Every revenue bill must, of course, come before the House; and the House, whatever else it may neglect, never neglects the discussion of taxation and money grants. These are discussed as fully as the pressure of work permits, and are often added to by the insertion of fresh items, which members interested in getting money voted for a particular purpose or locality suggest. These bills then go to the Senate, which forthwith refers them to its committees. The Senate Committee on Finance deals with revenue-raising bills; the Committee on Appropriations with supply bills. Both sets then come before the whole Senate. Although it cannot initiate appropriation bills, the Senate has long ago made good its claim to amend appropriations bills, and does so freely, adding items and often raising the total of the grants. When the bills go back to the House, the House usually rejects the amendments; the Senate adheres to them, and a conference committee is appointed, consisting of three senators and three members of the House, by which a compromise is settled, hastily and in secret, and accepted, generally in the last days of the session, by a hard-pressed but reluctant House. Even as enlarged by this committee, the supply voted is usually found inadequate, so a deficiency bill is introduced in the following session, including a second series of grants to the departments.
The European reader will ask how all this is or can be done by Congress without frequent communication from or to the executive government. There are such communications, for the ministers, anxious to secure appropriations adequate for their respective departments, talk to the chairmen and appear before the committees to give evidence as to departmental needs. But Congress does not look to them for guidance as in the early days it looked to Hamilton and Gallatin. If the House cuts down their estimates they turn to the Senate and beg it to restore the omitted items; if the Senate fail them, the only resource left is a deficiency bill in the next session. If one department is so starved as to be unable to do its work, while another obtains lavish grants which invite jobbery or waste, it is the committees, not the executive, whom the people ought to blame. If, by a system of logrolling, vast sums are wasted upon useless public works, no minister has any opportunity to interfere, any right to protest. A minister cannot, as in England, bring Congress to reason by a threat of resignation, for it would make no difference to Congress if the whole cabinet were to resign, unless of course the congressmen most conspicuously concerned should be so palpably in fault that the people could be roused to vigorous disapproval.
What has been here stated may be summarized as follows:
There is practically no connection between the policy of revenue raising and the policy of revenue spending, for these are left to different committees whose views may be opposed, and the majority in the House has no recognized leaders to remark the discrepancies or make one or other view prevail. In the Forty-ninth Congress a strong free trader was chairman of the tax-proposing Committee on Ways and Means, while a strong protectionist was chairman of the spending Committee on Appropriations.
There is no relation between the amount proposed to be spent in any one year, and the amount proposed to be raised. But for the fact that the high tariff produces a large annual surplus, a financial breakdown would speedily ensue.
The knowledge and experience of the permanent officials either as regards the productivity of taxes, and the incidental benefits or losses attending their collection, or as regards the nature of various kinds of expenditure and their comparative utility, can be turned to account only by interrogating these officials before the committees. Their views are not stated in the House by a parliamentary chief, nor tested in debate by arguments addressed to him which he must there and then answer.
Little check exists on the tendency of members to deplete the public treasury by securing grants for their friends or constituents, or by putting through financial jobs for which they are to receive some private consideration. If either the majority of the Committee on Appropriations or the House itself suspects a job, the grant proposed may be rejected. But it is the duty of no one in particular to scent out a job, and to defeat it by public exposure.
The nation is sometimes puzzled by a financial policy varying from year to year, and controlled by no responsible leaders, and it feels less interest than it ought in congressional discussions, nor has it confidence in Congress.7
The result on the national finance is unfortunate. A thoughtful American publicist remarks, “So long as the debit side of the national account is managed by one set of men, and the credit side by another set, both sets working separately and in secret without public responsibility, and without intervention on the part of the executive official who is nominally responsible; so long as these sets, being composed largely of new men every two years, give no attention to business except when Congress is in session, and thus spend in preparing plans the whole time which ought to be spent in public discussion of plans already matured, so that an immense budget is rushed through without discussion in a week or ten days—just so long the finances will go from bad to worse, no matter by what name you call the party in power. No other nation on earth attempts such a thing, or could attempt it without soon coming to grief, our salvation thus far consisting in an enormous income.”
It may be replied to this criticism that the enormous income, added to the fact that the tariff is imposed for protection rather than for revenue, is not only the salvation of the United States government under the present system, but also the cause of that system. Were the tariff framed with a view to revenue only, no higher taxes would be imposed than the public service required, and a better method of balancing the public accounts would follow. America is the only country in the world whose difficulty is not to raise money but to spend it.8 But it is equally true that Congress is contracting lax habits, and ought to change them.
How comes it, if all this be true, that the finances of America have been so flourishing, and in particular that the Civil War debt was paid off with such regularity and speed that the total public debt of $3,000,000,000 (£600,000,000) in 1865 had sunk in 1890 to $1,000,000,000 (£200,000,000)? Does not so brilliant a result speak of a continuously wise and skilful management of the national revenue?
The swift reduction of the debt seems to be due to the following causes:
To the prosperity of the country which, with one interval of trade depression, has for twenty-five years been developing its amazing natural resources so fast as to produce an amount of wealth which is not only greater, but more widely diffused through the population, than in any other part of the world.9
To the spending habits of the people, who allow themselves luxuries such as the masses enjoy in no other country, and therefore pay more than any other people in the way of indirect taxation. The fact that federal revenue is raised by duties of customs and excise makes the people far less sensible of the pressure of taxation than they would be did they pay directly.
To the absence, down till 1899, of the military and naval charges which press so heavily on European states.
To the maintenance of an exceedingly high tariff at the instance of interested persons who have obtained the public ear and can influence Congress. It was the acceptance of the policy of protection, rather than any deliberate conviction that the debt ought to be paid off, that caused the continuance of a tariff whose huge and constant surpluses have enabled the debt to be reduced.
Europeans, admiring and envying the rapidity with which the Civil War debt was reduced were in those years disposed to credit the Americans with brilliant financial skill. That, however, which was really admirable in the conduct of the American people was not their judgment in selecting particular methods for raising money, but their readiness to submit during and immediately after the war to unprecedentedly heavy taxation. The interests (real or supposed) of the manufacturing classes have caused the maintenance of the tariff then imposed; nature, by giving the people a spending power which rendered the tariff marvellously productive, did the rest.
Under the