Зображення сторінки

import trade nearly as considerable as that of the countries for which totals are there given, but which are not comprised in our tables. Only an approximate figure can be given, but even such a figure may be useful if it be understood to be merely approximate. Roughly, then, in 1884–86, besides the £1,400,000,000 of imports we have enumerated, a further £200,000,000 should be taken into consideration if we would estimate the magnitude of the world's foreign trade. These £200,000,000 increased considerably in the ten years to 1894—96, and, at the latter date, roughly £250,000,000 may be added to the £1,600,000,000 we have enumerated of imports. If it be true that the increase of foreign trade tends to international peace, the progress of the decennium in question is a matter for genuine rejoicing.



MR. BALFOUR in the eloquent speech he delivered some months ago in the McEwan Hall laid stress on the tendency of our times to have more and more Government, as he called it, in every department of the state. There is no direction in which this development has been more apparent than in the vast increase in the importance of decentralised governments, of the free local bodies which administer our counties, parishes and towns. It has become a familiar idea to us now to hear imperial and local matters discussed as of equal moment, and one of our statesmen, who has recently acquired a peculiar standing as an instructor of the public, defined as the minimum of service due from a British citizen “that he should keep a close and vigilant eye on public and municipal affairs.” 2 That public and municipal should be coordinated, and coordinated at a time when the country was trembling on the brink of a war with France, is surely full of significance. It would have been an empty phrase not many years ago. I think that the secret of this change lies in the endowment of local bodies with financial powers. When a political body acquires the power to impose taxes, a change takes place like that produced in the life of a state by a victorious war or an able policy which raise it to the rank of a great power. Local bodies are no longer mere pawns on the political chess board, which call forth the praise of constitutional writers by their ability to safeguard our freedom, they are now in a position to directly and immediately affect the welfare of the realm, a position which brings with it a public responsibility and a public importance which are new.

Until quite recently it was not even considered necessary to have a complete record of the figures of local finance, and Scotland has been especially behindhand in this respect. The first attempt

1 Read before the Scottish Society of Economists on 14 Feb., 1899.
2 Lord Rosebery, 26 Oct. 1898.

we possess in this direction is Mr. Goschen’s Report of 1870, which places the total expenditure of all the local bodies in Scotland at £3,000,000. At present the total exceeds £11,000,000, and although certain adjustments have to be made on this figure, it represents the aggregate spending capacity of these authorities, and we may judge its significance by considering that Scotland's contribution to the central expenditure of the United Kingdom amounts to about £11,000,000 also.?

We realize still further how recent this rise to importance of local finance has been if we glance back at the conditions existing at the time of Her Majesty's accession. The counties were administered by Commissioners of Supply nominated by Parliament, whose chief duty it was to levy the “rogue money,” an old assessment for defraying the charges of the police, and the rate was imposed according to valuations settled two hundred years ago. The management of roads and bridges was for the most part in the hands of trustees, but provisions for statute labour were still in existence, and tenants and their servants were liable to be called out “with horses, carts, sleds, spades, shovels, piks, mattocks, and other instruments” to repair the highways, which were to be “so repaired that horses and carts might travel, summer and winter, thereupon.” 3 In parishes the relief of the poor was still met by voluntary contributions, and for burghs no general Police Act had been passed, the chief source of supply for the public expenditure being the revenue derived from the common good of the towns. It is hardly necessary to trace in detail the subsequent development of local finance, but two leading features may be dwelt on which show how little forethought has hitherto been exercised in this matter.

In the first place the financial power which has been given seems in many cases to be unreasonably wide. Many local rates have no limit imposed on their amounts, but for others a maximum rate per £is fixed, which has been steadily increased by successive Acts of Parliament. In burghs, for instance, the assessments for police, general improvements, and public health are together restricted to 5/3 per £ of rental, while the rates for drainage and roads and streets are unlimited. But in reality the rates for all purposes whatever in no burghs in Scotland exceed 3/9 per £, while the average rate for the country is very much lower, being about 2/8 per £. I am not prepared to say that to fix a limit for local rates is a wise ex

1 Both sums include capital expenditure.

Edinburgh Chamber of Commerce : Report on Financial Relations of England, Scotland and Ireland, 1898.

3 Abolished 8 and 9 Vict. cap 41..


pedient; what causes my astonishment is the continued increase of a limit which is already in excess of apparent needs. Considering the earnest debates that take place over every halfpenny of adjustment on the imperial taxes, it surely shows a want of appreciation by the legislature of the powers they are conferring on local authorities. In regard to public borrowing also we find that the extent of statutory authority has been made very extensive, although it is only in towns that the manner of using it gives cause for alarm. The great defect is the absence of any effectual restriction on the purposes for which borrowing may take place. According to Police Acts loans may be raised to defray“ any of the purposes” of burghal expenditure, and in the case of drainage, the clauses have been framed with such amplitude that expense of maintenance is enumerated among the purposes for which debt may be incurred. It ought to have been apparent that power such as this would lead to disastrous results in the hands of any but a most long-sighted government. This question of loans is one I shall have to come back upon later in some detail.

The second remarkable feature in this growth of the taxing powers of local bodies is the very inadequate provision made for supervising their management-or let me use a short well-known phrase, for their audit. It is another proof of the hasty manner in which the legislature has proceeded in the domain of local finance that no steps have been taken to insure, in the interests of the various classes of ratepayers, that the exceedingly complicated provisions of the statutes are being complied with. Parish acco nts, for instance, were until three years ago subjected to no compulsory general audit, while in counties there has only been a thorough audit since the establishment of County Councils. Regarding the old Commissioners of Supply an Act of 1868contains a provision which is highly characteristic. Their accounts were to be audited “in such manner as the Commissioners may direct." The audit of burgh accounts is still in a most unsatisfactory condition. Five of the larger burghs elect their own auditor under private acts of parliament, for the others the auditor is appointed by the Sheriff of the district, and theimperfect conception of the importance of the matter which has left its impress on local finance in general is evident also in the choice of burgh auditors. The duties are in common opinion held to be simple enough, and there is every reason for believing that the present system guarantees little more than arithmetical accuracy. Certainly the position taken up by the legislature is not calculated to impress the public with the real intricacy of the subject. Old Police Acts provided for the appointment of a “professional auditor” who was given a power of surcharge. Later this was changed to “competent auditor,” and finally in the act of 1892 we have simply “auditor," and the power of surcharge has been taken away.

Let us now turn to statistics and examine as carefully as possible the manner in which local bodies have administered their powers. Unfortunately in Scotland we are poorly supplied with information. Mr. Goschen’s report of 1870 is nothing more really than an estimate, and it was not till ten years later that full annual returns of receipts and expenditure were demanded from local bodies. The first two of these returns are very incomplete, and especially for the purpose of comparison trustworthy statistics date back no further than the financial year 1883–4. The latest return issued is for 1895-6, giving us a period for survey of thirteen years. The important question must next be decided : shall socalled capital expenditure, that is to say expenditure defrayed by loans, be included or not? For two reasons I have decided to include it. The idea that loans are extraordinary receipts is taken from national finance, and seems inapplicable to local bodies. National loans are incurred at periods of unusual pressure, and may well be regarded as extraordinary items in the budget. Local loans, on the other hand, are resorted to in the course of ordinary business. The nature of local revenues, which are confined to an assessment on one class of property, would make an extraordinary increase in any one year an unsupportable hardship, and further, a legitimate occasion for borrowing is constantly occurring in the demand for expenditure on public works which ought not in jus. tice to fall a burden on a single year. Loans are therefore as regular an item of receipts as any other. For the last three years, for instance, the sums borrowed have been £2,061,000, £2,034,000, and £1,900,000. For this reason alone, it seems erroneous to eliminate capital expenditure, but secondly we find that the only way of doing so is to resort to a complicated estimate. The expenditure out of loans and out of revenue has not been separated in the returns until three years ago, and to arrive at revenue expenditure by itself, as was done, for instance, in Sir John Skelton's Report of 1895 on Local Taxation in Scotland, we should have to make the assumption that the expenditure out of loans for any year is equal to the loans raised during that period, and deduct this amount from total expenditure. In this method, however, no allowance is made for the fact that in all the early returns the sum entered as “money borrowed during the year,”

« НазадПродовжити »