PART 2. FINANCIAL ORGANIZATION OF GOVERN- 
MENT IN THE UNITED STATES 
CONTENTS 
Page Page 
Existing American social and political institu- - Finances of the counties, towns, and other 
YOY OY Sus (SION sip EID as mor RR ge a iene Ye ob 7 subordinate governments______.-__-----__-_ 
Finances of the Federal Government--_-_-.--.-- 20 | Finances of forest and agricultural communi- 
Finances of the States____._---__------------ 22 LCS ea NN AR AL SI SIR RPC I BU Ue 
Functions and expenditures_____--__---_ 22 General description of the samples se- 
Grants by the States to their subordinate J ETON HYG Ue ane A Ne PO A RA EOLA a 
governments. 25.222 Ue Soke eee ee 23 Governmental cost payments____.._____- 30 
FUG VET ICS ree as UOT Ol BERLE Ek 24 IVC VETTES BES Eis Wh iL a ee RANE 33 
YD YT) By PRR ea a A ge Se ea I Se 25 Decadent localities...............----.-- 37 
EXISTING AMERICAN SOCIAL AND POLITICAL 
INSTITUTIONS 
The discussion of the forest-tax problem contained in this report 
is predicated upon fundamental American social and political insti- 
tutions as they exist at present. 
The institutions of private property, personal liberty, and indi- 
vidual freedom in the economic field, are taken for granted. Spe- 
cifically it is assumed that economic motives—generally functioning 
through the search for profits—operate as the chief propelling force 
in the forestry business, as in other businesses. Altruistic motives, 
such as a desire to promote the public welfare, are to be reckoned 
with and may be controlling in exceptional cases, but in general 
there is no reason to expect privately owned forests to be run on 
other principles than those generally accepted in business manage- 
ment. 
This study similarly recognizes the existing political organization 
of the United States, with a Federal Government, sovereign States, 
and various local governments, having their respective spheres of 
powers and duties prescribed by constitutions and laws, and operat- 
ing through the machinery of representative government. 
The resulting financial organization of government particularly 
affects the premises of this study. Intelligent investigation of the 
problem of forest taxation obviously requires, as a prerequisite, an 
elementary appreciation at least of the functions performed by the 
several grades of government, the sources from which they derive 
their revenues, and the functional and financial relations between 
them. The present part seeks first to present such an elementary 
picture of American financial organization. After this general pre- 
sentation, there will follow some discussion of the finances of repre- 
sentative ‘forest communities, including comparison with agricultural 
communities in the respective States. 
101285°—35——2 17 
