximately oneseventh of their national revenues from customs, chiefly from duties designed for agricultural and industrial protection. Internal taxes are drawn mainly from income and consumption taxes, which are developing as parts of the tax system with increasing emphasis on the former. Some striking tendencies of income taxation are: (1) differentiation of sources and imposing of higher rates on funded incomes; (2) accentuation of progressive rates on larger incomes, partly by exemption and abatement on smaller incomes, partly by directly progressive rates, also by a super-tax (Great Britain) and by a supplementary property tax (Prussia). The latest English and German legislation seeks special contributions from the "unearned, increment" in land. Inheritance taxes, rapidly progressive as to amount and kinship of successor, further accentuate those tendencies which result jointly from fiscal exigencies and practical recognition of faculty and social theories of taxation. Consumption taxes come chiefly from alcoholic drinks, tobacco, extensively from sugar and salt. registration and stamp duties, variously classified under taxes and other receipts, yield considerable sums.

Fees,

wherein values are directly affected by local improvements. The Miquel reforms in Prussia (1893-95) completely applied this principle. Besides attaining greater efficiency and equity in administration of revenues, they release the people from local consumption taxes and national revenues from local additions.

See APPROPRIATIONS, AMERICAN SYSTEM OF; COST OF GOVERNMENT IN THE UNITED STATES; DEBT, PUBLIC ADMINISTRATION OF; FINANCIAL POLICY OF THE UNITED STATES; PUBLIC ACCOUNTS; STATISTICS, OFFICIAL COLLECTION OF; TARIFF POLICY OF THE UNITED STATES; TAXATION, CONSTITUTIONAL BASIS OF.

References: C. F. Bastable, Public Finance (3d ed., 1903), I-V; H. C. Adams, Sci. of Finance (1898), Pt. I, Bk. I, Pt. II; C. C. Plehn, Introduction to Public Finance (3d ed., 1911), Pts. I-III; E. R. A. Seligman, Essays in Tazation (1897), ch. x, Income Tax (1911); J. W. Grice, National and Local Finance (1910); R. C. Brooks, "German Imperial Tax on Unearned Increment” in Quart. Jour. Econ., XXV (1911), 682-709; Schönberg's Handbuch der Politischen Oekonomie, III (4th ed., 1897–98); O. Schwarz, “Finanzen der Gegenwart" in Conrad, Handwörterbuch der Staatswissenschaften, IV (3d ed., 1909), 226-61; T. Eheberg, Finanzwissenschaft (11th ed., 1911); P. LeroyBeaulieu, Traité de la Science des Finances, I, II (8th ed., 1912). E. H. VICKERS.

FINANCE, LOCAL SYSTEMS OF. Types and Forms.-Heterogeneous systems of finance in the United States reflect with varying degrees of fidelity characteristics derived from the main types of local administration: viz., township, county, and mixed systems. Autonomous cities, to some extent towns and vil lages, represent a fourth distinct, but varying type. Under each local system, many school districts levy taxes and appropriate funds for school purposes, though actual fiscal administration is exercised by township or county officials. Enabling powers conferred by legislatures on each kind of local administration limit variously and closely the purposes of expenditure, amount of debt, sources and amount of taxes.

Local revenues present greater variety than national revenues, both between countries and between gradations in local government. They are chiefly derived from taxes on property, limited additions to national taxes, funds allo- New England. In New England towns, the cated by the central government from special town meetings (see) vote appropriations and revenues or for special services; especially from tax levies. Selectmen (see) or assessors (see) fees, licenses, earnings from municipal enter-value and assess real estate and personal prop

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