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done with any chance of tolerable success, any country which thinks of attempting it must provide itself with a fairly efficient administrative service. In view of contem- porary conditions, two duties are incumbent upon the economist. One is the anticipa- tion and formulation, by an effort of the economic imagination, of the sort of problems which are likely to arise in a society where prices generally are no longer determined by competition. The other is the duty of the economist to ascertain, for the guidance of the public, what the actual conditions are in his own country in the matter of indus- trial organization. — Professor W. ]. Ashley, "American Trusts," in Economic Journal, June, 1899.
A Year of State Deficits. — One feature in public finance is remarkable because of its prevalence throughout the civilized world — the growing disparity between government revenue and expenditure. The situation raises the question of national revenue in a form other than has been recognized. Are the existing taxes failing to obtain revenue from the people, and must a new system be devised for enabling the governments to obtain what they need, even assuming there is no marked increase in the amount of expenditure ? In the countries of southern Europe, Portugal, Spain, Italy, the existence of a deficit in the national budget has come to be regarded as something to be expected. Only a little above these countries in its fiscal character stands France. This people has long had the largest debt and the heaviest taxation per capita of any civilized power, and the inability to make the revenues meet the rapidly increasing expenditure has become greater each year.
Germany is in a better position, as increasing burdens can be shifted to the con- federating states. No matter what the deficiencies in revenue from imperial taxation may be, it is made good by being quoted among the different states. That there should be a limit to this process is only natural, for a demand much heavier than usual would lead the states to ask whether the advantages of confederation were worth the money they required.
Austria-Hungary has been so disturbed in its domestic politics that its finances are in a greatly disordered condition. Even England faces a deficit after a long term of adequate revenue and a small surplus to be applied to the reduction of the debt. Believing that the command of the sea is essential to her very existence. Great Britain must maintain that command at any cost.
Outside of Europe, Japan is the country presenting the most interesting budget features. A recent report on the finances of that country contains a note of warning that is as applicable to the United States. " Financially Japan's military success over China seems likely to prove a heavy and constant burden." The outlay to which the country has pledged itself for productive and improductive works to be carried through within the next ten years far surpasses 100,000,000 yen.
Australia, Argentine, Brazil, Chile, India, and Mexico tell much the same story of rising expenditures, increasing debts, and unceitain revenues. In the United States the daily returns show the increasing deficit, and the extravagance of the last session of Congress has become recognized. Russia is still juggling with her official budget statement, showing a surplus in the face of enormous taxation, crushing the life out of the people, and vast undertakings in Asia which may involve war and will certainly mean heavy expenditure. There is no immediate prospect of any halt in the demands made upon the governments for expenditures. The idea has become popular that the United States government must take the initiative in many costly undertakings, such as the Nicaraguan canal, the construction of a railroad the length of Cuba, the building up of a merchant marine through subsidies, and the encourage- ment of navigation interests by an extension of the navigation laws, giving a monop- oly of the coastwise trade to American vessels. This policy is an extension to our new dependencies of the protective tariff policy so closely maintained at home. The United States, already suffering from a deficit, enters upon a career of development which involves an almost hopeless disparity between income and expenditure, so long as existing methods of obtaining national revenues are maintained.
After this survey of the leading nations of the world it is refreshing to turn to a country where the treasury is conducted so as to take as little as possible from the people. In Egypt the treasury flourishes, and debt and taxes have been brought to a
