FINANCIAL SYSTEM, UNITED

STATES. The Constitution empowered Congre to determine the sources of revenue and its expenditure. Congre hence has authority to contract loans, levy taxes, and to frame and enact measures defining how government moneys received from this and other sources shall be spent. The government balance sheet (or budget) of 1922 showed receipts amounting to $4,103,741,000, of which income and profits taxes contributed $2,086,918,000; other sources of inland revenue $1,121,239,000; and customs (or tariff), $357,544,000. Thus taxation and tariff furnished much of the major part of the total revenue. The balance mostly represented repayments on foreign loans, sales of war supplies and redemption of farm loan bonds. In addition to income, profits and customs dues, the government’s source of revenue includes taxes on estates, telegraph and telephone me ages, beverages, theater various kinds of brokerage ‘busine es, corporation stock, cigar and tobacco yachts, real estate conveyances, drafts and checks over $100, ocean pa enger tickets and insurance policies. Some of these. imposts may be repealed as the requirements of revenue become le exigent through reductions of the government’s obligations. The principal expenditures of the government are interest on the public debt (in 1922, ings, the support of the government departments, executive, legislative, and judicial, and the army and navy. The national public debt, which in the fiscal year of 1921-2 was about $22,- 000,000,000, is subject to periodic reduction, due to provision for retirement of bonds and notes made in the annual budget. These payments constitute a considerable item: in the Treasury expenditures. The debt is composed of pre-war notes and bonds, which in the period named amounted to $883,784,000; Liberty Bonds, $15,- 227,151,000; war notes, $4,347,184,000; Treasury War icates, $2,078,593,- 000; and war-sayings securities, $664,- The federal finances have grown in magnitude, especially since the World War. Before that conflict the need of another channel of revenue besides felt to meet growing outlays, and in 1913 a tax on a levied, to be amplified greatly in the war period. In addition to helping to defray interest on the public debt, especially on war bonds held by the people, increased income taxes were nece ary to make up for the sacrifice of revenue caused by the curtailment of receipts from liquor taxes due to the enactment of prohibition in 1919. When the government needs temporary funds to meet current obligations, it procures them through the i ue of treasury notes, which are taken up by the banks. See Banxine; Bupaet: and Dzsts, War. The financial system of the State governments is similar to that of the national authority. The legislatures exercise the power of determining the raising and spending of moneys, and the executive epartments are therefor dependent on legislative appropriations for running the wheels of administration. The revenues of the States are largely derived from taxation of real and personal property and _ levies on busine es. Some impose an income tax like New York, and there are also inheritance or estate taxes, as well as a growing revenue from automobile registration. Their expenditures, aside from government and departmental needs, embrace the construction and upkeep of schools, libraries, charities, hospitals, correctional institutions, police and fire departments, militia and armories, highways, conservation of natural resources, sanitation, educational and general recreation, parks, reservations, and monuments. The a e able value of real property for taxation pu varied in 1922 rposes from $15,390,398,000 for New York to $169,393,000 for NewHam: New York, the States with the highest a e able realty values were Iowa and Kansas. State indebtedne , like national, is a big item. In 1922 New York owed the most ($185,826,000) and Indiana and Texas the least, or well under $500,000. Iowa, Kansas, Nebraska, South Dakota and Wisconsin have no debts.