The continued lack of any systematic treatise on the subject has left classification in a most chaotic state. From the point of view of form, merely, this is the most serious defect in Bastable's pioneer treatise on the subject. It lacks uniformity in the methods of classification. In the present work the attempt has been made to use the same method of classification from beginning to end. It is that suggested by Professor Cohn for all public charges, and afterwards developed in a somewhat different way by Professor Seligman.1 The charges made by the government upon individuals vary in character according as the special benefit conferred upon the individual is made the exact or the partial measure of, or is not allowed to affect at all, the burden imposed upon him. Public Revenues and Public Debts have already been classified in this way, and it is very easy to classify Public Expenditure and Administration in the same way.

The nature of this classification and its applicability to the whole subject may be explained by reference to the well-known customs of our large athletic clubs.

For membership, and the usual privileges of the club, each member is assessed the same sum, irrespective of the actual extent to which he uses the club, and without reference to his ability to pay, that being assumed for this purpose to be equal to that of every other member, and certainly without reference to any known ability to pay more. This fee is justified by the common benefit conferred. If, however, the member makes use of the dining-room, or asks for special privileges such as the private use of the club quarters, grounds, boats, appliances, etc., he pays an additional sum, measured, generally speaking, by the special benefit conferred upon him. Again, if the club is in debt, or proposes to enlarge its facilities, not infrequently a subscription paper is passed around and each member is urged to contribute, not the same amount all others have subscribed, nor yet in proportion to the use he makes of the club, but " as much as he is able." And lastly, there are not infrequently cases where poor but promising athletes have been admitted, in order that the club may have the glory of their prowess, and have been excused from dues.

1 Cohn, Finanzwissenschaft, pp. 104-118, esp. pp. 117, 118; Seligman, Quarterly Journal of Economics, May, 1892 and 1895. Hints of the same classifications are found in Malchus and Hoffman.

Now there is an almost perfect analogy between such a club and the State in respect to the contributions demanded, the benefits conferred, and the method of operation. Generally speaking, the State endeavours, in collecting revenues, to impose an equal 1 burden upon all for the support of those functions that are regarded as conferring a common benefit, and a special burden for the support of those activities which confer a special benefit, and under certain circumstances to increase the burden imposed upon the very wealthy, who are regarded as able to bear more ; and lastly, to tax all for the support of the poor. Not that the State always succeeds in its endeavour, nor that all States recognise equally the desirability of the attempt; for in Public Finance expediency necessarily plays a large part. But most States have come to recognise more or less clearly these ideals, and their policy can be conveniently summarised in this way.

1 What is meant by " equal " will be discussed later.

The various activities of the State can be easily classified, according to the degree of common or special benefit they are supposed to confer upon the citizens, or tax-payers. The various groups shade into one another, of course. But the extremes are perfectly clear and fundamentally different. Thus, it is universally admitted that the functions of the general administrative and legislative departments are of such a character as to give a common benefit, for which, ideally, every one should pay according to some scheme of supposed equality. But at the other extreme there are many things done by the State which confer so special a benefit as to justify a special charge. For example, when the State carries a passenger or a box of freight over its railroad, or carries a letter, or provides the citizens with china or tobacco, it confers a special benefit. Between these two extremes there are any number of grades, according as the predominant thought is that of common or special benefit, when both ideas are present. But there is one more consideration that must be introduced. There are a certain number of State activities which it is in the interest of the whole to have performed, but which accrue to the special benefit of certain classes, who on account of poverty are unable to pay for that benefit; and if the State is to perform these functions, it must call upon the other classes for assistance, excusing the poorer. Theoretically, the support of the poor and defective classes is an activity conferring a common benefit upon all the other members of society, and hence they are called upon to contribute accordingly. If we consider it the moral duty of society as a whole to help the weak, then the relief of the poor confers a common benefit. It is the same if we look upon poor relief from a less altruistic point of view, and consider that society is merely protecting its own interest, as, for example, in isolating the feeble-minded, so that they shall not propagate their weakness. Without going farther into details, which will receive attention later in the book, it is now clear that this method provides a feasible way of classifying public activities and public revenues. When we once have a satisfactory classification of revenues, it is easy to classify debts, inasmuch as they rest upon the revenues. The administrative features of the financial bureaux will fall naturally into place also.

A single method of classification, therefore, will pervade the work from beginning to end. The classification will help us to get at the economic features of expenditure, reveal the justification and measure of taxation, and show us the essential character of each kind of public debt; namely, the kind of credit upon which it is based.

It must not be understood that the assignment of any activity to a particular group is permanent. Activities that were once regarded as conferring special benefit — as, for example, a large part of the administration of justice — come in time to be regarded as of common benefit. Such changes often proceed with rapidity, and the stages are not passed through synchronously by all States. There are, for example, many cities whichlet private individuals provide the water supply. Others provide it themselves, precisely the same terms as individuals would, while others provide it much as they do other special privileges, regarded as conferring both special and common benefits; and very probably the time is near when most large cities will regard it quite as much a matter of common benefit to provide each and every citizen with at least a certain amount of water at the cost of the general taxes, as they now regard it a matter of common benefit to dispose of the sewage, a function which was once considered the duty of each citizen, and is still so regarded in many cities. But however mutable our classes may be, they are clearly discernible, and it is generally only by slow degrees that we find cities proceeding from one end to the other of the systematic grouping. While there seem to be general tendencies, which transfer all activities from the special benefit to the common benefit plan, there are a tew exceptional cases where the movement is the other way. The support of religion is such an instance. Originally almost the sole object of State expenditure, this has now, after passing through various ups and downs, come to be regarded as of such special benefit that it is being gradually excluded from the sphere of the State, and left to private support.