use was concerned, were becoming more and more identical. In 1886 it was stated that 90 per cent. of the silk importations were as a rule undervalued; and so great were the apparent difficulties of securing an equal and just administration of the law, that the Democratic secretary of the treasury, representing a party generally standing for ad valorem rather than specific duties, recommended specific duties on silks. Much litigation grew out of the frequent changes in classification; and suits were entered much more rapidly than the courts could dispose of them.

A special effort was made in 1885 to remedy some of these evils and simplify the administration, and a bill originally drawn by Secretary Manning became the basis of the socalled McKinley administrative act of 1890. The stringency of the provisions to prevent fraud was increased; additional penalties were provided for undervaluation, and the number of general appraisers was increased in order to correct inequalities in the appraisement at different ports. The appraisers were organized into boards or courts for the prompt settlement of questions of appeal. On a simple question of value, a board of three general appraisers is a tribunal of last resort, and this simple device has greatly expedited the customs business. A further appeal to the United States courts lies only in case of alleged illegal or irregular procedure by the government officials in arriving at the valuation. On the equally important question of classification, another board of general appraisers acts as a judicial court, but in cases of this character, there is the right of appeal to the federal courts either by the importer or by the government.

The administration of the internal revenue service does not at present involve many special difficulties, for questions of valuation and classification are easy to settle. Great and notorious frauds and scandals did spring up from the operations of the Whiskey Ring, especially in the years 1872-1875, and high government officials were involved, but these were instances of bribery and defiance of law, and the corrupt practices are to be interpreted as one of the symptoms of a de

based tone of business and political life, rather than a defect in the revenue system. At present the illicit distillation of whiskey is for the most part confined to the mountain districts of the South, where moonshiners operate on a small scale. The system has now been so long established that attempts to evade the tax, by illicit distillation or fraudulent packages, are rare. Under the jurisdiction of the commissioner of internal revenue are 63 district collectors, and a force of special agents who watch distilleries and ferret out frauds.

85. MUNICIPAL FINANCE ADMINISTRATION.

The following description of the administration of the finances of cities is taken from Professor Fairlie's recent book on Municipal Administration: 1

The budget arrangements in American cities offer a wide variety, which it is impossible to reduce to any general statement. One distinguishing feature of the American arrangements is that the budgets are prepared by local officials subject to no administrative control, although there are legislative statutes regulating and restricting the total amount of municipal debt that may be incurred, special statutes making certain items of expenditure compulsory in particular cities, and in some cases statutes restricting the amount of the total tax levy. Of the variety of local budget methods, two contrasting systems may be described: the council system, which was formerly universal, and the board of estimate plan.

In the original council system the various spending departments submit to the council estimates of the amount needed or wanted for the following year. These estimates are considered either by a single appropriation committee, or by several committees; and an appropriation bill is prepared, discussed by the council, and passed subject to the mayor's limited veto power. The final bill will usually vary widely

1 Reprinted from Fairlie, J. A., Municipal Administration, by permission of MacMillan and Company.

from the department estimates, and the responsibility for the accepted budget rests with the appropriation committees or the council as a whole. This system has in many cities tended toward extravagance, since the members of the council have been more interested in securing improvements than in reducing taxation; and it is on this account that there has been introduced in most of the large cities a board of estimate, or similar authority, with more or less power over the preparation of the budget. The powers of this board are most extensive in New York city. The board there has consisted of the mayor, the comptroller, the president of the department of taxes and assessments, the corporation counsel, and the president of the council-all but one administrative officials, but officials not connected with any of the large spending departments. The mayor, comptroller, and president of the council were each elected by popular vote; the other two officials were appointed by the mayor, so that the latter and his appointees could control the board. In 1902 a new organization goes into effect. The presidents of the five boroughs into which New York is divided are admitted to the board; and the various members are given different voting strength. The elected members will control the board; but the borough presidents will be officers directly interested in expenditures on public works.

To this board each department submits its estimates with comparative figures for the preceding year. Each department estimate is considered by the board after consultation with the head of the department, and the budget of expenditures is drawn up by the board and submitted to the municipal assembly. The assembly, under the charter of 1897, has no authority to increase any item in the budget, but may by a three-quarters vote decrease the amounts fixed by the board of assessment. Finally, the mayor may veto any item in an appropriation bill, and this veto can be overruled only by a five-sixths vote of all the members of each house.

The total regular appropriations for the year being determined in one way or another the process of determining the

tax rate is comparatively simple. To the appropriations are added the amounts prescribed for interest on loans, for sinking funds, and for state and county taxes. From the total is deducted the estimates of revenue from property, franchises, industrial undertakings, licenses, fees and state grants. The balance is compared with the assessed valuation of taxable property for the city as determined by the assessors, and the rate necessary to yield the desired revenue is calculated.

The assessors have two functions to perform; the valuation of the property, and the assessment of the tax to each property owner at the determined rate. The valuations of property are commonly supposed to be made each year; but in large cities it is impossible for assessors to visit and inspect even all the real estate every year, and valuations usually stand for several years unless there is some marked improvement. Personalty assessments are made largely by guesswork. The general rule of law is that personalty must be assessed at the domicile of the owner; but some forms of tangible personalty may be assessed at its situs, and the confusion of the law on this point gives rise to double assessments. Moreover, owners of personalty are allowed to 'swear off" their assessments in bulk in many states. There is, however, very little opportunity for judicial review of the individual assessments.

The valuations and tax assessments being made, the tax books are handed to the collector or receiver of taxes, who receives the payments from the taxpayers and turns the revenue over to the city treasurer. The amount received varies considerably from the total amount of the assessment. Small rebates are usually allowed for prompt payment, interest is charged on delayed payments, while there is always a number of delinquent taxpayers, whose taxes must be collected by special processes.

The financial bookkeeping and auditing of accounts in all important American cities is carried out under the discretion of a comptroller, auditor, or controller, who is, in most

cases, an elective officer. In Cleveland, Chicago, and Detroit, however, the official whose functions correspond to those of the comptroller is appointed by the mayor. The duties of the comptroller in most cases include other functions than that of auditing accounts. Generally he has some supervision over the entire financial administration, while in cities where the board of estimate system has been adopted he has a large influence over the budget. In New York the comptroller is the head of the finance department, and the chamberlain (treasurer) is simply the chief of a bureau in that department; more generally, however, the treasurer is a co-ordinate official to the comptroller.

As auditing authority the comptroller's office examines and approves (or disapproves) all claims against the city; and payments are made by the treasurer only on warrants of the comptroller. This auditing system is in addition to the preliminary examination and approval of bills by the department concerned. In addition to the checking of accounts, the comptroller's bureau often does a large amount of inspection of work and supplies. On the other hand, the comptroller's audit and inspection does not always include the whole field of municipal expenditure. School boards very often have an independent audit, and in some cases police and other boards conduct the audit of their own accounts.

The methods of keeping accounts in the different cities show the extreme of variety, and the total lack of anything like a general system. To a certain extent local differences require variations in the methods of municipal bookkeeping, especially for certain special and trust funds. But in America the variations go far beyond those made necessary. This lack of uniformity in accounting is one of the most serious obstacles in the way of a comparative study of municipal finances; while in most cases the reports of municipal comptrollers are in such a confused condition that even one well acquainted with the local conditions finds it difficult, if not impossible, to understand the financial situa