All reports of the Treasury department are referred to this Committee of Ways and Means, which also, like the Committee on Appropriations, from time to time holds other more direct communications with the officers of revenue bureaux. The annual reports of the Secretary of the Treasury are generally quite full of minute information upon the points most immediately connected with the proper duties of the Committee. They are explicit with regard to the collection and disbursement of the revenues, with regard to the condition of the public debt, and with regard to the operation of all laws governing the financial policy of the departments. They are, in one aspect, the great yearly balance sheets, exhibiting the receipts and expenditures of the government, its liabilities and its credits; and, in another aspect, general views of the state of industry and of the financial machinery of the country, summarizing the information compiled by the bureau of statistics with reference to the condition of the manufactures and of domestic trade, as well as with regard to the plight of the currency and of the national banks. They are, of course, quite distinct from the "Letters" of the Secretary of the Treasury, which contain the estimates, and go, not to the Committee of Ways and Means, but to the Committee on Appropriations.
Though the duties of the Committee of Ways and Means in supervising the management of the revenues of the country are quite closely analogous to those of the British Chancellor of the Exchequer, the lines of policy in which they walk are very widely separated from those which he feels bound to follow. As I have said, the object which he holds constantly in view is to keep the annual balances as nearly as possible at an equilibrium. He plans to raise only just enough revenue to satisfy the grants made in Committee of Supply, and leave a modest surplus to cover possible errors in the estimates and probable fluctuations in the returns from taxation. Our Committee of Ways and Means, on the other hand, follow a very different policy. The revenues which they control are raised for a double object. They represent not only the income of the government, but also a carefully erected commercial policy to which the income of the government has for many years been incidental. They are intended to foster the manufactures of the country as well as to defray the expenses of federal administration. Were the maintenance of the government and the support of the public credit the chief objects of our national policy of taxation, it would undoubtedly be cast in a very different pattern. During a greater part of the lifetime of the present government, the principal feature of that policy has been a complex system of duties on imports, troublesome and expensive of collection, but nevertheless yielding, together with the license taxes of the internal revenue which later years have seen added to it, immense surpluses which no extravagances of the spending committees could exhaust. Duties few, small, and comparatively inexpensive of collection would afford abundant revenues for the efficient conduct of the government, besides comporting much more evidently with economy in financial administration. Of course, if vast revenues pour in over the barriers of an exacting and exorbitant tariff, amply sufficient revenues would flow in through the easy conduits of moderate and simple duties. The object of our financial policy, however, has not been to equalize receipts and expenditures, but to foster the industries of the country. The Committee of Ways and Means, therefore, do not concern themselves directly with regulating the income of the government—they know that that, in every probable event, will be more than sufficient—but with protecting the interests of the manufacturers as affected by the regulation of the tariff. The resources of the government are made incidental to the industrial investments of private citizens.
This evidently constitutes a very capital difference between the functions of the Chancellor of the Exchequer and those of our Committee of Ways and Means. In the policy of the former the support of the government is everything; with the latter the care of the industries of the country is the beginning and the end of duty. In the eyes of parliament enormous balances represent ignorant or improper management on the part of the ministers, and a succession of them is sure to cast a cabinet from office, to the lasting disgrace of the Chancellor of the Exchequer; but to the mind of Congress vast surpluses are indicative of nothing in particular. They indicate of course abundant returns from the duties, but the chief concern is, not whether the duties are fruitful, but whether they render the trades prosperous. Commercial interests are the essential consideration; excess of income is a matter of comparative indifference. The points of view characteristic of the two systems are thus quite opposite: the Committee of Ways and Means subordinates its housekeeping duties to its much wider extra-governmental business; the Chancellor of the Exchequer subordinates everything to economical administration.
This is evidently the meaning of the easy sovereignty, in the practice of the House, of questions of supply over questions of revenue. It is imperative to grant money for the support of the government, but questions of revenue revision may be postponed without inconvenience. The two things do not necessarily go hand in hand, as they do in the Commons. The reports of the Committee of Ways and Means are matters of quite as high privilege as the reports of the Committee on Appropriations, but they by no means stand an equal chance of gaining the consideration of the House and reaching a passage. They have no inseparable connection with the annual grants; the needed supplies will be forthcoming without any readjustments of taxation to meet the anticipated demands, because the taxes are not laid in the first instance with reference to the expenses which are to be paid out of their proceeds. If it were the function of the Committee of Ways and Means, as it is of the Chancellor of the Exchequer, to adjust the revenue to the expenditures, their reports would be as essential a part of the business of each session as are the reports of the Committee on Appropriations; but their proposals, occupying, as they do, a very different place in legislation, may go to the wall just as the proposals of the other Committees do at the demand of the chairman of the great spending Committee. The figures of the annual grants do not run near enough to the sum of the annual receipts to make them at all dependent on bills which concern the latter.
It would seem that the supervision exercised by Congress over expenditures is more thorough than that which is exercised by the Commons in England. In 1814 the House created a Standing Committee on Public Expenditures whose duty it should be "to examine into the state of the several public departments, and particularly into laws making appropriations of money, and to report whether the moneys have been disbursed conformably with such laws; and also to report from time to time such provisions and arrangements as may be necessary to add to the economy of the departments and the accountability of their officers;" but this Committee stood as the only committee of audit for but two years. It was not then abolished, but its jurisdiction was divided amongst six other Committees on Expenditures in the several departments, to which was added in 1860 a seventh, and in 1874 an eighth. There is thus a separate Committee for the audit of the accounts of each of the executive departments, beside which the original single Committee on Public Expenditures stands charged with such duties as may have been left it in the general distribution.31 The duties of these eight Committees are specified with great minuteness in the rules. They are "to examine into the state of the accounts and expenditures respectively submitted to them, and to inquire and report particularly," whether the expenditures of the respective departments are warranted by law; "whether the claims from time to time satisfied and discharged by the respective departments are supported by sufficient vouchers, establishing their justness both as to their character and amount; whether such claims have been discharged out of funds appropriated therefor, and whether all moneys have been disbursed in conformity with appropriation laws; and whether any, or what, provisions are necessary to be adopted, to provide more perfectly for the proper application of the public moneys, and to secure the government from demands unjust in their character or extravagant in their amount." Besides exercising these functions of careful audit, they are, moreover, required to "report from time to time" any plans for retrenchment that may appear advisable in the interests of economy, or any measures that may be necessary to secure greater efficiency or to insure