The Subvention In The State Finances Of Pennsylvania

The subvention has been used in England and in the United States to equalize revenue resources between state (central) and local governments; to equalize the burden of supporting a given service between different localities; and to gain for the central authorities power of supervision over local administration. Finally in the United States it has been used to aid semi-public institutions of an eleemosynary character. An indepth dessertation work on the subvention State Finances Of Pennsylvania follows.

Title	The Subvention In The State Finances Of Pennsylvania
Author	Frederic B. Garver
Publisher	George Banta Publishing Company
Year	1919
Copyright	1919, Frederic B. Garver

The University of Chicago

THE SUBVENTION

IN THE STATE FINANCES

OF PENNSYLVANIA

A DISSERTATION

SUBMITTED TO THE FACULTY

OF THE GRADUATE SCHOOL OF ARTS AND LITERATURE

IN CANDIDACY FOR THE DEGREE OF

DOCTOR OF PHILOSOPHY

DEPARTMENT OP POLITICAL ECONOMY

FREDERIC B. GARVER

The Collegiate Press

GEORGE BANTA PUBLISHING COMPANY

MENASHA, WISCONSIN

1919

THE SUBVENTION

IN THE STATE FINANCES

OF PENNSYLVANIA

A DISSERTATION

SUBMITTED TO THE FACULTY

OF THE GRADUATE SCHOOL OF ARTS AND LITERATURE

IN CANDIDACY FOR THE DEGREE OF

DOCTOR OF PHILOSOPHY

DEPARTMENT OF POLITICAL ECONOMY BY

FREDERIC B. GARVER

The Collegiate Press

GEORGE BANTA PUBLISHING COMPANY

MENASHA, WISCONSIN

1919

Chapter I. Introduction. The Division of Functions between State and Local Governments: It is a fundamental principle of the distribution of powers within the several states of the federal union that local governments, such as the city, county, township and school-district, have no ...

Occasions Giving Rise to Subventions: The problem is how to attain the proper amount of central supervision to insure adequate performance of services that seem best administered by local governments. In England this problem has ...

Occasions Giving Rise to Subventions. Continued: A third reason for the existence of the grant in aid is that it permits an equalization of the burden of supporting a given service. The subvention for common schools illustrates this point. It ...

Chapter II. The Division Of Governmental Functions And Of Revenue Resources In Pennsylvania: The Division of Functions Between the Central and the Local Governments As was pointed out in the preceding chapter, the development of a system of subventions is conditioned by the ...

The Division of Functions Between the Central and the Local Governments. Part 2: The charter that Penn received from Charles II gave the proprietor power to establish such local authorities as the town, county, borough, and city. *2 Three important local units were actually ...

The Division of Functions Between Governments. Part 3: Pennsylvania's system of poor relief, in the beginning, followed in general the practice of the English counties. A law enacted in 1682 required the justices of the peace to care for the ...

The Division of Revenue Resources: While the distinction between state and local services was thus becoming definitely fixed, both by legal enactment and by custom, the revenue systems of the different governmental units ...

The Division of Revenue Resources. Continued: Although the state was unable successfully to collect the direct tax, two events relieved the government of a major portion of the debt and placed it in possession of a large amount of wealth. ...

Chapter III. The Beginnings Of The Subventions: Definition and Classification of Grants and Subventions Before entering upon the consideration of the history of grants made before 1826, it is necessary to define several terms which ...

The Financial Policy of Pennsylvania, 1776 to 1826: The financial history of Pennsylvania from 1776 to 1826 may be roughly divided into three periods. The first, from 1776 to 1793, is characterized by heavy expenditures for war, by the creation ...

Grants for Education, 1776 to 1826: One of the first objects to which the State of Pennsylvania turned its attention on emerging from the revolutionary struggle was public education. In fact, the first constitution, adopted in ...

Grants for Education, 1776 to 1826. Continued: (a) In 1805 the academy was granted certain property formerly granted to the trustees of Center County. It is noticeable that the policy of granting lands to academies when they were ...

Grants for Charity: Poor relief in Pennsylvania, as has been pointed out, *26 became a local charge at the organization of Penn's government. During the century following, relief of the indigent included not only ...

Grants in Aid for Roads and Bridges: From the earliest times in Pennsylvania, two kinds of roads were recognized. The Assembly controlled all King's Highways, while other roads were subject to local jurisdiction. Later ...

Other Grants and Subventions, 1776 to 1826: During colonial times it was not unheard of for the central government to assist the local governments in almost any undertaking involving the expenditure of money. But such general grants were ...

Chapter IV. The Beginning Of Permanent Annual Grants For Education And For Charity, 1826 To 1843: The Financial Policy of the State, 1826 to 1843 The financial arrangements which characterized this period of the state's history were so unusual and had such important effects upon ...

The Financial Policy of the State, 1826 to 1843. Part2: Income From Revenues And From Loans For Certain Years 1826 to 1842. (in thousands of dollars) 1826 1830 1835 1842 ...

The Financial Policy of the State, 1826 to 1843. Part 3: The probable effect of the reckless and unsound financial policy of the state during these years upon the amount and character of the subventions cannot be readily determined. At first sight it ...

Grants for Charity, 1826 to 1844: The first local service to receive aid from the state treasury, during this period, was that of charitable relief. But it must not be supposed that the state contributed to the support of common ...

Grants for Charity, 1826 to 1844. Part 2: As was pointed out in Chapter III, the first attempt on the part of the state to provide special treatment for defectives ...

Grants for Charity, 1826 to 1844. Part 3: The relative share of the state in the cost of operating the two schools is shown by the table on the following page. From all appearances *27 the older institution had been more liberally dealt ...

Grants for Charity, 1826 to 1844. Part 4: In the case of the Institution for the Blind, as can be seen from the table on page 48, the tendency of private giving was just the opposite. As the school grew older and the state appropriation ...

Grants for Charity, 1826 to 1844. Part 5: In 1827 the subscribers succeeded in convincing the legislature that the service they were rendering was of sufficient public interest to justify assistance from the central treasury, and a ...

Grants for Charity, 1826 to 1844. Part 6: So brief are the financial statements contained in the annual reports that it is difficult to draw conclusions concerning the effect of the state subvention upon the finances of the institution. ...

The Establishment of the Permanent Annual Subvention to Common Schools: The first great movement for free schools in Pennsylvania came at the time of the Revolution. The influence of the forces then at work caused the legislature to pass the land-grant act of 1786 ...

Permanent Annual Subvention to Common Schools. Part 2: In 1824 the legislature passed a law to provide more effectually for the education of the poor gratis, and for laying the foundation of a general system of education throughout the ...

Permanent Annual Subvention to Common Schools. Part 3: The history of the Pennsylvania school fund is difficult to trace. After 1836 it received additions from the bonus paid by the Bank of the United States and from similar sources, *65 and it was ...

Permanent Annual Subvention to Common Schools. Part 4: A district, in Pennsylvania, usually contained several schoolhouses. It is difficult to understand why the county convention was included in the machinery of the new system. The commissioners, ...

Permanent Annual Subvention to Common Schools. Part 5: As was the case with the subsidies for charity, the subvention for common schools varied in amount according to the prosperity of the state treasury. Table I shows a marked increase in the ...

Permanent Annual Subvention to Common Schools. Part 6: In 1838 the legislature, seeking to provide permanently for the school system, enacted that the amount of the state subvention should, in the future, be one dollar for each taxable inhabitant ...

Permanent Annual Subvention to Common Schools. Part 7: The state superintendent met these and other similar arguments for withholding the subvention with the simple statement that a withdrawal of state aid at that time might easily cause the ...

Permanent Annual Subvention to Common Schools. Part 8: A third characteristic of the subvention was the almost complete absence of central supervision of the service aided. With regard to earlier occasional grants to colleges and academies, and in ...

Permanent Annual Subvention to Common Schools. Part 9: The organized opposition to the new system came chiefly from Old Pennsylvania, that is, the eastern and southeastern parts of the state, while the northern counties and the newer ...

Permanent and Occasional Subventions to Academies, Seminaries and Colleges, 1826 to 1844: There was no important change in the policy of the state toward academies and colleges until 1838. Table I in the appendix shows that in 1830, 1831, and in 1833, no payments were made to ...

Subventions to Academies, Seminaries and Colleges. Continued: Practically no limitations were placed upon the grant. With respect to curriculum it was required merely that teachers must be employed capable of giving instruction in Latin, Greek, mathematics ...

Miscellaneous Occasional Grants, 1826 to 1844: In the preceding sections of this chapter permanent and occasional subventions to charity and to reformatory institutions, the permanent grants in aid and the occasional subventions to education ...

Chapter V. The History Of Subventions From 1844 To 1873: The Financial Policy of the State, 1844 to 1873 The year 1844 marks the end of the period of expansion of the Pennsylvania system of state works and, therefore, the end of one epoch of ...

The Financial Policy of the State, 1844 to 1873. Part 2: The interest payments due each year until 1859 amounted annually to approximately $2,000,000 for the funded debt alone. Previous to 1847 the state did not meet the entire interest charge from ...

The Financial Policy of the State, 1844 to 1873. Part 3: 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 ...

The Financial Policy of the State, 1844 to 1873. Part 4: In 1844 was passed the act that laid the foundation of the present system of taxation in Pennsylvania. *5 This law levied a direct state tax upon real estate; upon certain personalty, including ...

The Financial Policy of the State, 1844 to 1873. Part 5: The Grant in Aid to Common Schools The years 1834 to 1844 witnessed the beginnings of the common school system. As was pointed out in the last chapter, the introduction of the state system, ...

The Financial Policy of the State, 1844 to 1873. Part 6: As may be seen at a glance, the local levy of taxes for the support of the common schools increased steadily throughout the eleven years under consideration. The subvention, on the other hand, ...

The Financial Policy of the State, 1844 to 1873. Part 7: But the most real financial difficulty that embarrassed the districts was the burden of state taxation imposed upon real and personal property by the Act of 1844. The school tax was levied upon ...

The Financial Policy of the State, 1844 to 1873. Part 8: It is noticeable that after the state tax on real estate was removed, in 1866, the local levies for school purposes increased very rapidly. But the period of large annual additions had begun ...

The Financial Policy of the State, 1844 to 1873. Part 9: On the whole, the fact that in two public reports, separated by six years, considerable space is given to the misapplication of the state subvention is good evidence that such practices did ...

The Financial Policy of the State, 1844 to 1873. Part 10: An examination of the reports of the state superintendent reveals only a small number of cases in which the subvention had been forfeited for this cause. *40 But the number of districts that ...

The Financial Policy of the State, 1844 to 1873. Part 11: In 1863 the legislature attempted to change the method of distribution and enacted that thereafter the grant should be distributed to each district in proportion to the number of pupils ...

The Financial Policy of the State, 1844 to 1873. Part 12: Again, it is apparent that although the burden of taxation, as shown by the tax rates, was much heavier in Potter and in Sullivan counties, the school revenue per child accruing from these taxes ...

Subventions to Normal Schools: One of the principal difficulties encountered during the early years of the common schools was the dearth of good teachers. Even before the establishment of the state system, in 1834, the need ...

Subventions to Normal Schools. Part 2: A period of four years had thus elapsed and only two schools had been recognized. There can be no doubt that the establishment of the normal schools was slower than had been anticipated, and ...

Subventions to Normal Schools. Part 3: It is needless to observe that this was a very complex subvention. It was at once a subvention to a private corporation, an aid to teachers and students, and a military pension. The grant to ...

Subventions to Normal Schools. Part 4: The revelations concerning the Bloomsburg school caused the passage of more stringent regulations for the management of the schools and the adoption of a different method of making the ...

Subventions to Other Educational Institutions: Subventions to privately owned educational institutions, other than normal schools, were neither numerous nor important during this period. Several grants of large amounts were, it is true, made ...

Subventions to Other Educational Institutions. Continued: Judged by the criteria of public finance, the subvention to the Farmer's High school was the best that was made during this period. The service aided was of state-wide importance; it was one ...

Subventions to Private Charitable Institutions: During the years 1844 to 1859 subventions to private charitable institutions increased very slowly. The financial difficulties of the state, due to the failure of the state works, tended to ...

Subventions to Private Charitable Institutions. Part 2: A third type of service to receive state aid before 1860 was the relief of orphaned or friendless children. In 1857 the Orphan Asylum of Lancaster received an unconditional grant of $1,000 ...

Subventions to Private Charitable Institutions. Part 3: The progress of the subventions for charity from 1844 to 1859 is shown in the following table. Subventions For Charity, 1844 To 1859, Inclusive *1 ...

Subventions to Private Charitable Institutions. Part 4: The growth of the old subventions and the development of the new resulted in an increase of the total subventions paid to charitable institutions from $153,827, in 1860, to $804,280, in 1873, or ...

Subventions to Private Charitable Institutions. Part 5: The war gave rise to another class of dependents whose maintenance cost the state more than all others combined. These were the orphans of the men who served in the Pennsylvania regiments. At ...

Subventions to Private Charitable Institutions. Part 6: Such were the theoretical conclusions of the committee, but their practical recommendations were surprisingly mild. They advised that no appropriation should be made to an institution that had ...

Subventions to Private Charitable Institutions. Part 7: One of the principal objections to the subventions to charity, as they existed in 1868-69, was the planless, capricious manner in which they were made. Certain institutions had received a single ...

Subventions to Private Charitable Institutions. Part 8: It is obvious that the board was not created to exercise administrative powers. No institutions were placed under its control; it could not coerce those that failed to comply with the law; and ...

Subventions to Private Charitable Institutions. Part 9: Finally the argument ignored the saving that might come from centralized administration of the service. If the state had taken over the relief of these dependents it could have assembled them in ...

Subventions to Private Charitable Institutions. Part 10: In this connection we shall discuss only those sections of the new constitution that dealt with appropriations to private institutions. The first restrictive section *174 provided that no ...

Subventions to Private Charitable Institutions. Part 11: Section 18 of Article III imposed further restrictions upon the power of the legislature to make subventions to privately owned and managed institutions. *184 This section reads, No ...

Chapter VI. The Relation Of State And Local Finances, 1874 To 1916: The Distribution of Governmental Functions Changes in the number and importance of the services performed by the state and local governments during this period were of three sorts. ...

The Development of State Taxes on Corporations: The basis of the present system of state taxes in Pennsylvania is found in the act of 1844. *9 This act included or added to all the earlier taxes for state purposes and gave the state a system ...

The Development of State Taxes on Corporations. Part 2: The demands of the agricultural interests had now been satisfied and for nearly two decades no serious complaints of a lack of revenue for local purposes reached the legislature. It is pertinent ...

The Development of State Taxes on Corporations. Part 3: The decade 1880 to 1890 was not marked by important tax legislation until near its close. But about the middle of the period an agitation for heavier taxes upon corporations sprang up. In 1885, ...

The Equalization of Revenue Resources between the State And The Localities: The problem of making a proper distribution of revenue resources between the state and the localities, in Pennsylvania, is, as was shown in the preceding section, closely connected with the ...

The Equalization of Revenue Resources. Part 2: The same legislature that provided for the appointment of the commission of 1889 undertook to bring about a slight equalization of revenue resources by providing for the return of one-third of ...

The Equalization of Revenue Resources. Part 3: The State Grange has, in recent years, consistently advocated the increase of appropriations for the assistance of the local governments. The policy is well expressed in the followng excerpt ...

Chapter VII. The Subventions For Education, 1874 To 1916: The State System of Common Schools in 1874 In 1874 the state system of common schools had been in operation for forty years. During these four decades the extreme local autonomy that ...

The Financing of the School System: Viewed from the state superintendent's office, or from the position of an advocate of efficient schools, it is largely a matter of indifference what shall be the source of the funds for ...

The Financing of the School System. Part 2: The total expenditures for all school purposes, including the expenses of school boards and the cost of collecting taxes, as well as the payments for teachers' salaries, and for building ...

The Financing of the School System. Part 3: In 1889 the districts paid out $8.65 per child for teacher's wages.20 In 1916 the expenditure for the same purpose amounted to $20.58 per child. This increase was due chiefly to higher salaries, ...

The Financing of the School System. Part 4: But the reasons just given for the growing cost of public education do not account for the relatively more rapid increase of the state's share in its cost in Pennsylvania. Writers on educational ...

The Financing of the School System. Part 5: In order that a large subvention shall mean better educational opportunities for all the children of the state it must be so distributed that the weaker, or less wealthy districts receive enough ...

The Financing of the School System. Part 6: In spite of the perpetual war waged upon it by the state superintendent, the method of distribution according to taxables persisted until 1897. The change was slow in coming because of the ...

The Financing of the School System. Part 7: That distribution according to the number of teachers employed should favor the sparsely settled communities is easily understood. A district that contained only three or four schools, in each ...

Regulations Imposed by the State upon Districts Receiving the Subvention to Common Schools: During the years 1887 to 1916, while the annual state appropriations increased from about $800,000 to over $6,000,000, the state gradually-made the conditions upon which the districts received ...

Subvention Regulations. Common Schools. Part 2: No further changes were made in this requirement until ten years later, when the School Code was adopted. By this act the existing minimum of seven months was retained for the rural districts, ...

Subvention Regulations. Common Schools. Part 3: It may be asked whether there was any justification for the demand for higher wages for teachers. This question the superintendent answered by pointing out that a majority of the teachers were ...

Subvention Regulations. Common Schools. Part 4: After the fall in the purchasing power of money began to reduce the real wages of teachers the demands of the state superintendent that salaries be increased became more insistent. In 1902 he ...

Subvention Regulations. Common Schools. Part 5: Two highly desirable results came from the act of 1907. In the first place the districts were able, with the aid of the state, to pay higher salaries. In the second place the higher salary which ...

Subvention Regulations. Common Schools. Part 6: The discussion of methods of distributing the state appropriation and of attempts to induce the localities to improve the schools by maintaining longer terms and by paying better salaries to ...

Subvention Regulations. Common Schools. Part 7: In 1901, an entirely new act was passed, which not only required the attendance of all children between the ages of eight and sixteen years, but also placed in the hands of the state ...

State Aid to High Schools: The establishment of high schools in Pennsylvania preceded the first special state appropriation for their benefit by more than sixty years. Philadelphia was authorized to organize and to ...

The Subvention to Normal Schools; Its Abandonment for State Ownership: When the law authorizing the state normal schools was enacted, in 1857, it was believed that institutions for training teachers would be financially successful under private control. Within a ...

The Subvention to Normal Schools. Part 2: But the normal schools also received aid indirectly in another way. Students who were willing to agree to teach a certain length of time in the common schools received from the state treasury a ...

The Subvention to Normal Schools. Part 3: This rule proved unacceptable and at the next session of the legislature its application was limited to questions involving the sale or purchase or mortgaging of real estate, or the expenditure ...

The Subvention to Normal Schools. Part 4: Several points of importance stand out in the history of the state subvention to normal schools. The first and most significant is the failure of the state to secure adequate service from ...

The Subvention to Normal Schools. Part 5: Accordingly, the state superintendent refused to pay the appropriation and the legislature apparently agreed, for thereafter no subvention was made to the school. This case is significant ...

Miscellaneous Subventions for Education; the State School Fund: In addition to the important subventions to common and normal schools and to colleges, the state now distributes a large amount annually to learned societies and organizations that contribute to ...

Subventions for Education; the State School Fund. Part 2: After the disappearance of the first school fund, during the years 1840 to 1844, Pennsylvania made, until recently, no attempt to provide a permanent endowment for her common schools. In 1911, ...

Subventions for Education; the State School Fund. Part 3: The lack of system in the appropriations is, however, found in the subventions to that part of the school system which is completely under state and local control, namely the common public ...

Chapter VIII. Minor Grants To Local Authorities: Subventions for the Encouragement of Agriculture and for the Protection of Life and Property In addition to the principal subventions for the advancement of education the state of ...

The Subvention for the Construction and Maintenance of Highways: After the failure of the internal improvement system Pennsylvania ceased to build or to assist in building roads. There were occasional exceptions to this statement, as for instance when a ...

The Construction and Maintenance of Highways Subvention. Continued: Four years later the law of 1905 was thrown on the scrap heap as unworkable and ineffective. The legislature now passed an act by which the State took over a large number of the most frequently ...

Chapter IX. Subventions For Charity, 1874 To 1916: The Growth of the Subventions for Charity, 1874 to 1916 Subventions for charity from the Pennsylvania state treasury at the present time are paid in part to the counties and in part ...

The Growth of the Subventions for Charity. Part 2: The extent of the state's payments for institutions directly under its own control and the growth of such payments from 1891 to 1916 are shown in the table on the following page. ...

The Growth of the Subventions for Charity. Part 3: Large subventions to privately managed concerns are further facilitated by that clause of the constitution which requires the appropriation to each charitable institution to be voted upon as a ...

The Growth of the Subventions for Charity. Part 4: Large appropriations to these institutions have also been due in the past to political manipulation. It has been asserted, *19 and never successfully denied, that the appropriations have been ...

The Growth of the Subventions for Charity. Part 5: In recent years newspaper comment on the subject has been frequent. At times it has been plainly stated that the making of appropriations has involved political support. *27 In 1905 the Board ...

The Constitutionality of the Grants: Two sections of Article III of the present constitution of the state deal especially with appropriations to charitable institutions. The first provision is as follows: Article III, Section 17. &...

The Constitutionality of the Grants. Part 2: That part of Article III, Section 18, which prohibits appropriations for charitable or benevolent purposes to any person or community or to denominational or sectarian institutions has never ...

The Constitutionality of the Grants. Part 3: Now the constitution does not prohibit appropriations to all private institutions of a charitable character, but only to those that are sectarian or denominational. As the first step in ...

The Effect of the Subvention Policy upon the Development of State Institutions: To a certain extent the privately managed charitable institutions that the state subsidizes duplicate the services provided by state institutions. This is true in the case of the semi-private ...

Subvention Policy. Development of State Institutions. Part 2: In addition to reformatories, asylums for the insane and feebleminded, and the hospitals for injured miners, the state also supports sanitoria for tubercular patients. In 1916 over $1,300,000 ...

Subvention Policy. Development of State Institutions. Part 3: The reports of the board for subsequent years also contain references to the neglect of the defective classes by the legislature. *78 In 1902 the state was badly in need of an asylum for the ...

Subvention Policy. Development of State Institutions. Part 4: On the whole, the admissions of the secretary amounted to a confession of inefficiency and mal-administration in the management of the local asylums. He was unwilling, however, to recommend the ...

Subvention Policy. Development of State Institutions. Part 5: If, however, it be assumed that the expenditure for some of the various services now supported by the state could not be reduced without serious impairment of those services, it is still true ...

Grants for Permanent Improvements: A relatively large proportion of the amounts appropriated to aid private charities has been devoted to making permanent improvements. This has been especially true in the case of hospitals. The ...

State Subventions to Counties: The state now assists the counties in the maintenance of charitable relief with respect to two classes of dependents: (1) the insane, and (2) indigent widows and abandoned wives who have ...

Distribution of the Subvention to Charitable Institutions: The distribution of the subvention to private charitable institutions is not made, at the present time, according to any rule or predetermined scheme, except in the case of the appropriations to ...

Should the Subvention to Private Charitable Institutions Be Discontinued?: As was shown in the first section of this chapter, the last twenty-five years has witnessed a steady growth of the subvention to private charitable institutions. Along with the increase in the ...

Appendix: Table I: Subventions for Education and to Charitable Institutions, 1826-1843 *1 (in thousands of dollars) Year2 <...

Subvention Bibliography: I. Books and Magazine Articles Allinson, Edward Pease and Penrose, Boies. Philadelphia, 1681-1887. Johns Hopkins University Studies in Historical and Political Science, ...

Subvention Bibliography. Continued: II. Pennsylvania Public Documents Auditor General. Annual Reports on Finances, 1809- Board of Commissioners of Public Charities. Annual Reports, 1869- Bureau of ...

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		The Subvention In The State Finances Of Pennsylvania \| by Frederic B. Garver

The Subvention In The State Finances Of Pennsylvania | by Frederic B. Garver