PENDING PROBLEMS IN PUBLIC FINANCE 



BY EDWIN ROBERT ANDERSON SELIGMAN 



[Edwin Robert Anderson Seligman, McVickar Professor of Political Economy, 

 Columbia University, b. New York City, April 25, 1861. B.A. Columbia, 

 1879; Ph.D. ibid. 1884; LL.B. ibid. 1SS4; LL.D. ibid. 1904; Post-Graduate, 

 Universities of Berlin, Heidelberg, Geneva, Paris, 1879-82. Lecturer in 

 Political Economy, Columbia University, 1885-88; Professor of Political 

 Economy and Finance, ibid. 1891-1904. Former President of the American 

 Economic Association; American correspondent of British Royal Economic 

 Society; corresponding member of the Paris Societe d'Economie Politique, and 

 of the Russian Imperial Academy of Science; President of Society for Ethical 

 Culture. Author of many books and articles on railway, tariff, taxation, eco- 

 nomics, and public law.] 



IN addressing myself to the task of presenting a survey of the 

 practical problems of public finance I am naturally confronted by 

 the difficulty that the actual problems assume a different aspect in 

 various countries, an aspect largely colored by fluctuating political, 

 economic, and social conditions. Notwithstanding this diversity, 

 however, there can be discerned an underlying uniformity in the 

 modern fiscal development of civilized nations, and it will be my 

 endeavor to point out some of the different phases of this develop- 

 ment. 



To discuss all the modern problems of finance would be impossible 

 within the limits of a single paper. Whole groups of subjects mani- 

 festly must be omitted. The topic of expenditure, for instance, 

 may be passed over entirely, for the reason that expenditure is chiefly 

 statesmanship; the fiscal principles here are principles of interpreta- 

 tion rather than of construction. Again, the subject of public credit 

 has been so thoroughly elaborated that the scientific problems which 

 await elucidation are comparatively few and unimportant. The 

 budget, also, while susceptible of undoubted improvement, espe- 

 cially in the theory of municipal accounting, is so closely intertwined 

 with administration that it would be hopeless to attempt in this 

 place to disentangle it. Finally, in the great domain of public 

 revenue, the subject of income from government industry is of pre- 

 dominant economic, rather than fiscal, importance, and may thus 

 fitly be excluded from our short survey. There thus remains only 

 the field of taxation, a field broad enough and sufficiently hedged 

 about by difficulties to warrant a closer examination. 



There are three considerations which distinguish the modern 

 science of finance in the study of tax problems. These are, in order, 

 the pursuit of justice, the emphasis put upon the modern economic 

 phenomena, and the insistence upon the conformity with economic 

 principle. Let us consider each of these in turn. 



