“It is difficult to discuss expenditures comprehensively without discussing also the revenues; but I shall on this occasion allude to the revenues only on a single point. Revenue and the expenditure of revenue form by far the most important element in the government of modern nations. Revenue is not, as some one has said, the friction of a government, but rather its motive power. Without it the machinery of a government can not move; and by it all the movements of a government are regulated. The expenditure of revenue forms the grand level from which all heights and depths of legislative action are measured. The increase and the diminution of the burdens of taxation depend alike upon their relation to this level of expenditures. That level once given, all other policies must conform to it and be determined by it. The expenditure of revenue and its distribution, therefore, form the best test of the health, the wisdom, and the virtue of a government. Is a government corrupt? that corruption will inevitably, sooner or later, show itself at the door of the treasury in demands for money. There is scarcely a conceivable form of corruption or public wrong that does not at last present itself at the cashier’s desk and demand money. The legislature, therefore, that stands at the cashier’s desk and watches with its Argus eyes the demands for payment over the counter, is most certain to see all the forms of public rascality. At that place, too, we may feel the Nation’s pulse; we may determine whether it is in the delirium of fever or whether the currents of its life are flowing with the steady throbbings of health. What could have torn down the gaudy fabric of the late government of France so effectually as the simple expedient of compiling and publishing a balance sheet of the expenditures of Napoleon’s government, as compared with the expenditures of the fifteen years which preceded his reign? A quiet student of finance exhibited the fact that during fifteen years of Napoleon’s reign the expenditures of his government had been increased by the enormous total of three hundred and fifty million dollars in gold per annum.
HOW SHALL EXPENDITURES BE GAUGED?
“Such, in my view, are the relations which the expenditures of the revenue sustain to the honor and safety of the nation. How, then, shall they be regulated? By what gauge shall we determine the amount of revenue that ought to be expended by a nation? This question is full of difficulty, and I can hope to do little more than offer a few suggestions in the direction of its solution.
“And, first, I remark that the mere amount of the appropriations is in itself no test. To say that this government is expending two hundred and ninety-two million dollars a year, may be to say that we are penurious and niggardly in our expenditures, and may be to say that we are lavish and prodigal. There must be some ground of relative judgment, some test by which we can determine whether expenditures are reasonable or exorbitant. It has occurred to me that two tests can be applied.