Since the second year of the Civil War the receipts of the national government, aside from loans, have been largely derived from import (tariff) and excise (internal tax) duties. From approximately sixty million dollars in 1860 the annual ordinary receipts of the national government rose to three quarters of a billion dollars in 1914, and, under the stress of the Great War, to something like eight billion in 1919. The expenditure of these vast sums has taken a multitude of forms. During the last year prior to the outbreak of the War in Europe in 1914 the ordinary expenditures were as follows:

It is to be noticed that federal expenditures are undertaken primarily for national defense; that is, the federal government assumes the duty of protecting state and local governmental units from foreign interference, leaving them free to manage their own affairs: about 70 per cent of the entire expenditures go directly or indirectly to war purposes.