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been for the growth of pension disbursements by the sum of $77,649,000, and our judgment concerning the propriety of the growth of federal expenditures during the eleven years in question will depend upon the views we entertain concerning pension legislation. It is idle to talk about the government's "keeping pace with environment, making improvements as the wealth of the country warranted, providing for great educational work," etc.; for all such outlays, with the cost of the new navy thrown in, would not have increased the country's per capita expenses for 1897 over those for the year 1886. It is not the purpose of this paper to enter upon an extended discussion of pension legislation, but two things should be said in this connection. speech delivered in Congress on January 23, 1872, at a time when the pension roll called for an expenditure of only $28,533,000, General Garfield said: "We may reasonably expect that the expenditures for pensions will hereafter steadily decrease, unless our legislation should be unwarrantably extravagant." In 1886 the outlay was over twice as large as when these words were uttered, and it is evident that, unless General Garfield's calculations contained an error of over one hundred per cent, the growth of pension disbursements in recent years has been both extravagant and unwarranted. This conclusion will be strengthened if one notes that the legislation which brought about such a result was passed at a time when the federal treasury was groaning under an unprecedented accumulation of surplus revenue that was a direct incentive to extravagant appropriations. How probable is it that Congress would have passed the law of 1890 if it had been necessary to levy new taxes in order to provide ways and means? In any event it is useless to try to conceal the fact that pension expenditure was the cause of the increased per capita outlay in 1897.

We may now examine the second table, which shows the movement of federal expenditures from 1897 to 1902:

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(Dec.) 2,565,000 (Dec.) 8,683,000 (Inc.) 95,302,000 (Inc.) 21,366,000

It will be observed that the outlay for pensions and interest decreased by $11,248,000, while that for all civil purposes rose to the extent of $21,366,000, a net increase of $10,118,000 for the three items. It is evident, therefore, that, if the cost of the army and navy had remained at the figures for the last year before the Spanish War, the aggregate expenditures of the United States would have increased from $365,774,000 to not more than $375,892,000 between 1897 and 1902. This would have given us a per capita outlay of $4.75 in the latter year as compared with $5.11 in the former. That the total expenditures were $471,190,000 is due solely to the growth of the outlay for military purposes. At present our army and navy are costing the country $95,302,000 more than before the recent war, and entail an additional outlay of $1.21 for every person in the country. For 1903 the prospect is that there will be a further increase of these expenditures.

It has long been the boast of Americans that this country has been relatively free from the heavy exactions that militarism has made upon the people of other lands. In 1889 the per capita cost of maintaining land and naval armaments was found to stand as follows in the leading nations of Europe: 1

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European conditions have not improved during the last decade, so that the people of this country still have some reason for satisfaction over their more fortunate situation. And, when the indirect loss occasioned by the withdrawal of labor from productive industry is taken into account, the comparison results still more favorably for the United States. Yet we have less reason for satisfaction than we had a decade ago, as will appear from the following statistics, which show the cost of maintaining our army and navy in recent years: 2

1 Schönberg, Handbuch der Politischen Oekonomie (third edition), III, 49.

2 Here, again, expenditures for improving rivers and harbors are deducted from the amounts charged to the War Department.

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The facts just presented are designed solely to furnish materials for a comparison of the outlays upon actual military armaments in this and in other countries. They convey no idea, however, of what war has cost and is costing the United States. For this purpose it is necessary to add to the expenditures upon the army and navy the burden entailed by the disbursements for interest1 and pensions. Even then the figures which are now to be presented will not disclose the whole truth, since we have excluded throughout the important item of payments on the principal of the national debt.

Turning then to the aggregate running expenses chargeable to the account of war, the following statistics are presented:

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And if now the total outlay for such purposes is compared with the entire amount of the federal expenditures, the result will be as follows:

It should be remarked that, in 1894 and 1895, $262,000,000 of bonds were issued in order to maintain the gold reserve. Interest on this portion of the debt should properly be excluded from our figures, but the recent refunding operations make this an impossible task. But any error at this point is partly counterbalanced by the fact that we have not included in the military expenditures a sum, varying from $2,000,000 to $3,000,000, expended annually for maintaining the War and Navy Departments at Washington, which the Finance Reports group with the civil expenditures.

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Thus it appears that our federal government is, on its financial side, mainly a huge machine for collecting taxes in order to defray the direct and indirect cost of war; so that the people of the United States should not congratulate themselves unduly upon their immunity from the burden which war entails.

As a matter of fact, it will probably startle the average reader to learn how little the federal government would cost were it not for war and its consequences. From the beginning of our national existence down to the present day the aggregate civil expenses of the United States have been comparatively small. This fact can be most readily shown by the following table, which gives the per capita charges first for civil expenditures and second for all purposes:

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In these figures even the most warlike may find food for reflection. Our national government in 1902 was imposing upon taxpayers a burden that averaged $29.80 for every family of five persons. Of this sum, only $8.75 was needed for all civil expenditures, while $21.05 must be charged to the account of war.1

1 The article then proceeds to consider the claim that, even if expenditures have increased, the increase has not been as rapid as the growth of wealth. It finds that from 1890 to 1900 both the total and the per capita expenditures increased faster than wealth.

CHAPTER IV

PUBLIC REVENUES: THE VIEWS OF BODIN AND SMITH

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11. Bodin's Classification of Revenues. In 1576 Jean Bodin, in the most extensive survey which had then been made of the subject, classified public revenues in the following manner:

Now there are in general seven ways of raising public revenues,1 which include all that can be thought of. The first is the landed domain of the commonwealth; the second, conquests from enemies; the third, gifts from friends; the fourth, tributes from subject states; the fifth, public traffic or trading; the sixth, customs duties upon merchants who bring in or carry out merchandize; and the seventh, taxes upon the citizens.2

Of these seven branches of revenue Bodin pronounced the first "the most just and certain of all." He contended stoutly that "in order that princes might not be obliged to lay taxes upon their subjects, or invent methods of seizing upon private property, all states and rulers have held it to be an indubitable general principle that the public domains should be holy, sacred, and inalienable, either by grant or by prescription." Moreover, he said, "it is not lawful for princes, even in time of peace, to squander the fruits and revenues of the domains; because they are entitled only to the usufruct of the domains, and ought, after providing for public needs and their own private expenses, to keep the surplus income for times of public necessity." Then, too, he believed that domains, when sold, usually brought less than their true value; and that, most important of all, the money

1 For public revenues Bodin wrote fonds aux finances.

2 Les six livres de la république, VI, 2.

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