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FINANCE . The term " finance," which comes into English through French, in its original meaning denoted a payment (finatio). In the later middle ages, especially in Germany, it acquired the sense of usurious or oppressive dealing with money and capital . The specialized use of the word as equivalent to the management of the public expenditure and receipts first became prominent in France during the 16th century and quickly spread to other countries. The plural form (Les Finances) was particularly reserved for this application, while the singular came to denote business activity in respect to monetary dealings (as in the expression la haute finance). For the Germans the phrase " science of finance " (Finanzwissenschaft) refers exclusively to the economy
A work on " finance " may deal with the Money Market or the Stock Exchange; it may treat of banking and credit organization, or it may be devoted to state revenue and expenditure, which is on the whole the prevailing sense. The expressions " science of finance " and " public finance " have been suggested as suitable to delimit the last mentioned application. At all events, the broad sense is quite intelligible. " Financial " means what is concerned with business, and the idea of a balance between effort and return is also prominent. In the present article attention will be directed to " public finance "; for the other aspects of the subject reference may be made (inter alia) to the following:BANKS AND BANKING; COMPANY; EXCHANGE; MARKET; STOCK EXCHANGE. See also ENGLISH FINANCE, and the sections on finance under headings of countries. Finance, regarded as state house-keeping, or " political economy
347 penditure necessarily depends on the functions that the state undertakes to performnational defence, the maintenance of internal order, and the efficient equipment of the state organization; such are the tasks that all governments have to discharge, and for their cost due provision has to be made. The widening sphere of state activity, so marked a characteristic of modern civilization, involves outlay for what may be best described as " developmental " services. Education, relief of distress, regulation of labour and trade, are duties now in great part performed by public agencies, and their increasing prominence involves augmented expense. The first problem on this side of expenditure is the due balancing of outlay by income. The financier has to " cover " his outlay. There is, further, the duty of establishing a proper proportion between the several forms of expenditure. Not only has there to be a strict control over the total national expense; supervision has to be carried into each department of the state. No one branch of public activity is entitled to make unlimited calls on the state's revenue. The claims of the " expert "require to be carefully scrutinized. The great financiers have made their reputation quite as much by rigorous control over extravagance in expenditure as by dexterity in devising new forms of revenue. Unfortunately they have not been able to reduce their methods to rule. As yet no more definite principle has been discovered than the somewhat obvious one of measuring the proposed items of outlay (I) against each other, (2) against the sacrifice that additional taxation involves. Of almost equal importance is the rule that the utmost return is to be obtained for the given outlay. The canon of economy is as fundamental in regard to public expenditure as it will appear, later, to be in respect to revenue. Just application of the outlay of the state, so that no class receives undue advantage, and the use of public funds for " reproductive," in preference to " unproductive " objects, are evident general principles whose difficulty lies in their application to the circumstances of each particular case. Far greater progress has been made in the formulation of general canons as to the nature, growth and treatment of the public revenues. Historically, there is, first, the tendency towards increase in state income to balance the advance in outlay. A second general feature is the relative decline of the receipts from state property and industries in contrast to the expansion of taxation. Regarded as an organized system, the body of receipts has to be made conformable to certain general conditions. Thus there should be revenue sufficient to meet the public requirements. Otherwise the financial organization has failed in one of its essential purposes. In order continuously to attain this end, the revenue must be flexible, or, as is often said, elastic enough to vary in response to pressure. Frequently recurring deficits are, in themselves, a condemnation of the methods under which they are found. Again, the rule of " economy " in raising revenue, or, in other words, taking as little as possible from the contributors over and above what the state receives, holds good for the whole and for each part of public revenue. In like manner the principle of formal justice has the same claim in respect to revenue as to expenditure. No class of person should bear more than his or its proper share. In fact the special maxims usually placed under the head 9f taxation have really a wider scope as governing the whole financial system. The recognition of even the most elementary rules has been a very slow process, as the course of financial history abundantly proves. Until the 18th century no scientific treatment of financial problems was attained, though there had been great advances on the administrative side. A brief description of the historical evolution of the earlier financial forms will be the most effective illustration
The earliest forms of public revenue are those obtained from the property of the chief
348 further aid in the maintenance of the primitive state. Financial organization makes its earliest appearance in the great Eastern monarchies, in which tribute was regularly collected and the oldest and most general form of taxationthat levied on the produce of landwas established. In its normal shape this impost consisted in a given proportion of the yield, or of certain portions of the yield, of the soil; one-fourth as in India, one-fifth as in Egypt, or two separate levies of a tenth as in Palestine, are examples of what may from the last instance be called the " tithe " system. Dues of various kinds were gradually added to the land revenue, until, as in the later Egyptian monarchy, the forms of revenue reached a bewildering complexity. But no Eastern state advanced beyond the condition generally characterized as the " patrimonial," i.e. an organization on the model of the household. The part played by money economy was small, and it is noticeable that the revenues were collected by the monarch's servants, the farming out of taxes being completely unknown. Tribute, however, was paid by subject communities as a whole, and was collected by them for trans-mission to the conquerors. A much higher stage was reached in the financial methods of the Greek states, or more correctly speaking of Athens, the best-known specimen of the class. Instead of the comparatively simple expedients of the barbarian monarchies, as indicated above, the Athenian city state by degrees developed a rather complex revenue system. Some of the older forms are retained. The city owned public land which was let on lease and the rents were farmed out by auction. A specially valuable property of Athens was the possession of the silver mines at Laurium, which were worked on lease by slave labour. The produce, at first distributed amongst the citizens, was later a part of the state income, and forms the subject of some of the suggestions respecting the revenue in the treatise formerly ascribed to Xenophon. The reverence that attached to the precious metals caused undue exaltation of the services rendered by this property. One of the characteristics of the ancient state was its extensive control over the persons and property of its citizens. In respect to finance this authority was strikingly manifested in the burdens imposed on wealthy citizens by the requirements of the " liturgies " (Aetrovpyiat), which consisted in the provision of a chorus for theatrical performances, or defraying the expenses of the public games, or, finally, the equipment of a ship, " the trierarchy," which was economically and politically the most important. Athenian statesmanship in the time of Demosthenes was gravely exercised to make this form of contribution more effective. The grouping into classes and the privilege of exchanging property, granted to the contributor against any one whom he believed entitled to take his place, are marks of the defective economic and financial organization of the age. Amongst taxes strictly so called were the market dues or tolls, which in some cases approximated to excise duties, though in their actual mode of levy they were closely similar to the octrois of modern times. Of greater importance were the customs duties on imports and exports. These at the great period of Athenian history were only 2%. The prohibition of export of corn was an economic rather than a financial provision. In the treatment of her subject allies Athens was more rigorous, general import and export duties of 5% being imposed on their trade. The high cost of carriage, and the need of encouraging commerce in a community relying on external sources for its food supply, help to explain the comparatively low rates adopted. Neither as financial nor as protective expedients were the custom duties of classical societies of much importance. Direct taxation received much greater expansion. A special levy on the class of resident aliens (erotstov), probably paralleled by a duty on slaves, was in force. A far more important source of revenue was the general tax on property (eivr/sopt,), which according to one view existed as early as the time of Solon, who made it a part of his constitutional system. Modern inquiry, however, tends towards the conclusion that it was under the stress of the Peloponnesian War that this impost was intro-duced (428 B.C.). At first it was only levied at irregular intervals; afterwards, in 378 B.C., it became a permanent tax based on elaborate valuation under which the richer members paid on a larger quota of their capital ; in the case of the wealthiest class the taxable quota was taken as one-fifth, smaller fractions being adopted for those belonging to the other divisions. The assessment (rirba) included all the property of the contributor, whose accuracy in making full returns was safeguarded by the right given to other citizens to proceed against him for fraudulent under-valuation. A further support was provided in the reform of 378 B.C. by the establishment of the symmories, or groups of tax-paying citizens; the wealthier members of each group being responsible for the tax payments of all the members.The scanty and obscure references to finance, and to economic matters generally, in classical literature do not elucidate all the details of the system; but the analogies of other countries, e.g. the mode of levying the taille in 18th century France and the " tenth and fifteenth " in medieval England, make it tolerably plain that in the 4th century B.C. the Athenian state had developed a mode of taxation on property which raised those questions of just distribution and effective valuation that present themselves in the latest tax systems of the modern world. Taken together with the liturgies, the " eisphora " placed a very heavy burden on the wealthier citizens, and this financial pressure accounts in great part for the hostility of the rich towards the democratic constitution that facilitated the imposition of graduated taxation and super-taxesto use modern termson the larger incomes. The normal yield of the property tax is reported as 6o talents (14,400); but on special occasions it reached 200 talents (48,000), or about one- sixth
On the administrative side also remarkable advances were made by the entrusting of military expenditure to the " generals," and in the 4th century B.C. by the appointment of an administrator whose duty it was to distribute the revenue of the state under the directions of the assembly. The absence of settled public law and the influence of direct democracy made a complete ministry of finance impossible. The Athenian " hegemony " in its earlier and later phases had an important financial side. The confederacy of Delos made provision for the collection of a revenue (06por) from the members of the league, which was employed at first for defence against Persian aggression, but afterwards was at the disposal of Athens as the ruling state. The annual collection of 460 talents ( 110,400) shows sufficiently the magnitude of the league. Too little is known of the financial methods of the other Greek states and of the Macedonian kingdoms to allow of any definite account of their position. In the latter, particularly in Egypt, the methods of the earlier rulers probably survived. Their finance, like their social life generally, exhibited a blending of Hellenic and barbarian' elements. The older land-taxes were probably accompanied by import dues and taxes on property. In the infancy of the Roman republic its revenues were of the kind usual in such communities. The public land yielded receipts which may indifferently be regarded as rents Roman. or taxes; the citizens contributed their services or commodities, and dues were raised on certain articles coming to market. With the progress of the Roman dominion the financial organization grew in extent. In order to meet the cost of the early wars a special contribution from property (tributum ex censu) was levied at times of emergency, though it was in some cases regarded as an advance to be repaid when the occasion of expense was over. Owing to the great military successes, and the consequent increase of the other sources of revenue, it became feasible to suspend the tributum in 167 B.C., and it was not again levied till after the death of Julius Caesar. From this date the expenses of the Roman state " were undisguisedly supported by the taxation of the provinces." Neither the state monopolies nor the public land in Italy afforded any appreciable revenue. The other charges that affected Italy were the 5% duty on manumissions, and customs dues on sea-borne imports. But with the acquisition of the important provinces of Sicily, Spain and Africa, the formation of a tax Ancient Greek. system based on the tributes of the dependencies became possible. To a great extent the pre-existing forms of revenue were retained, but were gradually systematized. In legal theory the land of conquered communities passed into the ownership of the Roman state; in practice a revenue was obtained through land taxes in the form of either tithes (decumae) or money payments (stipendia). To the latter were adjoined capitation and trade taxes (the tributum capitis). For pasture land a special rent was paid. In some provinces (e.g. Sicily) payment in produce was preferred, as affording the supply needed for the free distribution of corn at Rome. The great form of indirect taxation consisted in the customs dues (portoria), which were collected at the provincial boundaries and varied in amount, though the maximum did not exceed 5%. Under the same head were included the town dues (or octrois). Further, the local administration was charged on the district concerned, and requisitions for the public service were frequently made on the provincial communities. Supplies of grain, ships and timber for military use were often demanded. The methods of levy may be regarded as an additional tax. Vexation," as Adam Smith remarks, " though not strictly speaking expense, is certainly equivalent to the expense at which every man would be willing to redeem himself from it "; and the Roman system was extraordinarily vexatious. From an early date the collection of the taxes had been farmed out to companies of contractors (societates vectigales), who became a by-word for rapacity. Being bound to pay a stated sum to the public authorities these publicani naturally aimed at extracting the largest possible amount from the unfortunate provincials, and, as they belonged to the Roman capitalist class, they were able to influence the provincial governors. Undue claims on the part of the tax collectors were aggravated by the extortion of the public officials. The defects of the financial organization were a serious influence in the complex of causes that brought about the fall of the Republic. One of the reasons that induced the subject populations to accept with pleasure the establishment of the Empire was the improvement in financial treatment that it secured. The corrupt and uneconomical method of farming out the collection of the revenue was, to a great extent, replaced by collection through the officials of the imperial household. The earlier Roman treasury (aerarium) was formally retained for the receipt of revenue from the senatorial provinces, but the officials were appointed by the Princeps and became gradually mere municipal officers. The real centre of finance was the fiscus or imperial treasury, which was under the exclusive control of the ruler (" res fiscales," says Ulpian, " quasi propriae et privatae principis stint "), and was administered by officials of his household. Under the Republic the Senate had been the financial authority, with the Censors as finance ministers and the Quaestors as secretaries of the treasury. Never very precise, this system in the 1st century B.C. fell into extreme decay. By means of his freedmen the emperor introduced the more rigorous economy of the Roman household into public finance. The census as a method of valuation was revived; the important and productive land taxes were placed on a more definite footing; while, above all, the substitution of direct collection by state officials for the letting out by auction of the tax-collection to the companies of publicani was made general. Thus some of the most valuable lessons as to the normal evolution of a system of finance are to be learned in this connexion. Of equal, or even greater moment is the failure of the administrative reforms of the Empire to secure lasting improvement, a result due to the absence of constitutional guarantees. The close relation between finance and general policy is most impressively illustrated in this failure of benevolent autocracy.Viewed broadly, the financial resources of the earlier Empire were obtained from (r) the public land alike of the state and the Princeps; (2) the monopolies, principally of minerals; (3) the land tax; (4) the customs; (5) the taxes on inheritances, on sales and on the purchase of slaves (vectigalia). One result of the establishment of the Priucipate was the consolidation ofthe public domain. The old " public land " in Italy had nearly disappeared; but the royal possessions in the conquered provinces and the private properties of the emperor became ultimately a part of the property of the Fiscus. Such land was let either on five-year leases or in perpetuity to coloni. Mines were also taken over for public use and worked by slaves or, in later times, by convict labour. The tendency towards state monopoly became more marked in the closing days of the Empire, the 4th and 5th centuries A.D. Perhaps the most comprehensive of the fiscal reforms of the Empire was the reconstruction of the land tax, based on a census or (to use the French term) cadastre, in which the area, the modes of cultivation and the estimated productiveness of each holding were stated, the average of ten preceding years being taken as the standard. After the reconstruction under Diocletian at the end of the 3rd century A.D., fifteen years (the indictio)though probably used as early as the time of Hadrianwas recognized as the period for revaluation. With the growing needs of the state this taxation became more rigorous and was one of the great grievances of the population, especially of the sections that were declining in status and passing into the condition of villenage. The portoria, or customs, received a better organization, though the varying rates for different provinces continued. By degrees the older maximum of 5% was exceeded, until in the 4th century 12i % was in some cases levied. Even at this higher rate the facilities for trade were greater than in medieval or (until the revolution in transport) modern times. In spite of certain prejudices against the import of luxuries and the export of gold, there is little indication of the influence of mercantilist or protectionist ideas. The nearest approach to excise was the duty of i % on all sales, a tax that in Gibbon's words " has ever been the occasion of clamour and discontent." The higher charge of 4% on the purchase of slaves, and the still heavier 5% on successions after death, were likewise established at the beginning of the Empire and specially applied to the full citizens. Escheats and lapsed legacies (caduca) were further miscellaneous sources of gain to the state. Taken as a whole, the financial system of Imperial Rome shows a very high elaboration in form. The patrimonium, the tributa and the vectigalia are divisions parallel to the domaine, the contributions directes and the contributions indirectes of modern French administration; or the English " non-tax " revenue, inland revenue and " customs and excise." The careful regulations given in the Codes and the Digest show the observance of technical conditions as to assessment and accounting. In substance and spirit, however, Romar finance was essentially backward. Without altogether accepting Merivale's judgment that " their principles of finance were to the last rude and unphilosophical," it may be granted that Roman states-men never seriously faced the questions of just distribution and maximum productiveness in the tax system. Still less did they perceive the connexion between these two aspects of finance' Mechanical uniformity and minute regulation are inadequate substitutes for observance of the canons of equality, certainty and economy in the operation of the tax system. Whether (as has been suggested) an Adam Smith in power could have saved the Empire is doubtful; but he would certainly have remodelled its finance. The most glaring fault was plainly the undue and increasing pressure on the productive classes. Each century saw heavier burdens imposed on the actual workers and on their employers, while expenditure was chiefly devoted to unproductive purposes. The distribution was also unfair as between the different territorial divisions. The capital and certain provincial towns were favoured at the expense of the provinces and the country districts. Again, the cost of collection, though less than under the farming-out system, was far too great. Some alleviation was indeed obtained by the apportionment of contributions amongst the districts liable, leaving to the community to decide as it thought best between its members. The allotment of the land-tax to units (juga) of equal value whatever might be the area, was a contrivance similar in character. 350 The gradual way in which the several provinces were brought under the general tax system, and the equally gradual extension of Roman citizenship, account further for the irregularity and increased weight of the taxes; as the absence of publicity and the growth of autocracy explain the sense of oppression and the hopelessness of resistance so vividly indicated in the literature of the later Empire. Exemptions at first granted to the citizens were removed, while the cost of local government which continually increased was placed on the middle-class of the towns as represented by the decuriones, or members of the municipalities. The fact that no ingenuity of modern research has been able to construct a real budget of expenditure and receipt for any part of the long centuries of the Empire is significant as to the secrecy that surrounded the finances, especially in the later period. For at the beginning of the principate Augustus
In addition to its value as illustrating the difficulties and defects that beset the development of a complex financial organization from the simpler forms of the city and the province, Roman finance is of special importance in consequence of its place as supplying a model or rather a guide for the administration of the states that arose on its ruins. The barbarian invaders, though they were accustomed to contributions to their chiefs and to the payment of commodities as tributes or as penalties, had no acquaintance with the working of a regular system of taxation. The more astute rulers utilized the machinery that they inherited from the Roman government. Under the Franks the land tax and the provincial customs continued as forms of revenue, while beside them the gifts and court fees of Teutonic origin took their place. Similar conditions appear in Theodoric's administration of Italy. The maintenance of Roman forms and terms is prominent in fiscal administration. But institutions that have lost their life and animating spirit can hardly be preserved for any length of time. All over western Europe the elaborate devices of the census and the stations for the collection of customs crumbled away; taxation as such disappeared, through the hostility of the clergy and the exemptions accorded to powerful subjects. This process of disintegration spread out over centuries. The efforts made from time to time by vigorous rulers to enforce the charges that remained legally due, proved quite ineffectual to restore the older fiscal system. The final result was a complete transformation of the ingredients of revenue. The character of the change may be best indicated as a substitution of private claims for public rights. Thus, the land-tax disappears in the 7th century and only comes into notice in the 9th century in the shape of private customary dues. The customs duties become the tolls and transit charges levied by local potentates on the diminishing trade of the earlier middle ages. This revolution is in accordance withindeed it is one side ofthe movement
Running through the different national systems there are some common elements the result not of inheritance merely but still more of necessity, or at the lowest of similarity in environment. Over and above the details of financial development there is a thread of connexion which requires treatment under Finance taken as a whole. As the great aim of this side of public activity is to secure funds for the maintenance of the state's life and working, the administration which operates for this end is the true nucleus of all national finance. The first sign of revival from the catastrophe of the invasions is the reorganization of the Imperial household under Charlemagne with the intention of establishing a more exact collection of revenue. The later German empire of Otto and the Frederics; the French Capetian monarchy and, in a somewhat different sphere, the medieval Italian and German cities show the same movement
illustration
standing
On the side of receipts a similar unifying process has been accomplished. The almost universal separation between " ordinary " and " extraordinary " receipts, taxation being put under the latter head, has completely ceased. It was, how-ever, the fundamental division for the early French writers on finance, and it survives for England as late as Blackstone's Commentaries. The idea that the ruler possessed a normal income in certain rents and dues of a quasi-private character, which on emergency he might supplement by calls on the revenues of his subjects, was a bequest of feudalism which gave way before the increasing power of the state. In order to meet the unified public wants, an equally unified public fund was requisite. The great economic changes which depreciated the value of the king's domain contributed towards the result. Only by well-adjusted taxation was it possible to meet the public necessities. In respect to taxation also there has been a like course of re-adjustment. Separate charges, assigned for distinct purposes, have been taken into the national exchequer and come to form a part of the general revenue. There has beentaking long periodsa steady absorption of special taxes into more general categories. The replacement of the four direct taxes by the income tax in France, as proposed in 1909, is a very recent
proper or of charges on accumulated wealth. The recent
In a third direction the co-ordination of finance has been just as remarkable. Financial adjustment implies the conception of a balance, and this should be found in the relation of outlay and income. Under the pressure of war and other emergencies it has been found impossible to maintain this desirable equilibrium. But the use of the system of credit, and the general establishment of constitutional government, have enabled the difficulty to be surmounted by the creation on a vast scale of national debts. Apart from the special problems that this system of borrowing raises, there is the general one of its aid in making national finance continuous and orderly. Deficits can be transferred to the capital account, and the country's resources employed most usefully by repaying liabilities contracted in times of extreme need. The growth of this department, parallel with the general progress of finance, is significant of its function. Finally, in all countries though with diversities due to national peculiarities, the modes of account and control have been brought into a more effective condition. Previous legislative sanction for both expenditure and receipts in all their particular forms is absolutely necessary; so is thorough scrutiny of the actual application of the funds provided. Either by administrative survey or by judicial examination care is taken to see that there has been no improper diversion from the designed purposes. It is only when the varied systems of financial organization are studied in their general bearing, and with regard to what may be called their frame-work, that their essential resemblance is thoroughly realized. Such a real underlying unity is the reason and justification for regarding " public finance " as a distinct subject of study and as an independent division of political science. Local Finance.One of the most remarkable features of modern financial development has been the growth of the complementary system of local finance, which in extent and complication bids to rival that of the central authority. Under the constraining power of the Roman Empire the older city states were reduced to the position of municipalities, and their financial administration became dependent on the control of the Emperor as is abundantly illustrated in the correspondence of Pliny and Trajan. After the fall of the Western Empire, a partial revival of city life, particularly in Italy and Germany, gave some scope for a return to the type of finance presented by the Athenian state. Florence affords an instructive specimen; but the passage from feudalism to the national state under the authority of monarchy made the cities and country districts parts of a larger whole. It is in this condition of subordination that the finance of localities has been framed and effectively organized. Though each great state has adopted its own methods, influenced by historical circumstances and by ideas of policy, there are general resemblances that furnish material for scientific treatment and allow of important generalizations being made. Amongst these the first to be noticed is the essential subordination of local finance. Alike in expenditure, in forms of receipt, and in methods of administration the central government has the right of directing and supervising the work of municipal and provincial agencies. The modes employed are various, but they all rest on the sovereignty of the state, whether exercised by the central officials or by the courts. A second characteristic is the predominance of the economic element in the several tasks that local administrations have to perform, and the consequenttendency to treat the charges of local finance as payments for services rendered, or, in the usual phrase, to apply the "benefits" principle, in contrast to that of " ability," which rightly prevails in national finance. Over a great part of municipal administration--particularly that engaged in supplying the needs of the individual citizensthe finance may be assimilated to that of the joint-stock company, with of course the necessary differences, viz. that the association is compulsory; and that dividends are paid, not in money, but in social advantage. The great expansion in recent years of what is known as Municipal Trading has brought this aspect of local finance into prominence. Water supply, transport and lighting have become public services, requiring careful financial management, and still retaining traces of their earlier private character. Corresponding to the mainly economic nature of local expenditure there is the further limitation imposed on the side of revenue. Unlike the state in this, localities are limited in respect to the amount and form of their taxation. Several distinct influences combine to produce this result. The needs of the central government lead to its retention of the more profitable modes of procuring revenue. No modern country can surrender the chief
The broad resemblance between the two parts of the entire system of public finance is seen in another direction. To national debts there has been added a great mass of municipal and local indebtedness, which seems likely to equal, or even exceed in magnitude the liabilities of the central governments. But here also the essential limitations of the newer form are easily perceptible. The sovereignty of the state enables it to deal as it thinks best with the public creditor. In its methods of borrowing, in its plans for repayment, or, in extremity, in its power of repudiation it is independent of external control. Local debt on the other hand can only be contracted under the sanction of the appropriate administrative organ of the state. The creditor has the right of claiming the aid of the law against the defaulting municipality; and the amounts, the terms, and the time of duration of local debt are supervised in order to prevent injustice to particular persons or improvidence with regard to the revenue and property of the local units. The chief reason for contracting local debt being the establishment of works that are, directly or indirectly, reproductive, the governing conditions are evidently to be found in the character and probable yield of those businesses. The principles of company investments are fully applicable: the creation of sinking-funds, the fixing the term of each loan to the time at which the return from its employment ceases, and the avoidance of the formation of fictitious capital, become guiding rules from this part of finance, and indicate the connexion with what the commercial world calls " financial operations." Finally, there is the same set of problems in respect to accounting and control in local as in central finance. Though the materials are simpler, the need for a well-prepared budget is existent in the case of the city, county or department, if there is to be clear and accurate financial management. Perhaps the greatest weakness of local finance lies in this direction. The public opinion that affects the national budget is unfortunately too often lacking in the most important towns, not excluding those in which political life is highly developed. End of Article: FINANCE If you wish, you can link directly to this article.
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