Charles Francis Bastable

“ Unproductiveness is, according to modern standard, the cardinal fault of any particular tax. How great has been the progress in these aspects is best illustrated in the case of English finance, but both French and German fiscal history can supply many instructive examples.
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. ”

“ Feudalism, as the antithesis of this orderly treatment, had to be overthrown before national finance could become established. The development can be traced in the financial history of England, France and the German states; but the advance in the French financial organization of the 15th and 16th centuries affords the best illustration. The gradual unification operates on all the branches of finance,—expenditure, revenue, debt and methods of control. In respect to the first head there is a well-marked “integration” of the modes for meeting the cost of the public services. ”

“ 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 needs of the central government lead to its retention of the more profitable modes of procuring revenue. No modern country can surrender the chief direct and indirect taxes to the local administrations. Another limiting condition is found in the practical impossibility of levying by local agencies such imposts as the customs and the income-tax in their modern forms. The elaborate machinery that is requisite for covering the national area and securing the revenue against loss can only be provided by an authority that can deal with the whole territory. ”

“ 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. ”

“ A clearer perception of the conditions under which the effective attainment of revenue is possible is another outcome of financial development. Security, and in particular the absence of arbitrary impositions, combined with convenient modes of collection, have come to be recognized as indispensable auxiliaries in financial administration which further aims at the selection of really productive forms of charge. ”

“ 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. ”

“ 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 with—indeed it is one side of—the movement towards feudalism which was the great feature of this period. Finance is essentially a part of public law and administration. ”

“ 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. ”

“ In fact the special maxims usually placed under the head of 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. ”

“ 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. ”

“ Notwithstanding the differing features in the several countries, retrogression is the common characteristic of European history from the 5th to the 10th century, and it was from the ruder state that this decline created that the rebuilding of social and political organization had to be accomplished. ”

“ 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. ”

“ 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. ”

“ Over a great part of municipal administration—particularly that engaged in supplying the needs of the individual citizens—the finance may be assimilated to that of the joint-stock company, with of course the necessary differences, viz. ”