It may, therefore, be accounted one of the customary advantages which our federal government possesses over the governments of the States, that it has almost always, in ordinary times, derived its entire revenue from prompt and facile indirect taxes, whilst the States have had to live upon the tardy and begrudged income derivable from a direct levy. Since we have had to support two governments it has been wisely resolved to let us, as long as possible, feel the weight of only one of them,—and that the one which can get at us most readily, and, at the same time, be most easily and promptly controlled by our votes. It is a plain, convenient, and, on the whole, satisfactory division of domain, though the responsibility which it throws on state legislatures is more apt to pinch and prove vexatious than is that which it lays upon Congress. Mr. Gladstone, the greatest of English financiers, once playfully described direct and indirect taxes as two sisters,—daughters of Necessity and Invention,—"differing only as sisters may differ, ... the one being more free and open, the other somewhat more shy, retiring, and insinuating;" and frankly owned that, whether from "a lax sense of moral obligation or not," he, as Chancellor of the Exchequer, "thought it not only allowable, but even an act of duty, to pay his addresses to them both." But our chancellors of the exchequer, the chairmen of the Committee of Ways and Means, are bound by other traditions of courtship, and have, besides, usually shown no susceptibility to the charms of the blunt and forward elder of these two sisters. They have been constant, even if now and again a little wayward, in their devotion to the younger.
I suppose that no one ever found the paths of finance less thorny and arduous than have our national publicists. If their tasks be compared with those of European and English financiers, it is plain to see that their lines have fallen in pleasant places. From almost the very first they have had boundless resources to draw upon, and they have certainly of late days had free leave to spend limitless revenues in what extravagances they pleased. It has come to be infinitely more trouble to spend our enormous national income than to collect it. The chief embarrassments have arisen, not from deficits, but from surpluses. It is very fortunate that such has been the case, because for the best management of the finances of a nation, when revenue is scant and economy imperative, it is absolutely necessary to have financial administration in the hands of a few highly-trained and skillful men acting subject to a very strict responsibility, and this is just what our committee system does not allow. As in other matters of legislation, so in finance, we have many masters acting under a very dim and inoperative accountability. Of course under such ministration our financial policy has always been unstable, and has often strayed very far from the paths of wisdom and providence; for even when revenue is superabundant and extravagance easy, irresponsible, fast and loose methods of taxation and expenditure must work infinite harm. The only difference is that during such times the nation is not so sensitive to the ill effects wrought by careless policy. Mismanagement is not generally blamed until a great many people have discovered it by being hurt by it. Meantime, however, it is none the less interesting and important to study our government, with a view to gauging its qualities and measuring accurately its capabilities for good or bad service; and the study can doubtless be much more dispassionately conducted before we have been seriously hurt by foolish, unsteady administration than afterwards. The forces of the wind can be reckoned with much more readily while they are blowing only a gale than after they have thrown a hurricane upon us.
The national income is controlled by one Committee of the House and one of the Senate; the expenditures of the government are regulated by fifteen Committees of the House and five of the Senate; and the currency is cared for by two Committees of the House and one of the Senate; by all of which it appears that the financial administration of the country is in the hands of twenty-four Committees of Congress,—a mechanism of numerous small and great functions, quite complex enough to be worth careful study, perhaps too complex to be studied directly without an aiding knowledge of some simpler system with which it may be compared. Our own budget may be more readily followed through all the vicissitudes of committee scrutiny, and all the varied fortunes of committee action, after one has traced some other budget through the simpler processes of some other system of government.
The British system is, perhaps, in its main features, the simplest in existence. It is, besides, the pattern after which the financial systems of the chief governments of Europe have been modeled, and which we have ourselves in a measure copied; so that by prefacing the study of other systems by a careful examination of the British, in its present form, one may start with the great advantage of knowing the characteristics of what may fairly be called the parent stock. Parliament, then, in the first place, simply controls, it does not originate, measures of financial administration. It acts through the agency and under the guidance of the ministers of the Crown. Early in each annual session "the estimates" are submitted to the Commons, which, when hearing such statements, sits in Committee of the Whole House, known as Committee of Supply. The estimates come before the House in truly formidable shape. Each department presents its estimates in a huge quarto volume, "crammed with figures and minute entries of moneys wanted for the forthcoming year."26 But the House itself does not have to digest this various and overwhelming mass of figures. The digesting is done in the first instance by the official leaders of the House. "The ministers in charge of the naval and military services lay before the Committee [of Supply] their respective statements of the sums which will be required for the maintenance of those services; and somewhat later in the session a common estimate for the various civil services is submitted also." Those statements are, as it were, condensed synopses of the details of the quartos, and are made with the object of rendering quite clear to the House, sitting under the informal rules of Committee, the policy of the expenditures proposed and the correctness of the calculations upon which they are based. Any member may ask what pertinent questions he pleases of the minister who is making the statement, so that nothing needing elucidation may be passed by without full explanation. After the statement has been completed to the satisfaction of the Committee, a vote is taken, at the motion of the minister, upon each item of expenditure, and the duties of the Committee of Supply have been performed.
The estimates are always submitted "on the collective responsibility of the whole cabinet." "The army and navy estimates have, as a rule, been considered and settled in cabinet council before being submitted to the House; and the collective responsibility of the Ministry is in this case, therefore, not technical merely, but substantial." If the estimates are resisted and rejected by the Committee, the ministers, of course, resign. They "cannot acquiesce in a refusal on the part of parliament to sanction the expenditure which" they "have assumed the responsibility of declaring necessary for the support of the civil government, and the maintenance of the public credit at home and abroad." The votes in Committee of Supply are, therefore, vital in the history of every administration, being taken as sure indexes of the amount of confidence placed by the House in the government.
But the votes in Committee of Supply are only the first steps in parliament's annual supervision of the public finances. They are simply the spending votes. In order to consider the means by which money is to be raised to meet the outlays sanctioned by the Committee of Supply, the House resolves itself into Committee of the Whole, under the name of the Committee of Ways and Means. It is to this Committee that the Chancellor of the Exchequer submits his budget every year, on or soon before the fifth of April, the date at which the national accounts are made up, the financial year closing on the thirty-first of March. In order to prepare his budget, the Chancellor must of course have early knowledge of the estimates made for the various services. Several months, therefore, before the estimates are laid before the House in Committee of Supply, the various departments are called upon by the Treasury to send in statements of the sums required to defray the expenses of the current year, and these estimates are carefully examined by the Chancellor, with a view not only to exercising his duty of keeping the expenditures within the limits of economy, but also to ascertaining how much revenue he will have to secure in order to meet the proper expenditure contemplated. He must balance estimated needs over against estimated resources, and advise the House in Committee of Ways and Means as to the measures by which taxation is to be made to afford sufficient revenue. Accordingly he calls in the aid of the permanent heads of the revenue departments who furnish him with "their estimates of the