1 SEPTEMBER 1917, Page 19

TRH growing interest of the English-speaking public on both Bides

of the Atlantic in problems of State finance is reflected its the recent appearance of several books upon the financial methods of the British and of other Governments. Two of the moot important of these books are Parriamsetary Grange, by Colonel Duren, and The Financial Adinini4ration of Great Britain, by a group of Anwricaa writers. The first of these books is a work entirely of home production. The author is the Chief Paymaster at the War Office. and his book is prefaced with a few words by Sir Charles Hanle in favour of careful administrative cheeks upon wastef ttl expeadituro. Such words are specially valuable coming froth the man who rah been primarily responsible for the supervision of the enormous expenditure of the War Office during the last few years. The main object of Colonel Burell's book is to expound clearly and authori- tatively the somewhat complicated mschinery by moans of which public expenditure is adnusuatered and controlled in this country. His book is expository rather than critical. and should be of very great service to public men. and Government- officiate as a work for information and reference. Beginning with Parliamentary control, which he rightly describes " the bedrock on which, the English system is built," Colonel Durell goes on to describe in detail the way in which Parliament operates through the Committee of Supply and the Committee of Ways and Means, and the way in which the purposes 55 Parliament are further enforced through the Treasury, through the Controllm and Aeditor.General, and through the Public Accounts Committm. While explaining the workings of this elaborate, but not necessarily too elaborate, mechanism, Colonel Durell sees clearly enough that 111011111.11i1411, alone, though essential. is insufficient utiless the guiding toren behind it is actuated by sound motives. As Mill so well pointed out : " Publicity in no impediment to evil nor a stimultut to good, if the public will not look at what is done." We always, in fact, -get back to the nation itself, and if the nation dots. not care for economy it is quite certain that no financial mechanism. will provide it.

One of the points rarely appreciated by Englishmen of to-flay -is the slow growth of Parliamentary control over public expenditure. We are apt to assume that when the House of Commons had its birth in the reign of Edward I. the principle was established that Parliament was responsible for public expenditure. That is not the case. As Colonel Buret' says : " In the early days of English Parliamentary history the supplies were voted en income to the Sovereign, and the detail of expenditure was left to his more or less uncontrolled discretion." It was not until the end of -the eighteenth century that the Consolidated Fund was instituted, and it was not till the middle of the nineteenth century that the Controller and Auditor-Central was appointed and the Public Accounts Committee established. It is to that official and to that Committee, working in harmony willi the Treasury, that the nation owes any economy of its money that may be effected. For, as Colonel Durell points out, and as the American critics of our system also insist, the House of Commons in its collective capacity is not an economical body. Bagehot summed up the situation admirably in his work on the English Constitution when he said : " The House of Commone, now that it is the true sovereign and appoints the real executive, has long ceased to be the eheeking, sparing, economical body it once was. It now is more apt to vend money than the Minister of the day. If you want to raise a cheer in time buff of Commons make a general panegyric on economy if you went to invite a sure defeat propose a particular saving." Moreover, even when there is a tendency to economy in the House it can be overridden by the Executive Government relying upon • (1) Tim Principle* cud Powder of Ore Soden. of Protect oar Podia...tare Bond*. By Wood A. J. V. lewd!, CIS. Portsmouth Pub1inhfng CO. LIM!. /OM stem- Kt Is. uct.]-(2) The Soirees of leinann'al Adoinidration of Groat Britain. ley Prot...nom W. F. Winonantr, w. w. Nillooghty,aaa Y. M. L1.daAya LOtultur D. Appleton sea tn. Ills. CAL nog

its party Whips. Colonel Duren sets out in detail the steps taken during the nineteenth century to secure effective machinery for Parliamentary control. The most important of these steps was the passing of the Exchequer and Audit Act of 18118, for which the nation is mainly indebted to Mr, Gladstone. That Act was so well thought out that few alterations have since been necessary. It created the office of Controller and Auditor-General, who is, like any of His Majesty's Judges, ireetnovable except upon a vote from both Houses of Parliament. That officer works with the Treasury on the one hand, and on the other hand with the Public Accounts Committee of the House of Commons. It is true, as has recently been pointed out, that his scrutiny of the national accounts, as also the operations of the Public Accounts Committee, are in the nature of a postonoreent examination ; but the consciousness that this very careful pod-merles. will take place has a most valuable influence in checking irregularities in public expenditure. For the actual prevention of unnecessary expenditure the country has in the main to look to the Treasury. That controlling Department, when it is fortunate enough to have at its head a real economist and a strong Minister, is able to save the country enormous sums of money by forbidding the spending Departments to embark upon expenditure which Cannot be justi.led.

The American work, though in some respects slightly less detailed than Colonel Durell's substantial volume, is perhaps even more valuable to the general reader because it brings to hear an outside light upon our internal problems. The book is the outcome of a movement among University men in the United States to make careful studies' of Governmental institutions in other countries. Its three authors aro described in the editor's note as men of " nation-wide reputation." They have certainly done their work with great efficiency, and have produced a volume which ought to be of real public service on both aides of the Atlantic. Like Colonel Dwell, they trace the financial machinery of Great Britain from its beginning in the House of Commons, and they constantly illuminate their work by comparisons between the English and the American systems. In particular they rightly lay stress upon that most valuable Standing Order of the Howse of Commons which prevents any private member from making a motion for a charge upon the public revenue or for an increase of any proposed charge. Demands for expenditure can only be made upon the House of Commons on the motion of a Minister of the Crown. The immense advantage of this strict rule is thus set out by the American Commission " At one stroke it renders impossible the enormous abuses which prevail in the *United States arising team the right possessed by individual members of Congress to propose and secure the consideration of mearnaren calling for an appropriation of public funds. The exercise of that right in conjunction with the device of `log-rolling' has not onlj given rise to the recurrent scandals of the ' pork barrel' public buildings and river and harbour Bills, but has destroyed all possibility of framing and adopting a con- sistent and effective scheme or program of public expenditures." The writers go on to point out how individual members of Congress are much more anxious to serve the private interests of the localities they represent than the public interests of the nation as a whole. " In many eases; money is appropriated in pursuance of proposals thus initiated, notwithstanding the feet that the heads of the services affected protest vigorously that they have no need for such money or for the services to be furnished by such funds." In effect in the United Status it is the Legislatures which are responsible for lavish and wasteful appropriation rather than the Executive, and "the Ex-ecutive veto alone is relied upon to protect the people."

These very competent American investigators share to the full Colonel Durelrs admiration for the work done by the Treasury. lit their own words

" -More and more, as our investigation proceeded, the Commission had borne in upon it the fart that in the Treasury the British Government Inns a great organ of general administrative control ; that upon it fell the duty and responsibility for the final determina- tion of what form of organization the several departments of the Government should have, what personnel was needed, what com- pensation should be paid, what now undertakings should be authorized, what changes should be made in the employment of funds as provisionally allotted by Parliament, what new grants Parliament should be asked to make, what the works program of the Government should be, &c. ; that in discharging this tunetion it was its duty to keep itself thoroughly informed regarding the conditions and needs of the several services and use its utmost endeavour to see that the Government operations were conducted- with the maximum of efficiency and economy ; that, in a word, the Treasury was the one authority to which Parliament and the public looked to see that public affairs were administered in an economical and efficient manner."

After this valuable, and in the mein thoroughly well justified, testimonial to the work of the Treasury, the Commission go on to point out how this essential work of the most important of our Government Departments has recently been impaired by entrusting to the Treasury the administration of such spending Departments as National Insurance. This was a blunder committed by Mr. Lloyd George when he was Chancellor of the Exchequer, and it is a blunder which ought to be corrected without further delay, Among other valuable criticisms of our financial system, these American investigators lay special stress upon the absence of any complete statement of public expenditure. The statements published by the Treasury week by week and the statement made by the Chancellor of the Exchequer when introducing his annual Budget only deal with the issues from and receipts into the public Exchequer, but apart from these Exchequer issues and receipts each Department lime receipts of its own which are known as Appropriations-in-aid. There has been repeated controversy as to how these Departmental receipts should be dealt with. They may be only a few shillings for waste-paper, or may amount to millions—as in the case of payments made to the War Office by the Indian Exchequer. Unfortunately no clear decision has over been reached, with the result that at present there is complete chaos. For example, in the published accounts the County Courts appear only to cost £5 a year, whereas the High Court of Judicature was entered for the same year at £339,887. The reason for Ode extraordinary discrepancy is that the fees received in the County Courts are treated as an Appropriation-in-aid, whereas the fees paid into the High Court are treated as an item of public revenue.

An even more grotesque illustration is the following fees for admission to the Tower of London are treated as an Appropriation- in-aid ; fees for admission to the National Portrait Gallery are treated as an item of national revenue. Examples of this character could bo multiplied indefinitely, and until the system of Appropriations-in-aid is reformed no full statement of our national expenditure can be prepared. The American Commission lean to the view that, on the whole, the best way of dealing with these Departmental receipts is to treat them all as national revenue. There are arguments on both sides, but ill any ease there ought to be published annually a return of the complete Income and Outgo of each Department so that the public would be able to see the actual cost involved for that Department. Such a return wee, indeed, presented to the House of Commons by the Treasury in 1909, but has unfortunately not been repeated.