him, enlightenment in parliament to weigh and decide upon his plans.—PROFESSOR SEELEY.
When men are not acquainted with each other's principles, nor experienced in each other's talents, nor at all practiced in their mutual habitudes and dispositions by joint efforts of business; no personal confidence, no friendship, no common interest subsisting among them; it is evidently impossible that they can act a public part with uniformity, perseverance, or efficacy.—BURKE.
"It requires," says Mr. Bagehot, "a great deal of time to have opinions," and if one is to judge from the legislative experience of some very enlightened nations, it requires more time to have opinions about finance than about any other subject. At any rate, very few nations have found time to have correct opinions about it. Governments which never consult the governed are usually content with very shabby, short-sighted methods of taxation,—with any methods, indeed, which can be made to yield the desired revenues without much trouble; and the agents of a self-governing people are quite sure to be too busy with elections and party management to have leisure to improve much upon the practices of autocrats in regard to this important care of administration. And yet this subject of finance seems to be interesting enough in a way. It is one of the commonplaces of our history that, ever since long before we came westward across the ocean, we have been readier to fight about taxation than about any other one thing,—than about a good many other things put together, indeed. There are several sadly bloody spots in the financial history of our race. It could probably be shown, however, if one cared to take time to show it, that it is easy to get vexed about mismanagement of the finances without knowing how they might be better managed. What we do not like is that we are taxed,—not that we are stupidly taxed. We do not need to be political economists to get angry about it; and when we have gotten angry about it in the past our rulers have not troubled themselves to study political economy in order to find out the best means of appeasing us. Generally they have simply shifted the burden from the shoulders of those who complained, and were able to make things unpleasant, to the shoulders of those who might complain, but could not give much trouble.
Of course there are some taxes which are much more hateful than others, and have on that account to be laid more circumspectly. All direct taxes are heartily disliked by every one who has to pay them, and as heartily abused, except by those who have never owned an ounce or an inch of property, and have never seen a tax-bill. The heart of the ordinary citizen regards them with an inborn aversion. They are so straightforward and peremptory in their demands. They soften their exactions with not a grain of consideration. The tax-collector, consequently, is never esteemed a lovable man. His methods are too blunt, and his powers too obnoxious. He comes to us, not with a "please," but with a "must." His requisitions always leave our pockets lighter and our hearts heavier. We cannot, for the life of us, help thinking, as we fold up his receipt and put it away, that government is much too expensive a luxury as nowadays conducted, and that that receipt is incontestable documentary proof of unendurable extortion. What we do not realize is, that life would be robbed of one of its chief satisfactions if this occasion of grumbling were to be taken away.
Indirect taxes, on the other hand, offend scarcely anybody. It is one of the open secrets of finance that in almost every system of taxation the indirect overcrow the direct taxes by many millions, and have a knack for levying on the small resources of insignificant persons which direct taxes have never learned. They know how to coax pennies out of poor people whose names have never been on the tax-collector's books. But they are very sly, and have at command a thousand successful disguises. High or complicated tariffs afford them their most frequent and abundant opportunities. Most people have very short thoughts, which do not extend beyond the immediate phenomena of direct vision, and so do not recognize the hand of the government in the high prices charged them in the shops. Very few of us taste the tariff in our sugar; and I suppose that even very thoughtful topers do not perceive the license-tax in their whiskey. There is little wonder that financiers have always been nervous in dealing with direct, but confident and free of hand in laying indirect, taxes.
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,
