wished to confine such taxation to luxuries; some preferred a single tax upon land or a tax upon houses, while others argued for a general property tax or a combination of different kinds of taxes. Out of such discussions of particular topics a large body of financial literature had developed in England by the middle of the eighteenth century. Yet little of the writing had been systematic, and nothing like a comprehensive treatise upon finance had come into existence.

In France, after the time of Bodin, comparatively little attention was given to the study of finance until disorders and abuses in the public housekeeping had become so grave as to call loudly for reform. Early in the eighteenth century Marshal Vauban, who in the course of his campaigns had observed the wretched condition of many parts of the country, proposed reforms in taxation, by which a tax upon all incomes, supplemented by various duties upon imports and articles of consumption, should replace existing taxes. In 1748 appeared Montesquieu's celebrated Esprit des lois, which treats of both taxation and public debts, briefly, but in a manner which influenced not a little the subsequent course of thought. Montesquieu emphasized particularly the political relations of public finance, observing, for instance, that a free people will submit to heavier taxation than a despotic ruler can impose upon. his subjects; and took a very unfavorable view of public debts. Ten years later Quesnay, the founder of the Physiocratic School, published his Tableau oeconomique, in which he developed the first consistent theory of the production and distribution of wealth, and correlated the theory of taxation with the fundamental doctrines of his new science. Holding that the net produce of the land is the only source from which the wealth of a society can be increased and the only fund from which taxes. can be drawn, the Physiocrats argued that all other taxes should be abandoned and public revenue raised by a single tax upon. the "produit net" of the soil.2 Beyond urging that govern

1 Of this copious literature David Hume's essays on “Taxes” and “ Public Credit ” (1752) may be mentioned; also Sir James Steuart's Inquiry into the Principles of Political Economy (1767), which, besides considering the subject of public credit, devotes an entire book to taxes.

2 Quesnay, in the Tableau oeconomique, showed that it followed from his theory of

ments should confine their activity to the narrowest possible limits, and, therefore, exercise economy in their expenditures, the Physiocrats contributed nothing further to the history of public finance.

A new era opened with the publication of Adam Smith's Wealth of Nations (1776). Drawing upon the work of his predecessors and the results of his own observations and ripe reflection, Smith skillfully developed a body of doctrine which in finance, as in other departments of economic study, served as the foundation of most subsequent inquiry. Believing that one of the two objects of political economy is "to supply the state or commonwealth with a revenue sufficient for the public services," he devoted the fifth book of the Wealth of Nations to the "Revenue of the Sovereign or Commonwealth," and treated, in order, public expenditures, public revenues, and public debts.1 Translated into one language after another, the Wealth of Nations exercised a profound influence upon economic thought in the leading countries of Europe; while it came, before long, to dominate the thought of Great Britain, and was extensively read in the United States. With many topics treated in the following chapters it will be necessary for us to begin by considering the doctrines of Adam Smith.

3. The Nineteenth Century. In Great Britain after the time of Smith the systematic study of public finance seemed to languish. Writers of economic treatises continued to discuss. taxation and public debts; but showed a tendency to confine themselves to questions of more or less abstract theory, and often relegated the subjects to a decidedly subordinate position.2

the "produit net" that taxation "should be placed immediately upon the revenue of the landed proprietor, and not upon commodities where it would multiply the cost of collection and injure commerce."

1 The three chapters, or main divisions, of the fifth book recall clearly the three divisions of Bodin's chapter, viz. "honest means of raising revenues," methods of employing them, and reserving treasure for times of need. Smith placed expenditure first, as Petty had done, instead of second, as Bodin had preferred to do.

2 James Mill (1821) treated of taxation while considering the consumption of wealth. John Stuart Mill (1848) discussed somewhat briefly taxation and national debts. Ricardo, on the other hand, entitled his most important work, Principles of Political Economy and Taxation (1817), and made important contributions to the theory of shifting and incidence.

Yet not a few important pamphlets or treatises were written upon special topics of immediate practical interest; and, in 1845 McCulloch published his Treatise on Taxation and the Funding System, which, as the title indicates, deals systematically with two out of the three divisions of public finance recognized in the Wealth of Nations. Not until 1892 did the first real treatise upon finance appear in Great Britain; and this work still holds exclusive possession of the field,2 although there has been an increased output of literature dealing with special parts of the science, particularly with taxation.3

In France during the nineteenth century financial studies followed practically the same course as in Great Britain. General treatises upon economics relegated financial topics to a subordinate position, while there was a considerable output of meritorious works upon financial history and administration or other special subjects. In 1862 Joseph Garnier brought out an unsatisfactory treatise upon public finance, and somewhat later Paul Leroy-Beaulieu produced a decidedly superior manual which still ranks with the leading works upon our science.7 France, too, has given us a very useful Dictionnaire des finances, edited by Léon Say, who, as student, administrator, and publicist, was one of the prominent features in French finance during the last quarter of the nineteenth century.

In Germany the study of finance had developed so far during the eighteenth century that the production of systematic treatises proceeded apace during the nineteenth. The first important development was the modification of many of the received cam

1 One of the most noteworthy was Robert Hamilton's Inquiry concerning the Management of the National Debt (1813).

2 C. F. Bastable, Public Finance (third edition, 1903). R. H. Patterson's Science of Finance (1868) is not a treatise upon public finance.

8 It should be observed that the fifth book of Professor Nicholson's extensive treatise, Principles of Political Economy (1893-1901), devotes not less than fourteen out of its twenty chapters to public expenditures, taxation, and public debts.

4 J. B. Say (1803), for instance, treated expenditures, revenues, and public debts under the head of the consumption of wealth.

5 Especially worthy of mention is René Stourm's Le budget (fourth edition, 1900). Traité des finances (fourth edition, 1883).

7 Traité de la science des finances (sixth edition, 1899). Mention should be made, also, of the useful work by Jèze and Boucard, Éléments de la science des finances et de la législation financière française (second edition, 1901).

eralistic doctrines under the influence of the teachings of Adam Smith. This work was practically accomplished by 1832, when K. H. Rau published the first part of his Grundsätze der Finanzwissenschaft, which for several decades remained the leading manual for university students and aspirants for administrative posts. After the middle of the century the influence of Smith began to decline, but not until his doctrines had left a permanent impress upon German financial science. Of the modern treatises the chief is Adolph Wagner's Finanzwissenschaft (1877-), which is still uncompleted, although four portly volumes have appeared. Of the shorter works, those by Roscher (fourth edition, 1894), Cohn (1889), and Eheberg (seventh edition, 1903) should be mentioned; 2 while we should not overlook the third volume of Schönberg's Handbuch der politische Oekonomie (fourth edition, 1896-98), which contains a valuable collection of monographs upon the various parts of public finance. Most of the German writers have studied with care existing financial institutions and their history, and public finance has received a noteworthy impetus from their labors.

While financial problems have demanded and received no little attention in the United States ever since the establishment of our national government, systematic study of public finance has been a comparatively recent development. In state papers or the writings of public men who have had to deal with questions of finance, a considerable body of literature has always existed, but in wholly unsystematic form. Our earliest textbooks on economics accorded financial topics the same cursory treatment which they received at the hands of contemporary English or French writers. During the last forty years federal or state commissions appointed to consider urgent problems have published more or less elaborate reports upon taxation

1 This, according to what has become the traditional German method, formed the third volume of Rau's Lehrbuch der politischen Oekonomie.

2 The volumes by Roscher and Cohn are parts of larger treatises upon economics. Cohn's Finanzwissenschaft has been translated (Chicago, 1895). Eheberg's work is perhaps the most convenient for the student.

3 Hamilton's Report on Public Credit (1790); Walcott's Report on Direct Taxes (1796); Gallatin's Sketch of the Finances of the United States (1796). For a much later period, may be mentioned John Sherman's Speeches and Reports on Finance and Taxation (1879).

and some other subjects, of which a few have been of high merit. More recently there has been a gratifying increase of interest in finance,2 as in other departments of economic investigation, which has given us a considerable number of special studies upon taxation,3 public debts, the financial history of our own country, and various other subjects; as well as three general treatises upon public finance.7

1 The New York Commission of 1871 and 1872, the Maryland Commission of 1886, and the Massachusetts Commission of 1897 are examples of the reports dealing with taxation. The federal revenue system was searchingly investigated after the Civil War by Mr. David A. Wells, who, as commissioner of revenue, issued several reports.

2 Of this perhaps the first signs were the numerous articles upon financial topics in Lalor's Cyclopædia of Political Science (1883-84) and the translation of Cossa's Scienza delle finanze, under the misleading title, however, of Taxation, its Principles and Methods (1888).

Ely, Taxation in American States and Cities (1888); Seligman, Essays in Taxation (1895), The Shifting and Incidence of Taxation (second edition, 1899), Progressive Taxation (1894); Howe, Taxation in the United States under the Internal Revenue System (1896); Wells, Theory and Practice of Taxation (1900). 4 Adams, Public Debts (1887); Ross, Sinking Funds (1892); Scott, The Repudiation of State Debts (1893).

5 Works upon special parts of the field are too numerous to mention here. Of general works there are two: Bolles, Financial History of the United States (1879-1886); and Dewey, Financial History of the United States (1902).

Urdahl, The Fee System in the United States (1898); Kinley, The Independent Treasury of the United States (1893); Clow, Administration of City Finances in the United States (1901).

7 Adams, The Science of Finance (1898); Daniels, Elements of Public Finance (1899); Plehn, Introduction to Public Finance (second edition, 1900).