Difficulty of Distinguishing The Causes Which Contribute
To The Economy Of The American Government
We are liable to frequent errors in the research of those facts which exercise a serious influence upon the fate of mankind, since nothing is more difficult than to appreciate their real value. One people is naturally inconsistent and enthusiastic; another is sober and calculating; and these characteristics originate in their physical constitution or in remote causes with which we are unacquainted.
These are nations which are fond of parade and the bustle of festivity, and which do not regret the costly gaieties of an hour. Others, on the contrary, are attached to more retiring pleasures, and seem almost ashamed of appearing to be pleased. In some countries the highest value is set upon the beauty of public edifices; in others the productions of art are treated with indifference, and everything which is unproductive is looked down upon with contempt. In some renown, in others money, is the ruling passion.
Independently of the laws, all these causes concur to exercise a very powerful influence upon the conduct of the finances of the State. If the Americans never spend the money of the people in galas, it is not only because the imposition of taxes is under the control of the people, but because the people takes no delight in public rejoicings. If they repudiate all ornament from their architecture, and set no store on any but the more practical and homely advantages, it is not only because they live under democratic institutions, but because they are a commercial nation. The habits of private life are continued in public; and we ought carefully to distinguish that economy which depends upon their institutions from that which is the natural result of their manners and customs.
Whether The Expenditure Of The United States Can Be Compared To That Of France
Two points to be established in order to estimate the extent of the public charges, viz., the national wealth and the rate of taxation – The wealth and the charges of France not accurately known – Why the wealth and charges of the Union cannot be accurately known – Researches of the author with a view to discover the amount of taxation of Pennsylvania – General symptoms which may serve to indicate the amount of the public charges in a given nation – Result of this investigation for the Union.
Many attempts have recently been made in France to compare the public expenditure of that country with the expenditure of the United States; all these attempts have, however, been unattended by success, and a few words will suffice to show that they could not have had a satisfactory result.
In order to estimate the amount of the public charges of a people two preliminaries are indispensable: it is necessary, in the first place, to know the wealth of that people; and in the second, to learn what portion of that wealth is devoted to the expenditure of the State. To show the amount of taxation without showing the resources which are destined to meet the demand, is to undertake a futile labor; for it is not the expenditure, but the relation of the expenditure to the revenue, which it is desirable to know.
The same rate of taxation which may easily be supported by a wealthy contributor will reduce a poor one to extreme misery. The wealth of nations is composed of several distinct elements, of which population is the first, real property the second, and personal property the third. The first of these three elements may be discovered without difficulty. Amongst civilized nations it is easy to obtain an accurate census of the inhabitants; but the two others cannot be determined with so much facility. It is difficult to take an exact account of all the lands in a country which are under cultivation, with their natural or their acquired value; and it is still more impossible to estimate the entire personal property which is at the disposal of a nation, and which eludes the strictest analysis by the diversity and the number of shapes under which it may occur. And, indeed, we find that the most ancient civilized nations of Europe, including even those in which the administration is most central, have not succeeded, as yet, in determining the exact condition of their wealth.
In America the attempt has never been made; for how would such an investigation be possible in a country where society has not yet settled into habits of regularity and tranquillity; where the national Government is not assisted by a multiple of agents whose exertions it can command and direct to one sole end; and where statistics are not studied, because no one is able to collect the necessary documents, or to find time to peruse them? Thus the primary elements of the calculations which have been made in France cannot be obtained in the Union; the relative wealth of the two countries is unknown; the property of the former is not accurately determined, and no means exist of computing that of the latter.
I consent, therefore, for the sake of the discussion, to abandon this necessary term of the comparison, and I confine myself to a computation of the actual amount of taxation, without investigating the relation which subsists between the taxation and the revenue. But the reader will perceive that my task has not been facilitated by the limits which I here lay down for my researches.
It cannot be doubted that the central administration of France, assisted by all the public officers who are at its disposal, might determine with exactitude the amount of the direct and indirect taxes levied upon the citizens. But this investigation, which no private individual can undertake, has not hitherto been completed by the French Government, or, at least, its results have not been made public. We are acquainted with the sum total of the charges of the State; we know the amount of the departmental expenditure; but the expenses of the communal divisions have not been computed, and the amount of the public expenses of France is consequently unknown.
If we now turn to America, we shall perceive that the difficulties are multiplied and enhanced. The Union publishes an exact return of the amount of its expenditure; the budgets of the four and twenty States furnish similar returns of their revenues; but the expenses incident to the affairs of the counties and the townships are unknown.k
The authority of the Federal government cannot oblige the provincial governments to throw any light upon this point; and even if these governments were inclined to afford their simultaneous co- operation, it may be doubted whether they possess the means of procuring a satisfactory answer. Independently of the natural difficulties of the task, the political organization of the country would act as a hindrance to the success of their efforts. The county and town magistrates are not appointed by the authorities of the State, and they are not subjected to their control. It is therefore very allowable to suppose that, if the State was desirous of obtaining the returns which we require, its design would be counteracted by the neglect of those subordinate officers whom it would be obliged to employ.l It is, in point of fact, useless to inquire what the Americans might do to forward this inquiry, since it is certain that they have hitherto done nothing at all. There does not exist a single individual at the present day, in America or in Europe, who can inform us what each citizen of the Union annually contributes to the public charges of the nation.m
Hence we must conclude that it is no less difficult to compare the social expenditure than it is to estimate the relative wealth of France and America. I will even add that it would be dangerous to attempt this comparison; for when statistics are not based upon computations which are strictly accurate, they mislead instead of guiding aright. The mind is easily imposed upon by the false affectation of exactness, which prevails even in the misstatements of science, and it adopts with confidence errors which are dressed in the forms of mathematical truth.
We abandon, therefore, our numerical investigation, with the hope of meeting with data of another kind. In the absence of positive documents, we may form an opinion as to the proportion which the taxation of a people bears to its real prosperity, by observing whether its external appearance is flourishing; whether, after having discharged the calls of the State, the poor man retains the means of subsistence, and the rich the means of enjoyment; and whether both classes are contented with their position, seeking, however, to ameliorate it by perpetual exertions, so that industry is never in want of capital, nor capital unemployed by industry. The observer who draws his inferences from these signs will, undoubtedly, be led to the conclusion that the American of the United States contributes a much smaller portion of his income to the State than the citizen of France. Nor, indeed, can the result be otherwise.
A portion of the French debt is the consequence of two successive invasions; and the Union has no similar calamity to fear. A nation placed upon the continent of Europe is obliged to maintain a large standing army; the isolated position of the Union enables it to have only 6,000 soldiers. The French have a fleet of 300 sail; the Americans have 52 vessels.n How, then, can the inhabitants of the Union be called upon to contribute as largely as the inhabitants of France? No parallel can be drawn between the finances of two countries so differently situated.
It is by examining what actually takes place in the Union, and not by comparing the Union with France, that we may discover whether the American Government is really economical. On casting my eyes over the different republics which form the confederation, I perceive that their Governments lack perseverance in their undertakings, and that they exercise no steady control over the men whom they employ. Whence I naturally infer that they must often spend the money of the people to no purpose, or consume more of it than is really necessary to their undertakings. Great efforts are made, in accordance with the democratic origin of society, to satisfy the exigencies of the lower orders, to open the career of power to their endeavors, and to diffuse knowledge and comfort amongst them. The poor are maintained, immense sums are annually devoted to public instruction, all services whatsoever are remunerated, and the most subordinate agents are liberally paid. If this kind of government appears to me to be useful and rational, I am nevertheless constrained to admit that it is expensive.
Wherever the poor direct public affairs and dispose of the national resources, it appears certain that, as they profit by the expenditure of the State, they are apt to augment that expenditure.
I conclude, therefore, without having recourse to inaccurate computations, and without hazarding a comparison which might prove incorrect, that the democratic government of the Americans is not a cheap government, as is sometimes asserted; and I have no hesitation in predicting that, if the people of the United States is ever involved in serious difficulties, its taxation will speedily be increased to the rate of that which prevails in the greater part of the aristocracies and the monarchies of Europe.o
d It is needless to observe that I speak here of the democratic form of government as applied to a people, not merely to a tribe.
e The word poor is used here, and throughout the remainder of this chapter, in a relative, not in an absolute sense. Poor men in America would often appear rich in comparison with the poor of Europe; but they may with propriety by styled poor in comparison with their more affluent countrymen.
f The gross receipts of the Treasury of the United States in 1832 were about $28,000,000; in 1870 they had risen to $411,000,000. The gross expenditure in 1832 was $30,000,000; in 1870, $309,000,000.
g The easy circumstances in which secondary functionaries are placed in the United States result also from another cause, which is independent of the general tendencies of democracy; every kind of private business is very lucrative, and the State would not be served at all if it did not pay its servants. The country is in the position of a commercial undertaking, which is obliged to sustain an expensive competition, notwithstanding its tastes for economy.
h The State of Ohio, which contains a million of inhabitants, gives its Governor a salary of only $1,200 a year.
i To render this assertion perfectly evident, it will suffice to examine the scale of salaries of the agents of the Federal Government. I have added the salaries attached to the corresponding officers in France under the constitutional monarchy to complete the comparison.
United States
Treasury Department
Messenger ............................ $700
Clerk with lowest salary ............. 1,000
Clerk with highest salary ............ 1,600
Chief Clerk .......................... 2,000
Secretary of State ................... 6,000
The President ........................ 25,000
France
Ministere des Finances
Hussier ........................... 1,500 fr.
Clerk with lowest salary, 1,000 to 1,800 fr.
Clerk with highest salary 3,200 to 8,600 fr.
Secretaire-general ................20,000 fr.
The Minister ......................80,000 fr.
The King ......................12,000,000 fr.
I have perhaps done wrong in selecting France as my standard of comparison. In France the democratic tendencies of the nation exercise an ever-increasing influence upon the Government, and the Chambers show a disposition to raise the low salaries and to lower the principal ones. Thus, the Minister of Finance, who received 160,000 fr. under the Empire, receives 80,000 fr. in 1835: the Directeurs-generaux of Finance, who then received 50,000 fr. now receive only 20,000 fr. [This comparison is based on the state of things existing in France and the United States in 1831. It has since materially altered in both countries, but not so much as to impugn the truth of the author’s observation.]
j See the American budgets for the cost of indigent citizens and gratuitous instruction. In 1831 $250,000 were spent in the State of New York for the maintenance of the poor, and at least $1,000,000 were devoted to gratuitous instruction. (William’s “New York Annual Register,” 1832, pp. 205 and 243.) The State of New York contained only 1,900,000 inhabitants in the year 1830, which is not more than double the amount of population in the Department du Nord in France.
k The Americans, as we have seen, have four separate budgets, the Union, the States, the Counties, and the Townships having each severally their own. During my stay in America I made every endeavor to discover the amount of the public expenditure in the townships and counties of the principal States of the Union, and I readily obtained the budget of the larger townships, but I found it quite impossible to procure that of the smaller ones. I possess, however, some documents relating to county expenses, which, although incomplete, are still curious. I have to thank Mr. Richards, Mayor of Philadelphia, for the budgets of thirteen of the counties of Pennsylvania, viz., Lebanon, Centre, Franklin, Fayette, Montgomery, Luzerne, Dauphin, Butler, Alleghany, Columbia, Northampton, Northumberland, and Philadelphia, for the year 1830. Their population at that time consisted of 495,207 inhabitants. On looking at the map of Pennsylvania, it will be seen that these thirteen counties are scattered in every direction, and so generally affected by the causes which usually influence the condition of a country, that they may easily be supposed to furnish a correct average of the financial state of the counties of Pennsylvania in general; and thus, upon reckoning that the expenses of these counties amounted in the year 1830 to about $361,650, or nearly 75 cents for each inhabitant, and calculating that each of them contributed in the same year about $2.55 towards the Union, and about 75 cents to the State of Pennsylvania, it appears that they each contributed as their share of all the public expenses (except those of the townships) the sum of $4.05. This calculation is doubly incomplete, as it applies only to a single year and to one part of the public charges; but it has at least the merit of not being conjectural.
l Those who have attempted to draw a comparison between the expenses of France and America have at once perceived that no such comparison could be drawn between the total expenditure of the two countries; but they have endeavored to contrast detached portions of this expenditure. It may readily be shown that this second system is not at all less defective than the first. If I attempt to compare the French budget with the budget of the Union, it must be remembered that the latter embraces much fewer objects than then central Government of the former country, and that the expenditure must consequently be much smaller. If I contrast the budgets of the Departments with those of the States which constitute the Union, it must be observed that, as the power and control exercised by the States is much greater than that which is exercised by the Departments, their expenditure is also more considerable. As for the budgets of the counties, nothing of the kind occurs in the French system of finances; and it is, again, doubtful whether the corresponding expenses should be referred to the budget of the State or to those of the municipal divisions. Municipal expenses exist in both countries, but they are not always analogous. In America the townships discharge a variety of offices which are reserved in France to the Departments or to the State. It may, moreover, be asked what is to be understood by the municipal expenses of America. The organization of the municipal bodies or townships differs in the several States. Are we to be guided by what occurs in New England or in Georgia, in Pennsylvania or in the State of Illinois? A kind of analogy may very readily be perceived between certain budgets in the two countries; but as the elements of which they are composed always differ more or less, no fair comparison can be instituted between them. [The same difficulty exists, perhaps to a greater degree at the present time, when the taxation of America has largely increased. – 1874.]
m Even if we knew the exact pecuniary contributions of every French and American citizen to the coffers of the State, we should only come at a portion of the truth. Governments do not only demand supplies of money, but they call for personal services, which may be looked upon as equivalent to a given sum. When a State raises an army, besides the pay of the troops, which is furnished by the entire nation, each soldier must give up his time, the value of which depends on the use he might make of it if he were not in the service. The same remark applies to the militia; the citizen who is in the militia devotes a certain portion of valuable time to the maintenance of the public peace, and he does in reality surrender to the State those earnings which he is prevented from gaining. Many other instances might be cited in addition to these. The governments of France and of America both levy taxes of this kind, which weigh upon the citizens; but who can estimate with accuracy their relative amount in the two countries?
This, however, is not the last of the difficulties which prevent us from comparing the expenditure of the Union with that of France. The French Government contracts certain obligations which do not exist in America, and vice versa. The French Government pays the clergy; in America the voluntary principle prevails. In America there is a legal provision for the poor; in France they are abandoned to the charity of the public. The French public officers are paid by a fixed salary; in America they are allowed certain perquisites. In France contributions in kind take place on very few roads; in America upon almost all the thoroughfares: in the former country the roads are free to all travellers; in the latter turnpikes abound. All these differences in the manner in which contributions are levied in the two countries enhance the difficulty of comparing their expenditure; for there are certain expenses which the citizens would not be subject to, or which would at any rate be much less considerable, if the State did not take upon itself to act in the name of the public.
n See the details in the Budget of the French Minister of Marine; and for America, the National Calendar of 1833, p. 228. [But the public debt of the United States in 1870, caused by the Civil War, amounted to $2,480,672,427; that of France was more than doubled by the extravagance of the Second Empire and by the war of 1870.]
o That is precisely what has since occurred.
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