These three tables show the importance of the role played by the debt in state finance. During the years 1844 to 1855 the interest charge absorbed the greater part of all tax revenues collected by the commonwealth. After 1858 the reduction of the debt resulted in a diminution of the interest charge and made possible a more liberal policy of expenditure for other purposes. The following table shows the course of state expenditures during the years 1861 to 1873:

State Expenditures, By Purpose, For Certain Years, 1861-18731

(in thousands of dollars)

Purpose

1861

1865

1870

1873

General Government..............................

449 2,359 154 345 483 1,918 134

616 382 329 355 1,904 1,995 208

826 36

9253

649 1,790 1,865

344

1,402444

Military....................................................

86

Charitable................................................

9705

Educational..............................................

804

Redemption of Loans............................

1,552

Interest on Loans....................................

1,563

All Other..................................................

357
   

Total..............................................

5,8422

5,789

6,435

6,734
   

1 No attempt has been made in this tabulation to classify the payments from the state treasury in accordance with the principles of governmental accounting, since adequate information for such a classification is wanting. The figures of the Auditors General have been reproduced, except that a number of items have been combined in "Charitable," "Educational," and "All Other."

2 $31,000 refunded taxes have been excluded; otherwise the total is as given by the Auditor General's Report.

3 Includes $508,000 for Soldiers' Orphans' Schools.

4 Includes $411,000 for the expenses of the constitutional convention of 1872-1873.

5 Includes $469,000 for Soldiers' Orphans' Schools.

The most significant facts brought out by this table are the reduction of the interest charge, the large amounts devoted to the reduction of the , debt, the increase of the cost of general government by over 100 per cent, (excluding the unusual item for the constitutional convention) and, finally, the growth of expenditures for charitable and educational purposes. These last are largely subventions. All these increases indicate a more liberal policy of state expenditure.

In order that the total expenditure might increase from $2,690,000 in 1850 to $5,842,000 in 1861 and to $6,734,000 in 1873, while the amount of the debt was decreased nearly $15,000,000, revenues must have increased proportionately. The next step in outlining the financial policy of the state is, therefore, to discover the sources of this revenue and to ascertain, if possible, the new distribution of revenue resources between state and localities that resulted from the development of the state system of taxation.