purpose of the common defense and foreign intercourse. Russia and France as compared with the German Empire represent highly centralized countries, many of the functions performed by the several States of the latter being carried out by the central Government in the former. Again, in all the countries named, except Great Britain and the United States, the military and naval expenditure represents a peace footing.
Another obstacle to a simple comparison of national budgets lies in the varying extent to which the nations concerned undertake industrial functions. The inclusion of the postal expenditures adds 116.6 million dollars to the aggregate for the United States in 1901. In the States above compared, except Austria-Hungary, postal expenditures are included, to which the cost of operating the telegraph system is added, excepting the United States. Moreover, the French national budget is charged with the expenses of operating the tobacco, matches, and gunpowder industries, together with the expenditures due to the management of the State forests and domains and the rather limited system of State railways.
The Russian budget bears the costs of operation of the alcohol and tobacco monopolies, of the railroad system, and of the State domains, which swell the aggregate expenditures of the ministries of Finance, Agriculture, and of Ways and Communication to 645,000,000 rubles. A more common illustration is offered by Prussia, where in an aggregate ordinary expenditure, by estimates of 1902, of 2431 million marks, the cost of operating domains, mines, and railways is given as 1080 million marks, a sum which is more than offset by receipts from operation, but which swells the budget in comparison with States with less varied industrial functions.
Local Expenditures. It has already been pointed out that local expenditures grow more rapidly than national expenditures, and a few figures indicative of the extent and nature of such local expenditures may be adduced. Rather than single out particular localities, it is better to have resort to the figures furnished by the census of 1890, as no general compilation of later date is available. It appeared that the expenditures for all purposes by all grades of government in 1890 were as follows:
| National Government, incl. postal service | $352,218,614 |
| States and Territories and District of Columbia, except for public schools | 77,105,911 |
| Counties, except for public schools | 114,575,401 |
| Municipalities, except for public schools | 232,988,592 |
| Public common schools | 139,065,737 |
| Total | $915,054,255 |
The expenditure for schools is distributed among the States, counties, and municipalities. The character of expenditure of the National Government having been already noted, we may cite from the census the following statement for local expenditure:
| Legislative | $3,987,774 |
| Executive | 5,476,940 |
| Judicial | 18,721,383 |
| Military | 2,692,211 |
| Education | 145,583,115 |
| Charities | 39,958,816 |
| Interest | 46,649,136 |
| Penal and reformatory | 12,381,423 |
| Buildings, including care and maintenance | 17,950,177 |
| Water-works and other enterprises | 5,517,193 |
| Salaries (separately reported) | 37,552,655 |
| Roads, runs, ditches, and bridges | 72,262,023 |
| New buildings (separately reported) | $34,513,020 |
| Police | 23,934,376 |
| Public parks and places | 2,962,697 |
| Fire | 16,423,820 |
| Health | 3,280,294 |
| Lighting | 11,363,780 |
| Miscellaneous | 68,041,796 |
| Total | $569,252,629 |
Public Revenue. The revenues of the State are chiefly derived from taxation, but this is not the exclusive source of income. Omitting minor or casual sources of income, such as fines and gifts, the State derives a revenue from the management of its own property, from its industrial activities, and from other services which it renders to the community. Nomenclature is by no means fixed, but we may designate the sources of income as prices, charges, fees, and taxes.
(1) Prices.—Under the head of prices we may include the revenue arising from the sale of public property, such as land or its products. By price we mean a return fixed in the main by private competition. Such a return can be obtained when there is no monopoly of the property to be sold. Whether or not such shall be the aim of the State depends largely upon questions of public policy. As an owner of property the State is trustee for the people, and a wise policy may, in some eases, dictate the neglect of commercial interests, while in other cases it may require that they be strictly adhered to. Wherever the State has possessed large domains fitted for agricultural uses, as in the public lands of the United States and of Australia, such lands have been used rather to promote national development than to insure public revenue. Products incidental to the functions of government, such as the lumber from State forests or goods produced in penal establishments, must, if brought into the market, be sold at market prices, lest the State should injure its own citizens. The revenues from these sources are but a small portion of the income of modern States.
(2) Charges.—Charges may serve as a general term for the amounts paid for specific industrial services which the State performs. These include the operations of the post-office, the telegraph, the telephone, the railroad, municipal gas and electric plants, and the sale of certain products such as liquors, tobacco, matches, etc. The range of industrial activity represented, though, of course, not equally extensive in the various modern States, is varied and comprehensive. In all there is a common feature, public monopoly, which makes the term charges for public service more appropriate than prices. The determination of the charge rests upon the motives which lead the State to enter upon a specific kind of industrial activity. That motive is seldom to obtain the largest possible revenue from the enterprise, although this characterizes fiscal monopolies, such as tobacco and match monopolies, which are frequent upon the Continent of Europe. The liquor monopoly as it exists in Switzerland is not wholly fiscal in its purpose, as it seeks to eliminate some of the abuses which grow out of the private production of spirituous liquors. Far more obvious are the social interests involved in the Government management of gas and electric-lighting plants, railroads, telephones, telegraphs, and the postal service. In
