in a great organization like a modern government, the task of selecting, directing, and controlling the employees is the most difficult of all. It is estimated that there are about 2,700,000 federal, state, city, county, and village officials in the United States. and that their annual payroll is no less than $3,500,000,000.

The proper discharge of their duties calls for a mastery of all professions and crafts, all sciences and arts. A glance through the roster of employees in New York City in alphabetical order reveals accountants, actuaries, alienists, architects, auditors, bacteriologists, boilermakers, bricklayers, cement testers, chemists, draftsmen, demographers, detectives, dietitians, electricians, engineers (mechanical, electrical, and civil), finger-print experts, firemen, franchise searchers, housekeepers, medical examiners, pathologists, pharmacists, psychologists, riveters, shoemakers, statisticians, surgeons, tinsmiths, upholsterers, X-ray-experts, and watchmen - to mention only a few of the various classes of persons necessary to the administration of a great city. Obviously no President, governor, or mayor has either the knowledge or the judgment necessary to select all the technicians required in public service. Even if he had freedom of choice and were not besieged by an army of job hunters, he could not, with the best of intentions, find the right men for the right places.

For a long time, however, we pursued a haphazard policy and intrusted the selection of civil servants mainly to the chief executives of the nation, state, and city and their immediate subordinates. By 1835, that is, during the administration of President Jackson, practically all public offices had become the "spoils of politics." Whenever a new political party came to power all, or nearly all, the employees were turned out of office to make room for members of the victorious party. Persons were appointed not because they were competent, but because they were Republicans or Democrats or partisans of some other kind. Competent officials and laborers were discharged after long and faithful service, and inexperienced politicians were put in their places. Unnecessary positions were created to provide employment for party workers. Salaries were not closely related to the nature of the work, but rather to the requirements of the political incumbent. Those who held offices were expected to devote a part of their time to helping the party in elections, and often they

gave more hours to partisan services than to public duties. They made large contributions from their salaries to party campaign funds, and if they failed to contribute they were assessed by the party treasurers. In the course of time, the public officers in each party and those who aspired to hold office became closely organized as party workers. They made up the bulk of the party committees and conventions. They were the directing captains in election campaigns. In short the political party became to a considerable extent an office-getting machine; the ordinary citizen was elbowed aside by office holders who had an abundance of time at public expense to do the active work of parties. Thus administration was perverted from its true purpose of serving the public and made subordinate to the job-hunting interests.

When conditions became so bad as to be unendurable, Congress in 1883 inaugurated civil service reform in the National Government and from that time forward an increasing amount of attention was given to the elimination of politics and to the technical improvement of public service in federal, state, city, and county government.1 On the one hand, this reform movement has been concerned with excluding the mere politicians from office and on the other with securing competent employees. In the course of time certain broad principles were worked out. Among these principles are the following: (1) Only policy determining officers, such as chief executives, department heads, and their higher subordinates should change with each change of administration; all other officers and employees should hold during good behavior and the efficient performance of their duties. (2) The appointing power of chief executives should be limited by the establishment of a commission or department charged with the duty of formulating rules for entrance into the public service and conducting examinations to test the fitness of candidates for admission or promotion. (3) All positions should be simply and logically classified on the basis of the duties actually performed by the holders of the various jobs and employments. The duties, title, and rate of compensation for each position should be clearly defined and should be the same for all departments of the same government. (4) The standard factors of education, experience, and ability necessary to the efficient performance of the duties of each position should be

1 See below, chaps. xiv and xxvii.

firmly established and made the basis of examinations for appointments and promotions. (5) The political, religious, and civil rights of public employees should be properly safeguarded and clearly defined. (6) Pension systems should be established for employees of long standing and these systems should be put on a sound financial basis.

During the early years of the civil service reform movement, attention was of necessity directed to preventing the use of public offices for partisan ends; indeed this is an ever present task. About 1910, however, the movement took on new and wider aspects. It was found that the new devices of civil service, while reducing the evils of the spoils system, left untouched other evils such as: (1) irregularity of pay for the same classes of work; (2) the multiplication of useless and fictitious offices; (3) legislative increases in the pay of individuals for party reasons, and (4) lack of opportunities for promotion from the lower to the higher ranges of the public service. These evils became so glaring in the National Government and in many states and cities that special commissions were appointed to study and report on ways and means of eliminating them.

At the same time publicists took up the discussion of civil service with reference to constructive employment policies as well as the elimination of the spoils system. Meanwhile large industrial corporations began to analyze their employment problems and appoint specialists, known as "employment managers," to direct the selection of employees. Suddenly "personnel questions" were found to be very essential elements in "scientific management." The growth of labor organizations, the formation. of associations and trade unions among government employees, and the extended discussion of "industrial democracy" introduced a new element into the situation, namely, the right of public employees to organize and participate in the determination of their conditions of employment. It was declared that the representation of employees in management was necessary to efficiency in work, the adjustment of grievances, the prevention of autocratic methods on the part of administrative chiefs, and the establishment of harmony between the managing side of the business and those who do the work in detail.

Undoubtedly this is a movement of great significance for the future of government as well as private industry. It already has

a large and growing literature. New experiments are constantly appearing and every phase of the personnel question is being subjected to the closest scrutiny by representatives of capital, labor, and governments. A large part of our life is affected by decisions in this sphere. Most of us are at one time or another the employees of private concerns or governments, and some of us may have responsible positions as employers and directors. The wise and fair determination of employment relations is essential to the orderly development of society and the efficient administration of government. The whole system of education is vitally related to it; through education persons are trained for the discharge of technical duties. For these reasons no one can pretend to be informed about modern government who neglects that body of knowledge and experience which falls under the head of "personnel administration."

Financial Administration the Budget

Money is the life blood of administration; without it no persons can be employed, no materials bought, no work done. Every government, large or small, must lay and collect taxes, appropriate money for various public purposes, keep accounts of its transactions, and usually incur debts for certain objects. These operations involving, as they do, billions of dollars annually may be carried on in a reckless, spendthrift fashion, or according to the highest standards of precision and economy. If finances are to be well managed, then the government must command business talents of the best order. No one can be an efficient administrator who is unable to think of the work done under his management in terms of dollars and cents.

For a long time this simple fact was little heeded in American politics. Legislatures, national, state, and city, appropriated money by many separate bills without any general plan and without any reckoning of totals until the end of the fiscal year or longer. Revenues and expenditures did not balance; some departments were starved while others were granted lavish favors; money was borrowed to pay current bills and the burden placed on future generations; huge sums disappeared from public treasuries without leaving any exact traces in the books and accounts. Not until the opening of the twentieth century was

any very serious attention given to the planned and orderly management of finances in America; the first national budget law was not signed until 1921. When taxes and debts grew to enormous proportions, citizens began to take notice of the methods by which the unhappy results had been brought to pass. Then it was that cities, states, and the National Government began to discuss a budget system.'

A budget system is both a document and a process: a plan of finances and a group of practices. The budget as a plan must present proposed expenditures for all purposes during a given period of time and proposed revenues for meeting those expenditures. As to the content of the budget there is general agreement that it should contain at least two important parts:

Part I. The revenue and expenditure program and information designed to elucidate it, embracing among other things: 1. A summary statement showing the total receipts and expenditures of the previous two years and the estimated receipts and expenditures for the coming year correctly classified.

2. Details of the summary statement, including departmental requests for funds (and supporting data from department chiefs) with the allowances made by the executive set forth in parallel columns, presenting to the legislative body and to the public the work requirements as viewed by operating officials. This analysis should be linked line by line with the summary statement and furnish the supporting data for proposed changes.

3. An analysis of all increases over and decreases from the previous year, indicating the purposes for which they are made, such an analysis to present the public policy and work program involved in each material increase or reduction.

4. Any collateral information necessary to explain the exact financial condition of the government, such as fund balance statement, surplus statement, debt statement, operating statement, and departmental reports of accomplishments.

Part II. Proposed bills appropriating money for various public purposes as determined by the legislative body and providing the revenues to meet them. There is much discussion among budget experts as to whether appropriations should be made to departments of government or to functions. It is urged that citizens are interested in the work of government, such as

1 See below, chaps. xvii and xxx.