The Differences in Purposes. 
827 
<of various kinds of taxation. 3 The money raised in this way 
is not “ invested,” in the strict sense of that term, that is, used 
as capital for the purpose of creating additional wealth, but is 
consumed by the paying of salaries to the administrative agents 
and the erection of public works. This does not exclude, how¬ 
ever, the indirect facilitation, by means of this species of con¬ 
sumption, of the production of wealth on the part of private 
producers. In fact, one of the principal objects of government 
and public administration must be such facilitation. But di¬ 
rectly public business deals only with consumption. 
From this circumstance it follows that such principles of the 
conduct of private business, as have their basis in the fact that 
such business has for its object the production of wealth, are 
not applicable to public affairs. What these principles are, will 
be inquired later. 
2. The persons having to deal with public business are invar¬ 
iably in the position of trustees, managing affairs not their 
own, while in private business the opposite is the rule. 
To avoid misunderstanding, it may not be amiss to warn 
against the confusion of trustees in the sense in which it is 
used here (which is of course not the strict legal sense), and 
employees. Private business, of course, is conducted to a very 
large extent by employees, who may have a very large amount 
of discretion; yet the real direction always lies in the hands 
of the proprietor, against whose decision there is no recourse. 
In public administration, there is not only a class of employees, 
whose discretion, if they have any, is of a limited kind, but the 
direction of affairs itself is in the hands of parties who are not 
themselves the owners of the enterprise, but who for a time 
represent the owners, that is the whole body of the citizens, 
and over whom, while they are in office, the owners have no 
direct control. In private business, this condition of things is 
approximated in the case of corporations, where the ultimate 
owners, to-wit, the stock-holders, are represented by the di- 
3 There is an exception to this rule in cases where municipalities and other 
public agencies conduct productive enterprises, as water and gas works, 
etc. But these cases are, in this country at least, of little importance and 
may be disregarded for the purposes of this disquisition. 
