In the English language, at least, no definite meaning is attached to the word "finance." A descriptive adjective is often needed to clarify the intended meaning and to avoid ambiguity. Such expressions as "private finance," " corporation finance," "high finance," and "public finance" are common in the daily newspapers. There are treatises on corporation finance, for example, which explain the nature and business methods of corporate organizations. The use of the term "finance" in connection with a firm, business, or individual frequently has reference to the condition of the capital or assets, as, for example, "the finances of this business are in good condition."

The ambiguity which arises with the use of the word "finance," unmodified, may be avoided when the use of the adjective is contemplated. Two forms of the word appear - "financial" and "fiscal" - and a uniform use of the words for particular meanings would be conducive to clearness. The word "financial" has had no definite meaning. A financial magazine, for example, treats of stocks, bonds, dividends, and similar items, while the financial condition of a country has to do with its money, credit, and banking. The word "fiscal," however, has usually had a more definite meaning, although its use has not always been clearly separated from that of "financial." For the most part, however, "fiscal" has been used in referring to the expenditures and revenues of political bodies. A financial year, for example, might refer to any number of conditions, while a fiscal year more definitely refers to the revenues and expenditures of a political unit for a particular period of time. The fiscal year of the Federal government begins July 1st and ends June 30th. In this book the word "fiscal" will be used to refer to conditions which are related to revenues and expenditures of political bodies.

Public Finance is primarily concerned with fiscal aspects, yet these aspects are often substantially influenced by financial circumstances. A sound and efficient banking and currency system, for example, materially aids in the collection and expenditure of public revenues. It may not always be possible, indeed, to separate the fiscal from the financial conditions, as when, in times of war, a government issues fiat money or treasury notes for the purpose of securing funds. Fiscal authorities are likewise concerned about the financial conditions of industries, because it is to productive enterprises that they must turn as an important source of revenue. Panics and crises, moreover, do not affect industries alone, but the fiscal condition of political bodies as well. A distinction can generally be drawn between aspects of a fiscal and of a financial nature, and our concern in this book will be with the former - aspects which deal with expenditures and revenues of governments.