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Financial Organization and Administration


The reason why it is necessary to include in the Science of Finance a consideration of financial organization and ad ministration was cursorily explained in the analysis intro ductory to this treatise. It was there shown that the manner in which fiscal laws are administered, and the form of the machinery for their execution, have a direct bearing upon the smooth working of a fiscal policy, and by inference it was suggested that the indirect effects of the management of the public treasury upon the commercial interests of a people should be accepted as among the important tests of successful administration. It is not designed to carry the discussion of the organization and administration of the Treasury Depart ment so far as to enter upon a consideration of rules for the conduct of treasury officials. No one would for a moment question the importance of adequate " rules " or clear " in structions to agents " for the successful management of fiscal affairs; but the limited space at our disposal must confine our attention to the general outlines of the subject, and we shall be obliged to content ourselves with a consideration of the general principles of organization and accounting, and with a general analysis of the relations existing between the Treasury Department and the commercial world.

It may be well at the outset to notice that, although fiscal operations are, for the most part, non-commercial in character, they nevertheless make use of commercial machinery, and that in this manner the Treasury Department comes into close touch with business affairs. The checks and drafts of public officers, for example, are included among the credits that flow daily through the clearing-houses of the country. Public bonds are quoted side by side with the obligations of corpora tions and are bought and sold in open market. The warrants and certificates of indebtedness of the various grades of government may be used for investment or for security, in the same manner as ordinary commercial paper. Moreover, in the collection of its taxes or in the disbursement of its funds the government is obliged to make use of the currency of the land, and on this account it is easy to see how mismanagement on the part of treasury officers might seriously embarrass trade and industry. The public treasury cannot withdraw it self from the current of commercial influences should it so de sire, and for this reason it is vital to commercial interests that great care should be exercised in formulating the rules by which its fiscal operations are conducted.

34. Organization of the Treasury Department. No government has ever been able to maintain in the organiza tion of its executive departments a carefully considered and scientific classification of executive functions, and for this reason it is not possible to submit a formal definition of a Treasury Department which properly represents prevalent practice. Speaking in a general way, the Treasury De partment is that branch of the executive organization that has to do in a formal and authoritative manner with the finan cial operations of government. The officers of other depart ments may handle public moneys, but they do so under rules prescribed by the Treasury Department, and are personally, though not officially, responsible for the observance of those rules. All dues to the government are covered into the Treasury by the use of a receipt to whomsoever pays the money, and all payments are made upon the authority of treasury officials by duly attested warrants. This rule applies to receipts and expenditures of semi-commercial services, as well as to receipts from taxes and expenditures for services that are general in character. In the German states, for example, the operating expenses for railways, telegraphs, pub lic mines, and public forests are to be found in the official statement of treasury expenditures. In this country the pay ments and receipts of the post-office must pass through the books of the Treasury Department. The English Exchequer is defined in Palgrave's Dictionary of Political Economy as the purse of the nation, and tHis phrase fairly represents the posi tion which the Treasury Department holds among the execu tive departments of the State.

Although many differences present themselves in matters of detail, the Treasury Department of every nation must make provision, in one form or another, for the performance of three sets of duties : it must provide for administration within the limits of its own peculiar duties, for adjudication upon all pecuniary claims, and for the keeping of the public accounts. This may be made clear by a cursory description of the Treasury Department of the United States Government, and for the purpose of bringing the entire organization within the scope of a single exhibit this description will be introduced by a formal analysis of the department as at present organized.

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