Great Britain has worked out a more detailed system for handling her fiscal operations than, perhaps, any other country, and her system has been adopted almost in its entirety by India and Egypt. Because of the degree of perfection which is found in this organization, and because of the influence it has had in the formulation of other fiscal programs, it deserves a somewhat detailed exposition.

Formation and Passage of Budget. - The British fiscal year begins April 1st. Each year is complete in itself, and no appropriations hang over from one year to the next. The various departments of the government make estimates of expenditures which form the basis for the figures of the Treasury Department. These estimates are made up at the request of the Treasury Department about December 1st. They are then compiled and reviewed by the Chancellor of the Exchequer, who has the power to reduce them. Should the Chancellor not agree with the Treasury Department, appeal is made to the Prime Minister as arbitrator.

With the list of revenues which has been prepared by the Treasury Department, a balancing of possible receipts and expenditures is undertaken. The result is some wellformulated plan - one which usually makes provision for a rather large surplus. It then becomes the duty of the King to lay the proposed fiscal scheme before Parliament. The estimates are printed in well-organized and summarized form, and placed in the hands of each member of Parliament, where it becomes the duty of the Prime Minister to pilot the bill, while its various items are defended by the Chancellor, who is a member of the House of Commons.1

The various divisions of the budget, usually about one hundred and forty in number, are acted upon by the House as a committee of the whole. Each section is discussed and voted on. Items may be reduced but cannot be increased except under closely restricted conditions. Much debate marks the discussion of these items, and frequently wanders far afield from the subject of the budget. After the bills have been made acceptable to the committee, they are passed in Parliament proper, under the title of the Consolidated Fund Act; this is usually accomplished before the end of the fiscal year. The passage of the appropriation measure is followed later by a finance Act which levies the taxes for the year.

Classes of Expenditures and Revenues. - The expenditures of the United Kingdom are of two kinds, permanent appropriations and supply appropriations. The former need not be voted year after year, but have been voted to continue until the Act under which they are authorized is repealed. Examples of expenditures of this nature are those for the sinking fund, pensions, debt charge, courts, and the civil list. The supply appropriations, however, must be voted repeatedly, and contain such items as the appropriations for the army and navy, revenue department, post office, railroads, and the civil service. Such an arrangement not only simplifies the budget preparation, but makes it possible to concentrate attention on the more

1 Army and navy bills are defended by representatives from these departments.

difficult and fluctuating items, while it tends to give a feeling of security to activities undertaken by the state.

The revenue is likewise of two kinds, one permanent, and the other provided for currently. About three fourths of the entire revenue comes in the first class, so that it is necessary to provide in the finance bill the amount above this which is required to meet the needs of the appropriations bill, or about one fourth of the total amount. These estimates of expenditures and receipts are so closely anticipated that the actual amounts do not usually vary more than 2 per cent from the expectations. The funds are placed in the Bank of England, and are at the control of the comptroller and auditor-general.

In England's fiscal machinery it is seen that absolute responsibility for the success of the budget rests in the ministry. The finance minister has a seat in the legislative body, which in turn has complete control over expenditures. Another interesting feature is that one branch of the legislative assembly has practically the entire control over the budget. No doubt the marked centralization of control over the fiscal system has had much to do with the success of the system.