fourth, etc. The fiscal supervisor, as he is called, is required to pass on monthly allotments from appropriations as well as on the bills or expenditure obligations as they are passed by institutions. What such a provision as that does is this: It goes one step farther in confusing responsibility for administrative control. It dissipates authority by one more refinement than is usual in trying to prevent executives from doing harm; it still further depreciates managerial ability. The law has placed on a reviewing officer the discretion of an executive, and has confused the two in such a way that the executive has his hands tied without providing any means for getting better results. THE CHAIRMAN-The executive can't escape responsibility? DR. CLEVELAND-Well, that is part of it; but another part of it is that responsibility without power to dischargs it leads to utter confusion. It is the same sort of thing that has led the people to throw a large part of the financial administration, as well as the audit, into the hands of the state comptroller. The constant effort has been to subdivide powers and split up authorities so that no one can act without an endless amount of red tape; but safety purchased in this way spells inefficiency. While taking away opportunity to do harm, we have also destroyed all possibility of holding anyone responsible for getting results. That is the logic of it. It tends towards a further weakening of our system of public business, rather than towards providing the means for making the government responsive and responsible.

Suppose that we attempted to run any kind of private business on such a theory? We could not foresee anything but confusion and utter incompetence. Now, this dissipation of powers and responsibility has been placed upon the ground of political expediency, but we have not carried the thing through to a logical conclusion-which is to abandon all thought of central executive responsibility and frame our constitution as we did between 1775 and 1777-place all power in the legislature and attempt to run the government by committees; or resort to another alternativeseparately incorporate each department as we have the department of education. We have acted in a temporizing way; we have made adjustments to relieve a temporary situation; the creation of the financial supervisor is simply one of the results of extemporising without any plan or well-thought-out purpose.

MR. BEACH-It furthermore puts the local manager of the institution in a position where he has responsibility without power.

DR. CLEVELAND-Yes.

MR. BEACH-I just want to bring up an illustration I happened to give to Mr. Parsons this noon. I was for six years one of the managers of the Rome State Custodial Asylum, and when the fiscal supervisor was appointed we had to comply with the requirement that we submit a monthly estimate of the supplies needed for the institution for the coming month. In that estimate were a certain number of heads of lettuce at a certain price and a certain number of thousand lath which were needed for a repair job. The lath were put in at $2 per thousand, but by an error of the clerk he put an extra cipher in and it went to the fiscal supervisor at $20 per thousand. The lettuce was put in at four or five cents a head, I forget exactly what it was, but the estimate came back to us with the lettuce reduced one cent per head, because the fiscal supervisor found it could be bought somewhere at that price, and he did not notice the lath, which made a difference of some two or three hundred dollars, and he succeeded in reducing the estimate ninety cents. Well, now, such a thing as that is so absolutely absurd that it takes away from the manager of one of these institutions all incentive to give any real time to it.

DR. CLEVELAND-On the question here of where the initiative should be placed. Under a different jurisdiction, where they have actually had a budget, I would like to read to you a little observation made by Stourm in his French treatise, speaking of the advantage of having the initiative lie entirely with the executive, as in Great Britain, and then going to the French practice, where they at first attempted to put the initiative in the legislature as in this country.

THE CHAIRMAN-In other words, in France they permit the estimate to be raised on the floor, don't they?

DR. CLEVELAND-They do; but it was in the midst of a discussion of a curtailment of legislative initiative.

THE CHAIRMAN-In Great Britain?

DR. CLEVELAND-No, France. (Continuing): An observation was made by one of the members there (see speech of Mr. Ribot, March 16, 1900), which is quoted by Stourm as a matter of common experience. The observation is this: "From this practice resulted the following two great abuses: An open door for impulsive action, and destruction of the equilibrium of the budget, the first causing the second. Impulsive actions are evident from that moment when it is permitted to every deputy to defend officially the reason for an increase of expenditures or for the reduction of revenues according to his individual opinion and for the benefit of his district. Such pleadings, which are carefully studied by their authors, masterfully presented, often with passion, stand in good chance to influence the assembly.

A suggestion by a member to increase the appropriation of some branch of the service in need, or to increase the salaries of subordinate employees or to increase the pensions of former servants of the state to make an appeal to the generosity of the heart or patriotic pride of the auditors is the way to easily achieve an irresistible success."

This might have been a speech made on the floor of Congress or any of our state legislatures in opposition to legislative initiative. This very discussion led to the curtailment of that privilege in France. Indeed, the deputies cut off their right to increase items having to do with salaries and pensions and personal matters, but still left it with respect to matters of organization. They are now again discussing whether they should not get clear over to the British practice of not permitting anything more to members than the right to propose reductions without any power on the part of Parliament to increase.

Even in the British Parliament, where they have that rule, they have found it very difficult to prevent increases in the budget through roundabout methods, as has been pointed out by a number of chancellors recently, through the passing of general legislation which will necessarily carry with it an obligation to spend money. But they have sought in every way possible through giving to the chancellor of the exchequer priority in the presentation of matters, to try to keep that down.

THE CHAIRMAN-There has been a good deal of discussion by members of the convention and by those of this committee as to the danger of increasing the power of the governor. Have you made any study of the comparative powers of the New York governor with the executives in other states or other countries, so that you might form an opinion as to whether there is any danger of his having excessive powers?

DR. CLEVELAND-I have made no study that would give me exact statistics on that subject. We have done a good deal by way of informing ourselves about such powers, and our general conclusion is this: that taking into consideration what has happened in countries where the governor has no power to initiate legislation having to do with financial matters and questions of organization, and also taking into consideration those jurisdictions where they do have such powers, we find that the powers of the executive, when reduced to a basis of responsibility for those things, are very much less offensively used and less vicious in their operation than where the cart is put before the horse and the governor is given a chance to use the official axe after the legislature gets through with the appropriation bill. Under our practice of giving only the executive veto to the governor, he has all the power over legislation that he would have in any event, except the power to do good. It relieves him of responsibility for giving to the state the benefit of executive judgment in the preparation of bills having to do with administration for preparing measures necessary to economy of management and reorganization so as to better the adaptation of the institution to its work. It is a matter of common experience that when a committee which has nothing to do with carrying out the authority granted is allowed to initiate bills for the reorganization of a department, while the executive is deprived of all opportunity of proposing, explaining and defending measures, and of the right to prepare and submit carefully drawn measuresis merely given the power to negative the measures initiated by others-only the worst use of power is provided for and no more provision is made for locating responsibility. It is just as if the shareholders of the Pennsylvania Railroad should put into the hands of a committee of the board of trustees the preparation and submission of a plan for the building of a branch line and then limit the powers of the president to a veto. Carefully considered administrative measures necessarily must come from the executive. The weakness of our system lies in the lack of authority on the part of a responsible officer to submit measures which would make for better management of affairs. We have given to officers all the power in the world to do mischief through negation, but we have not given them power to do good through requiring them to assume responsibility for preparing plans to be approved by the elected representatives of the people.

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CHAPTER IV

AMERICAN FINANCIAL METHODS FROM THE LEGISLATIVE POINT OF VIEW

BY HON. JOHN J. FITZGERALD

[On May 26, 1915, the Constitutional Convention Committee on Finances, Revenues and Expenditures met with Hon. John J. Fitzgerald, chairman of the Committee on Appropriations of the House of Representatives, and there ensued the following discussion of the problem of finances, particularly from the point of view of the legislature.]

THE CHAIRMAN (HON. HENRY L. STIMSON)-We have the pleasure of having with us to-day Mr. Fitzgerald, who has been for two Congresses the Chairman of the Committee on Appropriations of the House of Representatives, and has therefore had the chief charge of the making up of four national budgets, so far as a budget exists in our national government to-day. He has very kindly consented to come up here and to give us his experiences and his suggestions in regard to financial legislation as he has seen it in Congress.

Mr. Fitzgerald, the methods of this Committee are perfectly informal, and I suggest that you follow your own wishes in regard to the way in which you care to present to us what you have to say. If you prefer to do it that way, I suggest that you make your own statement and then, if you are willing for us to ask you questions, afterward, I am sure there are probably a number of us who will do so.

MR. FITZGERALD-I have not come prepared with any systemaatic statement about state finances or even of the finances of the Federal government. At the invitation of the chairman of the committee I was glad to come, and, if my experience and information could be of any service, gladly give to the committee such information as I had.

My work has been concerned chiefly with certain problems