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 4
 
 UNIVERSITY 
 
 OF CALIFORNIA 
 
 LOS ANGELES 
 
 SCHOOL OF LAW 
 LIBRARY
 
 The Maryland Budget 
 Amendment 
 
 rersity of ( 
 
 ■ , . S3 .: 
 
 AR 30 1927 
 
 UWVEI, 
 
 "Sfflg* 
 
 DEPARTMENT OF LEGISLATIVE REFERENCE 
 BALTIMORE, MARYLAND
 
 EXPLANATORY. 
 
 So many requests concerning the Maryland budget amend- 
 ment have been received, that it has seemed desirable to put into 
 pamphlet form this amendment, the report of the Economy and 
 Efficiency Commission which drafted the amendment, and the 
 several articles prepared by the members of this Commission in 
 explanation of the amendment, together with an article on "The 
 State Budget." 
 
 It is hoped that this pamphlet may be of value to the officials, 
 departments and institutions of Maryland in preparing their 
 requests for appropriations to be contained in the budget bills 
 to be submitted by the Governor at the next meeting of the 
 General Assembly, and that it may also serve the purpose of 
 giving information to the officials and legislators of other States 
 who wish to know about the Maryland budget plan. 
 
 Horace E. Flaok. 
 
 Department of Legislative Reference, 
 Baltimore, Md., 
 
 February 5. 1917.
 
 BUDGET AMENDMENT. 
 CHAP. 159, LAWS OF 1916. 
 
 An Act to propose an amendment to Section 52 of Article III, 
 title Legislative Department, of the Constitution of this 
 State, regulating the making of appropriations by the Gen- 
 eral Assembly of Maryland in regular session, and to pro- 
 vide for the submission of said amendment to the qualified 
 voters of this State for adoption or rejection. 
 
 Section 1. Be it enacted by the General Assembly of Mary- 
 land, (three-fifths of all the members of each of the two houses 
 concurring) that the following be and the same is hereby pro- 
 posed as an amendment to Section 52 of Article III, title Legis- 
 lative Department, of the Constitution of this State, the same, 
 if adopted by the legally qualified voters of the State, as herein 
 provided, to become Section 52 of Article III of the Constitu- 
 tion of Maryland. 
 
 Sec. 52. The General Assembly shall not appropriate any 
 money out of the Treasury except in accordance with the fol- 
 lowing provisions: 
 
 Sub-Section A : 
 
 Every appropriation bill shall be either a Budget Bill, or a 
 Supplementary Appropriation Bill, as hereinafter mentioned. 
 
 Sub-Section B: 
 
 First. Within 20 days after the convening of the General 
 Assembly (except in the case of a newly elected Governor, and 
 then within 30 days after his inauguration), unless such time 
 shall be extended by the General Assembly for the session at 
 which the budget is to be submitted, the Governor shall submit 
 to the General Assemblv two budgets, one for each of the ensu- 
 ing fiscal years. Each budget shall contain a complete plan of 
 proposed expenditures and estimated revenues for the particular 
 fiscal year to which it relates: and shall show the estimated 
 surplus or deficit of revenues at the end of such year. A.ccom 
 panying each budget shall he a statemenl showing: (1) the 
 revenues and expenditures for cadi of the two fiscal years next 
 preceding: (2) the current assets, liabilities, reserves and sul- 
 phas or deficit of the State ; (3) thedebtsand funds of the State ;
 
 2 
 
 (4) an estimate of the State's financial condition as of the 
 beginning and end of each of the fiscal years covered by the two 
 budgets above provided; (5) any explanation the Governor may 
 desire to make as to the important features of any budget and 
 any suggestion as to methods for the reduction or increase of 
 the State's revenue. 
 
 Second. Each budget shall be divided into two parts, and 
 the first part shall be designated "Governmental Appropria- 
 tions" and shall embrace an itemized estimate of the appropria- 
 tions : (1) for the General Assembly as certified to the Gov- 
 ernor in the manner hereinafter provided; (2) for the Execu- 
 tive Department; (3) for the Judiciary Department, as pro- 
 vided by law, certified to the Governor by the Comptroller; 
 (4) to pay and discharge the principal and interest of the debt 
 of the State of Maryland in conformity with Section 34 of 
 Article III of the Constitution, and all laws enacted in pursu- 
 ance thereof; (5) for the salaries payable by the State under 
 the Constitution and laws of the State; (6) for the establish- 
 ment and maintenance throughout the State of a thorough and 
 efficient system of public schools in conformity with Article 
 VIII of the Constitution and with the laws of the State; (7) 
 for such other purposes as are set forth in the Constitution of 
 the State. 
 
 Third. The second part shall be designated "General Appro- 
 priations," and shall include all other estimates of appropria- 
 tions. 
 
 The Governor shall deliver to the presiding officer of each 
 house the budgets and a bill for all the proposed appropriations 
 of the budgets clearly itemized and classified ; and the presid- 
 ing officer of each house shall promptly cause said bill to be 
 introduced therein, and such bill shall be known as the "Budget 
 Bill." The Governor may, before final action thereon by the 
 General Assembly amend or supplement either of said budgets 
 to correct an oversight or in case of an emergency, with the 
 consent of the General Assembly by delivering such an amend- 
 ment or supplement to the presiding officers of both houses; and 
 such amendment or supplement shall thereby become a part of 
 said budget bill as an addition to the items of said bill or as a 
 modification of or a substitute for any item of said bill such 
 amendment or supplement may effect. 
 
 The General Assembly shall not amend the budget bill so as 
 to affeel either the obligations of the State under Section ."> ! of 
 Article HI of the Constitution, or the provision made by the 
 laws of the State for the establishment and maintenance of a
 
 system of public schools, or the payment of any salaries required 
 to be paid by the State of Maryland by the Constitution thereof ; 
 and the General Assembly may amend the bill by increasing or 
 diminishing' the items therein relating to the General Assembly, 
 and by increasing the items therein relating to the judiciary, 
 but except as hereinbefore specified, may not alter the said bill 
 except to strike out or reduce items therein, provided, however, 
 that the salary or compensation of any public officer shall not 
 be decreased during his term of office; and such bill when and 
 as passed by both houses shall be a law immediately without 
 further action by the Governor. 
 
 Fourth. The Governor and such representatives of the execu- 
 tive departments, boards, officers and commissions of the State 
 expending or applying for State's moneys, as have been desig- 
 nated by the Governor for this purpose, shall have the right. 
 and when requested by either house of the Legislature, it shall 
 be their duty to appear and be heard with respect to any budget 
 bill during the consideration thereof, and to answer inquiries 
 relative thereto. 
 
 Sub-Section C: Supplementary Appropriation Bilh: 
 
 Wither house shall consider other appropriations until the 
 Budget Bill has been finally acted upon by both houses, and no 
 such other appropriation shall be valid except in accordance 
 with the provisions following: (1) Every such appropriation 
 shall be embodied in a separate bill limited to some single work, 
 object or purpose therein stated and called herein a Supple- 
 mentary Appropriation Bill; (2) Each Supplementary Appro- 
 priation Bill shall provide the revenue necessary to pay the 
 appropriation thereby made by a tax, direct or indirect, to be 
 laid and collected as shall be directed in said Bill; (3) No Sup- 
 plementary Appropriation Bill shall become a law unless ii be 
 passed in each house by a vote of a majority of the whole num- 
 1" r of the members elected; mid the yeas and nays recorded on 
 its final passage; (4) Each Supplementary Appropriation Bill 
 shall be presented to the Governor of the State as provided in 
 Section 17 of Article TT of the Constitution and thereafter all 
 the provisions of said Section shall apply. 
 
 Nothing in this amendment shall be construed as preventing 
 the Legislature from passing at any time in accordance with the 
 provisions of Section 28 of Article Til of the Constitution and 
 subject to the Governor's power of approval a- provided in 
 Section 17 of Article TI of the Constitution mi appropriation 
 hill to provide for the payment of any obligation of the State
 
 of Maryland within the protection of Section 10 of Article I of 
 the Constitution of the United States. 
 
 Sub-Section D : General Provisions : 
 
 First. If the Budget Bill shall not have been finally acted 
 upon by the Legislature three days before the expiration of its 
 regular session, the Governor may, and it shall be his duty to 
 issue a proclamation extending the session for such further 
 period as may in his judgment be necessary for the passage of 
 such Bill ; but no other matter than such Bill shall be considered 
 during such extended session except a provision for the cost 
 thereof. 
 
 Second. The Governor for the purpose of making up his 
 budgets shall have the power, and it shall be his duty, to require 
 from the proper State officials, including herein all executive 
 departments, all executive and administrative offices, bureaus, 
 boards, commissions and agencies expending or supervising the 
 expenditure of, and all institutions applying for State moneys 
 and appropriations, such itemized estimates and other informa- 
 tion, in such form and at such times as he shall direct. The 
 estimates for the legislative department, certified hj the pre- 
 siding officer of each house, of the judiciary, as provided by law, 
 certified by the Comptroller, and for the public schools, as pro- 
 vided by law, shall be transmitted to the Governor, in such form 
 and at such times as he shall direct, and shall be included in 
 the budget without revision. 
 
 The Governor may provide for public hearings on all esti- 
 mates and may require the attendance at such hearings of rep- 
 resentatives of all agencies, and of all institutions applying for 
 State moneys. After such public hearings he may in his dis- 
 cretion revise all estimates except those for the legislative and 
 judiciarv departments,, and for the public schools as provided In- 
 law. 
 
 Third. The Legislature may, from time to time, enact such 
 laws, not inconsistent with this Section, as may be necessnry 
 and proper to carry out its provisions. 
 
 Fourth. In the event of any inconsistency between any of 
 the provisions of this Section and any of the other provisions 
 of the Constitution, the provisions of this Section shall prevail. 
 Hut nothing herein shall in any manner affect the provisions of 
 Section '■) 1 of Article TIT of the Constitution or of any laws 
 heretofore or hereafter passed in pursuance thereof, or be con- 
 strued ;i< preventing the Governor from calling extraordinary 
 of the Legislature, as provided by Section III of Article
 
 IT, or as preventing the Legislature at such extraordinary ses- 
 sions from considering any emergency appropriation or appro- 
 priations. 
 
 If any item of any appropriation bill passed under the provi- 
 sions of this Section shall be held invalid upon any ground, such 
 invaliditv shall not affect the legalitv of the Bill or of anv other 
 item of such Bill or Bills. 
 
 Sec. 2. And be it enacted, by the authority aforesaid, That 
 the said foregoing Section hereby proposed as an amendment 
 to the Constitution shall at the next ensuing general election 
 being the presidential and congressional election, to be held on 
 the Tuesday next after the first Monday of November, nineteen 
 hundred and sixteen, be submitted to the legal and qualified 
 voters of the State for their adoption or rejection in conformity 
 with the directions contained in Article XIV of the Constitu- 
 tion of this State, and at the said election the vote on said pro- 
 posed amendment to the Constitution shall be by ballot, and 
 upon each ballot there shall be placed the following synopsis of 
 said amendment under the caption of 
 
 CONSTITUTIONAL AMENDMENT PROVIDING 
 FOR A BUDGET." 
 
 "This amendment provides that the Governor shall present 
 to the Legislature soon after it is convened a Budget giving a 
 complete plan of proposed expenditures and estimated revenues 
 for the two succeeding fiscal years showing clearly any surplus 
 or deficit in State funds. In these estimates he shall make pro- 
 vision for the interest and sinking funds of all State debts, for 
 all salaries as fixed by law, and for the public schools as fixed 
 by law. With regard to most other matters he may revise the 
 estimates presented to him either by State officers or State-aided 
 institutions. The Legislature may not increase the estimates 
 presented by the Governor or pass any additional appropriation 
 act except by a majority vote and must make provision by tax 
 for such increase or additional appropriation. The Legislature 
 may not alter in an appropriation ad (lie provision made by law 
 for the State debt, or for the judiciary, but may reduce all 
 other items in the (iovenmr's estimates:" and the words "For 
 
 the Constitutional Amendment" and "Against the Constitutional 
 Amendment," as now provided by law. and immediately after 
 -aid election duo returns shall be made to the Q-overnor of the 
 vote for and against the proposed amendment, and further pro- 
 ceedings had in accordance with Article XTY of the Constitu- 
 tion.
 
 u 
 
 VOTE ON ABOVE BUDGET AMENDMENT AT THE 
 ELECTION. NOVEMBER 7, 1916. 
 
 ( ounties. For. A gains! . 
 
 Allegany 3,705 2,020 
 
 Anne Arundel 1,132 388 
 
 Baltimore 0,7:57 4,131 
 
 Calvert 399 164 
 
 Caroline. - 396 144 
 
 Carroll 1,499 730 
 
 Cecil 877 245 
 
 ( Jharles 293 697 
 
 Dorchester 697 352 
 
 Frederick 2,510 1,527 
 
 Garrett 511 965 
 
 Harford 1,395 441 
 
 Howard'. 663 328 
 
 Kent. . . .' 385 166 
 
 Montgomery 1,654 275 
 
 Prince George's 1,489 369 
 
 Queen Anne's 990 196 
 
 St, Marv's 287 64 
 
 Somerset 345 122 
 
 Talbot 508 131 
 
 Washington 2,635 1,574 
 
 Wicomico 7 17 586 
 
 Worcester 343 178 
 
 Baltimore City 44,281 21,307 
 
 Totals 77,178 37.100 
 
 Majority for Amendment, t0,378.
 
 GOODNOW REPORT. 
 
 Executive Department. 
 
 Annapolis, Md v January 28, 1916. 
 To the President of the Senate. 
 
 Sir: 
 
 I transmit herewith a copy of the report of the Commission 
 on Economy and Efficiency on the Budget System, known as 
 the Goodnow Commission, which Commissipn was appointed by 
 the late Democratic Convention. Accompanying this report is 
 a Bill, prepared by the Commission, which, in its opinion, will 
 carry into effect its recommendations. I feel extremely grati- 
 fied at the very able report submitted. The Commission has 
 devoted much time and work in the performance of its dele- 
 gated duty. 
 
 I recommend this report and the accompanying Bill to your 
 Honorable Body for your prompt and favorable consideration. 
 
 Respectfully, 
 
 Emerson C. Harrington, 
 
 Governor. 
 
 Report of the Commission on Economy a\d Efficiency on 
 
 a Budget System. 
 
 (Md. Senate Journal, Jam/an/ :.'S. 1916, pp. 129 ISJf.) 
 
 The platform of the party to which this Commission owes 
 its existence provided, among other tilings, as follows: 
 
 "We pledge the adoption of what is known as the budged sys 
 tern. The basis of the system shall be a reporl made cither by 
 the Governor or by the Board of Public. Works to the Legisla- 
 ture of the estimated income of the State during the succeeding 
 two years, together with recommendations as to the appropria 
 tions or expenditures to bo made for all purposes during the 
 same period of time. The Legislature may reduce or eliminate 
 the items for appropriations <>r expenditures (excepl when this 
 would affect the State's outstanding obligations), Imt shall not 
 increase the same, and no appropriations shall be expended for 
 any purpose other than the purpose specified in the budget. 
 Proper provision shall be made for emergencies or contingen 
 cies.
 
 "Until the budget system can be made effective, we pledge 
 the Democratic members of the Legislature to keep the expenses 
 of the State within the income of the State, and the Governor 
 to exercise his veto power for the same purpose. 
 
 "In connection with the budget system, we favor the adoption 
 of a uniform fiscal year for all State officers and departments 
 and for all institutions receiving State aid. We recommend 
 that all continuing appropriations be repealed and that here- 
 after all appropriations shall be included in two general appro- 
 priation Bills — one for each of the two fiscal years intervening 
 between the adjournment of one Legislature and the convening 
 of the next. 
 
 "The Commission created by the first plank of this platform 
 shall be charged with the duty of devising and recommending a 
 detailed plan for the budget system." 
 
 It will be noted that the platform provides for a budget 
 system prepared by the Governor or the Board of Public Works, 
 the items of which can be reduced or eliminated, but not in- 
 creased, by the Legislature. 
 
 This limitation is fundamental in our judgment for a sound 
 budget system. It has its counterpart in the budget systems of 
 governments most advanced in their fiscal management. It also 
 has its counterpart in the budget systems of a number of Ameri- 
 can municipalities. As has been pointed out by the Mayor of 
 Baltimore City, one-half the population of the State of Mary- 
 land has become accustomed to this system in its municipal af- 
 fairs and would not think for a moment of going back to the old 
 system. 
 
 Such a change, however, as is pledged in the Democratic 
 platform, requires a constitutional amendment in this State. 
 
 A mere statutory provision that the Governor or other State 
 officer should submit to the Legislature at the opening of its ses- 
 sion, estimates of the revenues and expenditures of the State 
 cannot, in our judgment, produce the reform in State finance 
 which is demanded by the people and voiced in the Democrat ic 
 platform. 
 
 A provision of this character has been, indeed, for a long 
 t ime in the Maryland Constitution. This is Article VI, Section 
 2, which Imposes upon the Comptroller the duty of preparing 
 and reporting "estimates of the revenue and expenditures of 
 the State." 'I'lils provision of our State Constitution has not 
 been interpreted as vesting the Comptroller with the power to 
 revise the estimates submitted to him. He has. as a rule, sent
 
 9 
 
 to the Legislature estimates of expenditures which have not, at 
 any rate in recent years, controlled the action of the Legislature 
 in making the appropriations. 
 
 The attempt has also been made in this State, through the 
 establishment of the Board of State Aid and Charities, to assist 
 the Legislature in its appropriation of the State moneys to the 
 many State-aided private institutions. The Board has done a 
 great deal of painstaking and valuable work. But for one rea- 
 son or another, the Legislature has not paid sufficient attention 
 to the Board's recommendations to justify us in reaching the 
 conclusion that the purpose of the establishment of the Board 
 has been completely realized. It is still true that the estimates 
 of State money needed by the State-aided institutions have not 
 been subjected to an effective administrative supervision — ef- 
 fective at any rate in the sense that the recommendations of the 
 Board of State Aid and Charities have been persuasive in con- 
 trolling legislative action. 
 
 It may, therefore, be said that the methods already resorted 
 to in this State to place before the Legislature a complete pic- 
 ture of the State's financial resources and needs have not been 
 successful. The present excess of expenditures over receipts, 
 which has resulted in the lame accumulated deficit, is ample 
 proof of the proposition that the methods of making appropria- 
 tions now in force are defective. 
 
 It will also be noted that the party platform providing for 
 the Commission limited its choice in determining the responsi 
 hi lit v for making the final estimates for Submission to the 
 Legislature, to the Board of Public Works on the one hand, and 
 to the Governor on the other. We have concluded thai this 
 responsibility should be placed upon the Governor. We have 
 felt that to make use of the Board of Public Works as a Budgel 
 Commission would have the disadvantage of dissipating per 
 sonal responsibility for financial propositions, and would also 
 run the risk of not securing party responsibility. For it is by 
 no means certain under the condition- which exisl in the State 
 thai the political partj to which the Governor belonged would 
 be in control also of the Hoard of Public Works. If such lack 
 of political harmony should exist, the Commission believe that 
 a budgel Bystem based upon the Hoard of Public Work- would 
 lose much iii ellectivem 
 
 The most difficull problem in connection with the formulation 
 
 of a budged plan which presented itself to the Commission \ V:l v 
 
 the determination of the powers of the Legislature relative to 
 the estimates to be submitted b\ the Governor to the Legisla
 
 10 
 
 ture. It was recognized that the weakness of all American 
 financial methods, in the Congress of the United States, as well 
 as in the Legislatures of the separate States, was to be found 
 in the practice to which all American legislative bodies are 
 addicted of adding either to the amounts demanded by the 
 administrative departments, or to the items for which appro- 
 priations were asked. Under the Baltimore City Charter the 
 ( itv Council may reduce but not increase the estimates adopted 
 by the Board of Estimates. , This plan has been eminently suc- 
 cessful. 
 
 The Commission feels, however, that a broader latitude should 
 be given a legislative body in financial matters than is given the 
 City Council in municipal budget making, provided the latitude 
 so given cannot be used in such a manner as to produce a deficit 
 in the State's finances. 
 
 In this decision the Commission follows the suggestion of the 
 Democratic platform that proper provision be made for emer- 
 gencies or contingencies. 
 
 For these reasons the Commission is of the opinion that it is 
 advisable to give the Legislature the power to initiate appro- 
 priations for objects for which the Governor has made no esti- 
 mates. The Commission feels, however, that it is necessary to 
 prevent the recurrence of deficits in the finances of the State, 
 and to fix the responsibility for any derangement of the finan- 
 cial plans of the Governor. It has accordingly framed the pro- 
 posed constitutional amendment in such a way as to permit the 
 Legislature by a three-fifths vote, and subject to the usual pro- 
 visions with regard to the approval of the Governor, to appro- 
 priate money for a purpose not included in the Governor's esti- 
 mates, on the condition that provision is made in the act of 
 appropriation for the levy of a tax sufficient in amount to de- 
 fray the expenses necessitated by such act of appropriation. 
 
 Apart from this power of initiating appropriations the Com- 
 mission has believed that the example offered by city charters 
 might be followed. It has accordingly, and in compliance with 
 tli(> Democratic platform, provided that as a general thing the 
 Legislature may not alter the estimates of appropriations sub- 
 in it tod by the Governor except to strike out or reduce them, and 
 it lias confined the power of the Legislature at a regular session 
 to initiate an appropriation to the period of the legislative scs- 
 
 o subsequent to action upon the estimates submitted by the 
 Governor.
 
 11 
 
 It is further to be noted that the Commission has felt that 
 the separation of the three great departments of government, 
 which is such a characteristic feature of American political 
 organization, makes it desirable to treat the estimates for the 
 legislative and judiciary departments differently from the other 
 estimates. The estimates for the Legislature and judiciary are 
 not to be subject to the revisory powers of the Governor. Those 
 for the Legislature and judiciary are to be certified to the Gov- 
 ernor, and are to be transmitted by him without revision to the 
 Legislature. The estimates of the judiciary as provided by law 
 are to be certified by the Comptroller, and the Legislature may 
 increase them, but not reduce them. The effect of this method 
 of treating the estimates for the judiciary will be that no reduc- 
 tion in the provision made by the law for the judiciary may be 
 made in an Appropriation Act. The Legislature may, however, 
 by an Act, not an Appropriation Act, but subject to the limita- 
 tions of the Constitution, change the provision made by law for 
 the Courts. In case it should do so, the Comptroller must, the 
 next time a Budget Bill is presented, certify the estimates for 
 the judiciary, as provided by the law. 
 
 The estimates for the Legislature are to be certified by the 
 presiding officer of each House for transmission without revi- 
 sion to the Legislature, which may increase or reduce them. 
 
 In order to carry out the spirit of the provision of the plat- 
 form which seeks to protect ''the State's outstanding obliga- 
 tions," and in order to preserve as far as possible unchanged 
 the present provisions of the Constitution, we have provided 
 that the Governor shall in his estimates make provision for the 
 State debt, for salaries payable by the Constitution and laws of 
 the State, for a free public school system, ;is provided by law. 
 and for such other purposes as are set forth in the Constitution. 
 The amendment also prevents the Legislature from amending 
 the Budget Bill so as to affect the State debt; from reducinir 
 the salaries of public officers during their term of office, the rule 
 of the present Constitution, or from altering the estimates for 
 the free school system as submitted by (lie Governor. 
 
 Finally, the constitutional amendmenl which we have pro 
 posed provides for the contingency thai the Legislature 'lues nut 
 aet upon die Budget Bill during its regular session, by author 
 izing the Governor to extend thai session. In case lie does so, 
 the amendment provides that the Legislature may do1 consider 
 •hiring the extended session any other matter than the Budgel 
 
 Bill. We have also specifically provided that the amendment 
 proposed shall not be construed as preventing the Covernor from
 
 12 
 
 calling extraordinary sessions of the Legislature, as now pro- 
 vided in the Constitution, nor as preventing the Legislature at 
 such extraordinary sessions from considering emergency appro- 
 priations. 
 
 Our thought in drafting the proposed amendment has been : 
 
 First — To impose upon the Governor the sole responsibility, 
 within the limits of the Constitution and the provisions of exist- 
 ing law, of presenting to the Legislature a complete and compre- 
 hensive statement of the needs and resources of the State based 
 upon : 
 
 (a) Estimates made by those applying for State moneys; 
 
 (b) Evidence brought out at public hearings on those esti- 
 mates ; and 
 
 (c) Administrative revision by the Governor of all estimates, 
 except those for the Legislature and the judiciary, and for pur- 
 poses for which provision has been made by the Constitution or 
 existing law. 
 
 Second — To make it impossible for the Legislature so to 
 change the plans proposed by the Governor as to produce a 
 deficit; but 
 
 Third — To permit the Legislature to make provision for any 
 purpose not included in the Governor's plan on the condition 
 that it provide also for the revenue which the accomplishmenl 
 of its purpose necessitates. 
 
 Fourth — We have not attempted in the amendment proposed 
 to deal with existing continuing appropriations. We have felt 
 that it would be improper to repeal such appropriations by con- 
 stitutional provision. Indeed, so far as a continuing appropria- 
 tion is a part of a contractual obligation, as for example, a con- 
 tinuing appropriation for interest and sinking fund for the 
 State debt; a repeal of such an appropriation in the Slate Con- 
 stitution would be unavailing, since it would contravene that 
 provision of the United State- Constitution which forbids a 
 State to pas- any law impairing the obligation of a contract. 
 
 We have, however, provided in the amendment submitted 
 that the Legislature may from time to time enad such laws not 
 inconsistenl with the amendmenl as may he necessary ami 
 proper to carry out any of its provisions. I'mler this clause 
 the Legislature may repeal nil continuing appropriations not 
 of a contractual character. Such a policy it is to be remem 
 bered is approved by the platform of the party under the in- 
 structions of which tin- Commission has been working. It is.
 
 13 
 
 however, a policy which would bo realized rather by legislation 
 than by constitutional provision. 
 
 ( hit of abundant caution and in order to carry out the pur- 
 pose of the platform to protect the "State's outstanding obliga- 
 tions," we have left it in the power of the Legislature to pass 
 at any time and in the usual manner an Appropriation Bill for 
 the payment of all the State's obligations protected by the pro- 
 vision of the Constitution of the United States forbidding a 
 State to pass any law impairing the obligation of contracts. 
 
 In conclusion, we beg to emphasize the fact that in the opin- 
 ion of the Commission the proposed amendment is in all its 
 details in exact accordance with the provisions of the Demo- 
 cratic platform. 
 
 Frank J. Goodnow, Chairman. 
 
 James Alfred PeakcEj 
 
 JosErn D. Baker, 
 
 B. Howell Geixwoid, Jr., 
 
 Philip D. Laird, 
 
 William M. Maloy, 
 
 F. ISTeal Parke.
 
 14 
 
 EXPLANATION OF THE BUDGET 
 AMENDMENT. 
 
 The following statement from "The Baltimore Sun' of Sept. 
 4, will explain the purpose of the articles published herewith 
 through the courtesy of "The Sun'' : 
 
 Believing that the budget amendment, which will be voted 
 upon by the people this fall, is a matter of the most far-reaching 
 importance to the State of Maryland, and fearing that in the 
 stress of the national campaign it may be overlooked by the 
 voters, The Sun some time ago requested the members of the 
 Economy and Efficiency Commission, which framed the amend- 
 ment after weeks of study, to prepare articles setting forth the 
 reasons for their belief that it should be made a part of the State 
 ( (institution. 
 
 Below is the first of these articles — prepared by former Judge 
 James Alfred Pearce. It is hardly necessary to tell who Judge 
 Pearce is. For nearly two decades he was an honored member 
 of the Court of Appeals, was regarded by lawyers as "the scholar 
 of the bench," was known far and wide as thoroughly saturated 
 with the principles of American institutions. Articles by Dr. 
 Goodnow, Mr. Laird and the other members of the commission 
 will be published, one each week. 
 
 NEED OF BUDGET. 
 
 (Baltimore Sun. Sept. 4, 1916.) 
 By James Alfred Pearce. 
 
 Since the passage by the General Assembly of the act propos 
 ing an amendment to the Constitution of Maryland creating ;i 
 budget system nearly five months have passed, and during thai 
 period public attention has been directed almost exclusively to 
 the consideration of questions involved in our primaries for 
 United States Senator, in the approaching Presidential cam- 
 paign and other matters of national import, and in consequence 
 there lias been no discussion of the amendment clearly disclos- 
 ing (lie attitude of the people toward it. 
 
 I feel, therefore, the reasonableness of Ttte Six's suggestion 
 that the members of the Commission appointed by the last Dem 
 ocratic State Convention to prepare tor submission a budgel 
 amendment, anil who gave their best thought to that work for 
 more than four months, should, each lor himself, state as briefly 
 as he may the . considerations which governed in framing the 
 
 amendment, and which they believe should secure its adoption
 
 15 
 
 In this day of manifold and ever extending governmental 
 agencies, no one, I believe, will dispute the need of some system 
 of State appropriations based upon the budget principle, and, 
 so far as I have observed, such objection as lias been made to 
 that proposed in this State is expressed in the vague and unsup- 
 ported suggestion that it is "un-American and undemocratic," 
 and it is to this criticism that I wish to speak. 
 
 Developed ix England. 
 
 The germ of the budget, its vital principle, is inseparable 
 from, and may even be said to be coeval with, civilized govern- 
 ment; at least, with what is now understood by constitutional 
 government. It had its early development in the parliamentary 
 practice of England, our mother country, from which we have 
 inherited our most cherished institutions, and, since our inde- 
 pendence, have adopted so many of our more modern methods 
 of procedure, and that would be a rash judgment which would 
 declare any principle "un-American" because it was practiced 
 in England, or "undemocratic" because England's government 
 is a constitutional monarchy, while ours is a constitutional 
 republic. 
 
 The President is required by the Constitution, from time to 
 time, to recommend to Congress such measures as he shall judge 
 necessary and expedient, thus recognizing his initiative in logis 
 lation. 
 
 The Constitution of Maryland of 1851 in the light of experi- 
 ence, required the Governor to recommend to the Legislature, 
 from time to time, such measures as he may deem necessary and 
 expedient. The two succeeding Constitutions have repeated 
 this mandate, and similar provisions are now found in the Con- 
 stitutions of most of the states of the Union. 
 
 During Mr. Taft's administration the demand for public 
 economy was so insistent that lie urged upon ( longress provision 
 for "a definite budget, a concrete and well considered program 
 of work to be financed." During this discussion Senator Al 
 
 drich declared that such a program would save tl ountry 
 
 $300,000,000 a year, and a commission of inquiry was ap 
 pointed, which made an elaborate report, and, though Congress 
 
 has not acted in the matter, the subject is a live one in the pnh 
 He mind and has the earnest advocacy of Mr. Wilson and Secre 
 tary of the Treasury McAdoo, and the support of much the 
 larger and most enlightened and influential representatives of 
 the press of the country. The assertion that it is an "nn Ameri 
 can" idea mav be therefore dismissed as without foundation.
 
 16 
 
 Ls \ot "UNDEMOCRATIC." 
 
 The companion criticism (hat it is "undemocratic" is equally 
 vague, though it is more likely to excite the hostility or rouse 
 the apprehension of careless thinkers, as implying the invasion 
 or impairment of some fundamental principle of popular gov- 
 ernment. But even a superficial consideration of this objection 
 will suffice to show that the budget idea contravenes no funda- 
 mental principle of popular government; that it destroys or 
 impairs no power of control by the popular branch of the Gov- 
 ernment, and that it is, essentially, only a method of procedure 
 in the application of one of the most jealously guarded princi- 
 ples of popular government, with a view to the fuller protection 
 of the people in the raising and disbursing of their own reve- 
 nues. Tt has been well said that the history of the development 
 of representative government is the record of a struggle for 
 popular control of the public purse, and that "there is no prin- 
 ciple upon which our political institutions are more firmly based 
 than that the public finances, both with respect to the raising of 
 revenues and the expenditure of state funds, should be regulated 
 by those upon whom levies are to be made." 
 
 A chairman of the Appropriations Committee of Congress, 
 as the result of long study, has recently said in reply to the ob- 
 jection that "we should not restrict the right of the representa- 
 tives of the people to loosen up the pursestrings, that the uni- 
 versal condition of this country today is not that we must safe- 
 guard the rights of the people to get money for things. The 
 whole curse of our condition is thai everybody is doing his ut- 
 most to act it, and succeeds, and the evil to be corrected is the 
 (wil of his excessive expenditure." 
 
 1 )i.i i \ itio.x is Presented. 
 
 I adopt as accurate and scientific, yet simple, the definition 
 of a budget given by Frederick A. Cleveland, director of the 
 Bureau of ^Municipal "Research of New York City, viz: "A 
 plan for financing an enterprise or government during a defi 
 nite period, which is prepared and submitted by a responsible 
 executive to a representative body, whose approval and authori- 
 zation are necessary before the plan may be executed," and 1 
 believe the amendment to be submitted to tin people of Mary- 
 land al the November election conforms to this definition and 
 is free from violation of any popular right or of any true 
 democratic principles. 
 
 An examination of its provisions will show that it is in per- 
 leei accord with the principle that the public purse -hall always
 
 17 
 
 be under the free control of the representatives of the people, 
 and that it merely provides an orderly method of procedure in 
 the application of this principle. The amendment as a whole 
 provides a concrete and carefully considered plan of work to be 
 financed by the Sjtate, leaving no element or item to hasty, or 
 haphazard action. This plan is to be prepared and submitted 
 by the Executive, who is in fact responsible for the execution 
 of the laws, and who is held responsible by the people for safe 
 and wise leadership. It is impracticable within the limits of 
 this article to consider in detail why this duty is committed to 
 the Governor rather than to some other officer or board, but the 
 reasons were convincing to every member of the commission, and 
 I am confident will be found so by the great majority of careful 
 thinkers. 
 
 The plan is to be submitted to the General Assembly within 
 20 days after it convenes, in order to give ample time for its 
 consideration, but at the same time is illustrated the care with 
 which the control of the representative branch of the govern- 
 ment is preserved, in the provision that the Assembly may ex- 
 tend this time if it is deemed necessary or desirable to give fur- 
 ther time for its preparation. 
 
 Governor Acts ox Advk e. 
 
 The plan is not the arbitrary or unaided idea of the Governor. 
 He is required to act upon estimates and statements from all 
 the departments, boards and agencies in the State, as to the 
 anticipated revenues of the State as compared with those of 
 the two preceding years, and as to the reasonable and probable 
 nee<U of such departments, boards, etc., as well as of all insti 
 futions applying for State aid, and both he and they have the 
 righl and may be required, whenever requested by either House, 
 to appear and answer queries relative to the plan ; and the Go\ 
 ernor may require public hearings on all estimates submitted to 
 him before acting upon them. 
 
 Eacn budged is to be in two parts designated, respectively, 
 "governmental appropriations" and "general appropriation 
 The former will embrace i l ) tho.se for the General iLSsembly, 
 just as certified to the Governor by the presiding officer of each 
 house ; ( 2 I those for the executive departmenl ; | 3 i those for the 
 judiciary as provided by law cei tified by the < lomptroller to the 
 Governor; i I | for principal and intei*es1 of the public debt as 
 required by the Constitution; (5) for salaries as provided frj 
 law; (6) for maintenance of public schools as commanded l>\
 
 18 
 
 the Constitution, and (7) for any other purposes made manda- 
 tory by the Constitution. 
 
 This constitutes a segregation of items, analogous to iixed and 
 overhead charges, and results in determining a general balance 
 of estimated revenue available for general appropriations, which 
 embrace all those not designated as governmental appropria- 
 tions, and which, however proper and necessary under the 
 scheme of modern government prevailing in all the States of 
 the Union, are not strictly speaking part of the machinery of 
 the State, and which for that very reason require more caution 
 in granting them. The General Assembly may amend the bud- 
 get bill by increasing or decreasing the items for their own ex- 
 penses and by increasing the items for the judiciary, but may 
 not otherwise alter the bill except to strike out or reduce items 
 therein, provided that officers' salaries shall not thus be reduced 
 during their term of office. 
 
 Action of Assembly Limited. 
 
 In acting upon the General Budget bill, as it may be prop- 
 erly designated, the General Assembly may not increase any 
 item, except as above mentioned. This is an apparent, but only 
 apparent, restriction upon its power to grant appropriations. 
 The amendment makes specific and ample provision for supple- 
 mental appropriations at pleasure, after the General Budget bill 
 has passed both Houses, subject only to the requirement that 
 each bill for supplemental appropriations shall be limited to a 
 single object or purpose stated therein; that it shall provide 
 the necessary additional revenue by a tax to be laid as directed 
 in the bill, and that it shall receive in each House a majority 
 of all the members elected thereto. Thus, while the exercise of 
 the right to make appropriations is regulated as to the time of 
 its exercise, the ultimate power is undiminished. 
 
 No meritorious object which would have received the ap- 
 proval of the Assembly, if included in the general bill, need ever 
 fail when presented in a supplemental bill; while many an 
 unwise or excessive appropriation, which would have slipped 
 through under the present mode of procedure, would be rele 
 gated to the disenrd. 
 
 This provision, the members of the Commission felt to be a 
 most valuable feature of the amendment, fully meeting and dis 
 arming hostile criticism as respects any impairment of the 
 I lower of the Legislative branch, and strongly eommending the 
 whole amendment to every taxpayer and to every eitizcn jealous 
 of the good nnme and credit of the State.
 
 19 
 
 GAIN FOR STATE IN BUDGET PLAN. 
 
 (Baltimore Sun, Sept, 11, 1916.) 
 By PHiLir D. Laird. 
 
 Member of the Public Service Commission and Speaker of the 
 /louse of Delegates in the last' Legislature.) 
 
 Among the matters to be passed upon by the citizens of Mary- 
 land at the next election is the budget system which the Legis- 
 lature of 1916 submitted, in the form of a Constitutional amend- 
 ment, for approval or rejection by the people. So far as the 
 Stat< is concerned, no more important measure, when the prac- 
 tical results aimed at are considered, has ever been presented 
 for the final determination of the voter ; and the issues of a 
 Presidential election, nation-wide and serious as they are con- 
 reded to be. should not be permitted to overshadow the vital local 
 interest- involved in the establishment of sound principles and 
 methods to safeguard the financial integrity of the State and 
 lighten the burden of taxation. Indeed, it would seem to be 
 short-sighted patriotism to show indifference to any one of the 
 elements which combine to produce desired results, and no State 
 can properly discharge its duty to the Union unless its own 
 affairs are well managed and its resources conserved to meet 
 contingencies as they arise, ;is well as to meet its daily recur- 
 ring obligations. 
 
 In discussing the budget amendment it is essential to keep in 
 mind (lie conditions and practices which il is designed to cor 
 reet. For many years loose methods of appropriation of public 
 funds prevailed in the General Assembly, without regard to 
 probable revenue and. apparently, without knowledge of its 
 30urces under existing law-. The practice has grown up and 
 become fixed of applying for State aid for all sorts of local pur- 
 poses which should have been provided for by counties and 
 municipalities, and delegations combined l<> carry their meas 
 lires through under the mistaken idea that, as the counties and 
 cities made no direct levies for the object, they were relieved 
 from the resulting taxation. This condition was taken advau 
 tage of l,v designing men who possessed political influence, to 
 gecure support for measures in which they had a special inter 
 
 est. These men would threaten the detent -if local hills unless
 
 20 
 
 their authors agreed to vote for the bills which the politicians 
 desired to have passed, and the fear of unpopularity at home. 
 in case the local measure failed, was usually strong enough to 
 influence delegations to accept the conditions. This log-rolling 
 process went on in the face of warnings from the fiscal officers 
 of the State and the press, and each party, when in control, acted 
 with the same disregard of consequences. But in fairness H 
 should be said that much of the extravagance of later years thai 
 produced the deficit of L915 and 1916 was in response to popu- 
 lar demand for facilities and to the constantly increasing num- 
 ber of schemes for "uplift," whose promoters swarmed in the 
 State House appealing for money. Furthermore, in forming 
 our judgment of the Legislature, it would be unfair to overlook 
 the fact that, while warnings had been sounded, comprehensive 
 statements of fiscal affairs, such as would be really informing, 
 were not furnished to the members, and they were obliged to 
 act, generally in the closing days of the session, upon reports of 
 committees which contained no comment, or upon the hasty 
 explanations of overworked chairmen. These untoward condi- 
 tions were prominently in evidence in the last session of the 
 Legislature. It was necessary to make provision for a large 
 deficit, and to meet the increased expenditure which this and 
 other causes occasioned, new sources of revenue had to be found 
 and the measure of taxation worked out and adjusted to pro- 
 duce the best and fairest results. It was impossible to formu- 
 late the appropriation bills until the approximate revenue was 
 ascertained, and it was not until the very last day of the session 
 that the more important appropriation bills were introduced 
 and passed under suspension of the rules. 
 
 Too many dangers lurk in such a situation to permit its recur- 
 rence in the legislative experience of the State. The remedy 
 lies in a rule which will be binding upon the General Assembly 
 and which una fan tees investigation of the public needs and 
 resources, and forethought in the efforl I" promote the public 
 welfare, before the Legislature is called upon to act. The ad- 
 vantage of this to the responsible legislator and to the whole 
 body of citizens is so obvious thai argument to prove it would 
 seem to be a waste of time. The legislator, T am sure, would 
 welcome it, and the citizen would rejoice to know in advance 
 what was proposed and be in a position to make his views known 
 to bis representatives. A distinct advance in administrative 
 
 orm will be made when the fiscal scheme of the ensuing two 
 years is laid bare in the early days of the session of the Legis- 
 lature, and subjected to the scrutiny of the press and the peo-
 
 21 
 
 pie — something that has been missed in all these years — and 
 the citizens are brought into intelligent and intimate touch with 
 affairs of State that affect them in a thousand ways. 
 
 The object of the budget system is to abolish the abuses 
 above referred to and others that might be named, and estab- 
 lish in their place an orderly, systematic, detailed statement of 
 the financial condition of the State, accompanied by recom- 
 mendations, in the form of bills, for the appropriations for the 
 ensuing two fiscal years and for raising the revenues to pay 
 them. Tin's could have been accomplished by a statute, but 
 after a full discussion and serious consideration, the Commis- 
 sion reached the conclusion that the purpose would be more 
 effectively carried out by a constitutional amendment. A stat- 
 ute would have been binding so long as it remained unrepealed, 
 but it is within the range of possibility — in some conditions, of 
 probability — that the influences friendly to the old and easy- 
 going methods might be strong enough to effect the repeal of 
 the law before its merits could be tested by time, or to so 
 modify it as to destroy its value. A constitutional provision. 
 however, would have the merit of stability; and the approval of 
 the people, expressed at a general election, would have the effect 
 of stimulating those charged with the preparation of the budgel 
 to unusual care in their work, and those responsible for its adop- 
 
 n to unusual care in analyzing and acting upon it. 
 
 The admirable article by Judge Pearce, in The Sun of Sep- 
 tember 4. sets forth the reasons which influenced the Commis 
 sion in committing the preparation of the budgel to the Gov- 
 i rnor, and discusses with force and precision the objections to 
 that provision. He also disposes of the contention thai (lie 
 aim ndinenl is a un-American" and deprives the Legislature of 
 powers and prerogatives which properly belong to it. Probably 
 a discussion of those items from a differenl standpoinl would 
 be worth while and it may he undertaken at a later date. But 
 the presenl purpose is to indicate the lines along which the ('em 
 mission worked in the effort to produce practical results thai 
 
 must necessarily prove beneficial. The space at command does 
 not permit, at this time, elaborat( discussion of details, and it 
 is sufficient to < ; ,\ that the objeel was to establish in public 
 affairs the same care, intelligence and mastery of details that 
 has enabled men in comm< rcial pursuits to overcome difficulties 
 ;oid achieve splendid triumphs in the business world. 
 
 Tin re is not one rule of economy and business oversighl and 
 attention lor the individual or private corporation and another 
 
 rule for the State. The difficulties of the State are in some
 
 22 
 
 respects more numerous and irritating, because conflicting local 
 interests and invisible political influences are constantly at 
 work; but the fundamentals of efficient management are the 
 same in both cases. In its essence, the budget system is simply 
 an established method of management of public fiscal affairs 
 which shall be open and aboveboard to all who have an interest. 
 As it is viewed by those who have given special study to the 
 subject, a distinct advantage will be gained by compelling the 
 Governor to prepare the budget, because the work will give him 
 first-hand information of matters over which his executive func- 
 tions properly extend, and equip him to adequately fulfill the 
 responsibilities of his trust. The Constitution now compels him 
 to recommend to the General Assembly such measures as he 
 deems wise and expedient in the public interest. The proposed 
 amendment only requires that as to certain things he shall fur- 
 nish the details which will enable the Assembly to act intelli- 
 gently and promptly. In this, it is submitted, there is no cause 
 for alarm. 
 
 Those countries which have adopted the budget system — con- 
 fessedly the best managed, financially, in the world — would not 
 consent to a change, and among them no personal liberties of the 
 people, and no fundamental parliamentary rights have been cur- 
 tailed or endangered by it. There is nothing peculiar in our 
 institutions, as will be shown later, which makes them amen- 
 able to assault through the adoption of sound business methods 
 which will conserve the resources of the State, ultimately close 
 numerous channels of extravagance and waste, and remove the 
 opportunities for sinister and demoralizing practices.
 
 23 
 
 HUMAN INTEREST SIDE OF THE BUDGET QUESTION. 
 
 {Baltimore Sun, Sept. 18, 191G.) 
 By William Milnes Maloy. 
 
 {Former State Senator.) 
 
 If the Maryland legislator served his State as well as he 
 serves his county or district, a budget system would not be 
 necessary in Maryland. This is not a reflection upon the legis- 
 lators of Maryland in particular, for, regretfully, it must be 
 said that most of the members of Parliament, of Congress and 
 of every State Legislature in the Union are more mindful of 
 the public interests of the localities they respectively represent 
 than of the general welfare of the nation or State. 
 
 The division of Maryland by a great body of water into an 
 Eastern and a Western Shore, embracing a diversity of moun- 
 tain slopes, low-lying plateaus, interrange valleys and coastal 
 plains, exhibiting every variety of soil and crops, aiid the great 
 aggregation of half the population of the State in an industrial 
 and seaport city, with the other half scattered between trading 
 villages and farming communities, present to the General As- 
 sembly, charged with the dutv of choosing the channels into 
 which to divert the quickening stream of public appropriations. 
 a perplexing confusion of interests, activities and needs, made 
 still more complex by our long-established custom of distrib- 
 uting State funds among private institutions, doing or claiming 
 to do public work. 
 
 Every hospital, asylum and home singles out a forceful mem 
 betr to make the appropriation for that particular institution 
 his chief aim at Annapolis. Every State-aided college seeks an 
 alumnus member to champion, the cause of his alma mater 
 with the zeal of a Daniel Webster pleading for Dartmouth. 
 Every county leader holding office as chief of a Slate depart 
 ment, interests his delegation in tin 1 allotment I'm- thai branch 
 of the administrative service which his close range vision mag 
 nifies to be the very keystone of the governmental arch. As a 
 side Interest almost every member has a county road at borne 
 
 which he regards as the most important highway in the State 
 and wants improved and maintained as a part of the State 
 
 Roads System. Constituents and sponsors of the Senator or
 
 24 
 
 Delegate too often judge his record by the result of hi*s efforts 
 to secure the coveted appropriation. Throughout the session 
 these ultimate aims influence votes and alignments on men and 
 measures. Messrs. Campbell, Gorman, Benson, Price and Wil- 
 kinson, during years of service at Annapolis, have struggled to 
 restrict the appropriations to State-wide projects in commen- 
 surate amounts, but have found it impossible to contend against 
 the combinations effected to compel favorable reports on local 
 appropriations and on additions to the regular bills which have 
 resulted in making the total expenditures exceed the highest 
 estimate of State revenues. 
 
 These over-appropriations have been going on for years, but 
 somehow or other the State Treasury stood the strain until last 
 year, when the Comptroller announced that the appropriations 
 mado by the Legislature of 1914 could not be met. Then fol- 
 lowed the report of Mr. Harvey S. Chase, who had been retained 
 to examine and report on the State's finances, and it was dis- 
 closed that on January 1, 1916, the Treasury of Maryland faced 
 a deficit of one and one-quarter millions, representing not mere 
 gratuities to private institutions only, but unpaid appropria- 
 tions for the maintenance of such State agencies as the Tuber- 
 culosis Sanatorium, Springfield, Spring drove and Crownsville 
 Asylums for the Insane, the Rosewood School for Defectives, 
 the Workshop for the Blind, the House of Correction, the ('on- 
 federate Home at Pikesville, and many others. The total later 
 grew to $2,000,000, which was paid by the proceeds of a bond 
 issue, tn meet the principal and interest of which, the people of 
 Maryland will be taxed for the next 10 years. Thus, for the 
 first time in 75 years, and perhaps for the first time in the his- 
 tory of the State, "Maryland is paying current expenses out of a 
 bond issue. 
 
 In attempting to shift the blame, certain legislators claimed 
 thai the ( rovei nor should have totaled the mass of omnibus, gov- 
 ernmental, special and local appropriation bills, and have vetoed 
 the excess sum. The friends of the Governor urged with justice 
 that as the Constitution reposed the duty of appropriating pub- 
 lic moneys and raising the necessary revenue in the Legislature, 
 it was not fair to expect the Executive to use bis veto to save 
 the GreneraJ Assembly from the political consequences of its 
 misdeeds, especially when some of the bills appeared to have 
 been passed with full expectation thai the Governor would have 
 to veto them. Other legislators found fault with the Comp- 
 troller, and when thai official's friends pointed to bis report em 
 bodying a technical performance of the Comptroller's duties of
 
 25 
 
 estimating revenues and warning against extravagance, the law- 
 makers replied that the report was not intelligible anyhow ; that 
 the warnings against extravagance had been couched in the 
 same language for a generation by successive Comptrollers, 
 and as each Legislature had disregarded them, so had the Legis- 
 lature of 1914. Here the attempt to shirk the responsibility 
 still remains — the Governor, Comptroller and Assembly (as a 
 newspaper cartoonist represented it) standing in a ring, each 
 pointing an accusing finger at the other, with no end to the 
 circle of censure. 
 
 The truth of the matter is that the system is faulty in that it 
 supposes the Legislature to possess the knowledge, have the time 
 and be the place to formulate a State financial scheme with a 
 finely adjusted and balanced schedule of revenues and appro- 
 priations. After an experience of three sessions as a member 
 and another session as an officer of the General Assembly, I 
 say without any reservation that the legislators are just as hon- 
 est and conscientious in the discharge of their duties as are busi- 
 ness and professional men in attending to the matters intrusted 
 to them, but it is only too true that the average member repre- 
 sents his county- only, cannot see or understand the State as a 
 whole, and never does acquire an adequate understanding of the 
 State's finances. The Governor, as the officer who does repre- 
 sent and understand the entire State, and is accountable to all 
 the pc?ople, should be charged with the task of framing financial 
 policies, determining the avenues of State expenditure, and 
 especially so as he has to carry out the provisions of the en- 
 acted measures. The wholesome check upon this power is thai 
 the Legislature must approve the plans, policies and recom- 
 mendations of the Governor. 
 
 Before condemning this method of placing the responsibility 
 on the Chief Executive of the State, it should be remembered 
 that this is the last resort of those who have sought a remedy 
 for the present unsatisfactory condition. Means d\' improve 
 mi nt and correction by internal changes have been tried I ,\ 
 earnesl legislators seeking a remedy. The legislative committee 
 system lias been condemned on the ground that a small body 
 should not control the appropriations. The committees have 
 been enlarged and even doubled, with a corresponding increase 
 in the appropriations as a result. As another expedient, the 
 money bills have been distributed among several committees, 
 with the consequence, as in Congress, where it was tried, thai 
 the appropriations have grown to a billion dollars, and more 
 recently t'> nearly two billion dollars. To correcl the trouble
 
 26 
 
 constitutional amendments have been adopted in many States, 
 including - Maryland, giving the Governor the right to veto indi- 
 vidual money items, and the Executive has usurped the further 
 power of reducing items. The creation of advisory bodies, such 
 as the Maryland Board of State Aid and Charities, has made 
 but little improvement. The performance by the Governor and 
 the Comptroller of their constitutional duties of informing the 
 Legislature of the condition of the State, with recommendations 
 concerning the increase of revenues and curtailment of expendi- 
 tures, has produced no appreciable betterment. Maryland has 
 tried all previous expedients and has a $2,000,000 over-appro- 
 priation to meet. The real remedy is to place the responsibility 
 on the Governor, and to impose the duty in such a way that he 
 cannot evade it. Let him get such assistance as he may see fit, 
 but the responsibility must be his, and for the performance of 
 his duty he is accountable to the people of the State. This fea- 
 ture of executive initiative of and responsibility for financial 
 policies, as contained in the Maryland budget amendment, has 
 the indorsement of President Wilson, former President Taft, 
 Dr. Goodnow and Dr. Cleveland, and of many experienced mem- 
 bers of Congress. 
 
 In the discussion of the budget amendment it must not be for- 
 gotten that the plan of raising revenue and the schedules of 
 appropriations originated by the Governor require legislative 
 approval. The Legislature may strike out or reduce items of 
 general appropriation. It may make supplementary appropria- 
 tions provided it raises the revenue by taxation, which is an 
 effective check against local appropriations and the creation of 
 a deficit. Congressman Fitzgerald, for years chairman of the 
 Committee on Appropriations of the United States House of 
 Representatives, goes so far as to suggest depriving the indi- 
 vidual member of the right to initiate appropriation measures. 
 The Maryland budget plan docs not go to this extreme, but it 
 does provide that if a member introduce and the Legislature 
 pass a supplementary appropriation bill the necessary revenue 
 must be raised then and there by direct or indirect taxation. 
 
 I hope there will be no attempt to argue that the budget plan 
 gives the Governor too much power. For many years the 
 Maryland Legislature has passed its appropriation bills in the 
 last hours of the final days of the session, then adjourned and 
 left the Governor with absolute power to veto any or all appro- 
 priations, and in recent years to decrease the items at will. The 
 Executive has refused to exercise this power to prevent a dnficit, 
 claiming that the duty is imposed on the Legislature. The pro-
 
 27 
 
 posed amendment gives the Governor the power before, instead 
 of after, action by the Legislature, and locates without possibil- 
 ity of evasion, the responsibility for devising the fiscal arrange- 
 ments of the State, which responsibility now is distributed 
 among 129 men, each politically accountable only to the voters 
 of a single county or district. No one familiar with legislative 
 methods in Maryland can truthfully say that there is anything 
 revolutionary in this part of the budget amendment. 
 
 Another important feature of the budget amendment is the 
 right which it gives to the Executive to appear and defend his 
 financial recommendations. That this is not revolutionary is 
 shown by a learned professor in one of our leading universities 
 who in a recent article contends that this was the plan that the 
 frarners of the United States and State constitutions had in 
 mind, but that in practice we have widely departed from it. 
 That a return to the original procedure or the adoption of the 
 innovation is necessary the leading authorities and students of 
 our governmental system all agree. Our own experience in 
 Maryland shows how necessary it is for the Executive to be 
 able to enter the legislative councils and face those combatting 
 his financial policies in order that the people may learn the 
 merits of the controversy. More than one Governor in Mary- 
 land has bartered State offices for progressive financial legisla- 
 tion. At each session for years an astute old county leader ha? 
 caused his delegation to revolt and vote against administration 
 measures until he has obtained the political pelf that he de- 
 mands. A Governor who has arrayed against him the corrupt 
 among the political bosses frequently finds the chairmen of com- 
 mittees picked from among the opposing faction and is power- 
 less to advance his plana until he makes terms with his enemies. 
 The right to come before the Legislature in person and in the 
 white light of publicity explain his plans and expose the motives 
 of his opponents will be a tower of strength to an honest execu- 
 tive and will enable him successfully to fight the "invisible 
 government". With this right the Budget Amendment endows 
 the Governor of Maryland. 
 
 It has been advanced that the adoption of the budgel system 
 would drain the Legislature of its political power and reduce 
 that body to the condition of City Councils since the inaugura 
 tion of boards of estimates. This is far from true. It would 
 make the General Assembly a forum of debate and delibera 
 t.ion — its proper sphere — which it is 'far from being today. 
 When the Governor's bills shall have been introduced early in 
 the session, as required, the proceedings will be well worth
 
 28 
 
 attending. For instance, should the Governor recommend an 
 appropriation to bridge Sinepuxent Bay, on the Eastern Shore, 
 the interrogatories put to the Executive by the Western Mary- 
 land and Baltimore City members would be enlightening. Were 
 the Governor to advocate the donation of money from the State 
 Treasury to erect a large building for the Methodist College at 
 Westminster, it would be refreshing to hear from the member 
 from the Tenth Ward of Baltimore City. Did the Governor but 
 suggest the construction of a road in Anne Arundel County 
 paralleling another completed State road at no point over one 
 and three-quarter miles apart, and over the vigorous protest of 
 the State Roads Commission, it would be entertaining to hear 
 from the Delegates from Washington County, that great tax- 
 paying county of Western Maryland, with but one State road 
 within its broad confines. Let the Executive's recommenda- 
 tions include such a strange provision as an appropriation for 
 the State to buy 200 copies of that law book, "Contest of Wills," 
 the remarks of the members from frugal Frederick would be 
 plain and to the point. And yet bills containing these items 
 have been passed in the last days of recent sessions without a 
 dozen members knowing that they were included. Far from 
 deteriorating, the Legislature under the budget procedure would, 
 on the contrary, develop into a body of constant inquiry where 
 the appropriations in the Executive's bills would be carefully 
 weighed and all found wanting be eliminated. F'or membership 
 in such a body the best equipped of our public-spirited citizens 
 would contend and there find full play for the exercise of their 
 talents. 
 
 As the Budget Amendment embraces the features of the plan 
 indorsed by the State platforms of both political parties, it 
 should receive the vote of every loyal party man, and as it will 
 safeguard the public revenues and effectually prevent a future 
 deficit in the State Treasury-, it is entitled to the support of 
 every citizen of Maryland who has the good of his State at heart.
 
 29 
 
 BUDGET SYSTEM MERELY A CHANGE IN PROCEDURE. 
 
 (Baltimore Sun, Sept. 25, 1916.) 
 
 By Francis ISTeal Parke. 
 
 The proposed budget system is submitted to the voters of 
 Maryland as a tested and approved method of securing economy 
 and efficiency in public finance, through a union of power and 
 responsibility, without violating the integrity of the legislative, 
 judicial and executive branches of the government. 
 
 The taxpayers have seen and endured throughout many years 
 a constantly increasing burden of taxes and imposts by reason 
 of steadily mounting expenditures, voted by the General As- 
 sembly. This weight of taxation grew while every political 
 party advocated and promised economy, when every official was 
 pledged to it, and when every legislator affirmed it to be his one 
 inviolable principle. With no significant exception, these pro- 
 fessions were intended — whether through motives of principle 
 or of expediency is immaterial — to be translated into action. 
 Every legislator, every public official and every political party 
 knew that economy was indispensable to personal and party pre- 
 ferment and power, yet the distinguishing characteristic of leg- 
 islative appropriations was waste and extravagance. 
 
 As the indignant citizen reviewed the work of the Legislature 
 and paid his heavy taxes, he found himself charging the Legis- 
 lature with being extravagant and corrupt. Yet when the voter 
 turned to the individual members of the House of Delegates and 
 of the Senate he found them to be, in the main, if not of capa- 
 city, at least honest, economical and patriotic; — average men 
 whose personal character and the result of their political course 
 were anomalous. As the nature of its units must determine 
 the nature of the mass, so a representative body whose individ- 
 ual membership is preponderantly upright, intelligent and fru- 
 gal will mil legislate in a wasteful and extravagant manner, 
 unless the methods by which the individuals act as a body pre 
 sent insuperable obstacles to the play of their uprightness, intel- 
 ligence and frugality. 
 
 A survey of legislative bodies in action discloses thai tin- fatal 
 impediment to economy and efficiency, and tin' cause of acts 
 being passed inconsiderately, is tin procedure of referring all
 
 30 
 
 bills calling for appropriations to comparatively small commit- 
 tees, which, by reason of the volume, complexity, difficulty and 
 gravity of their duties, almost necessarily hold the bills in com- 
 mittee until they are finally consolidated in one or two huge 
 acts and presented to the Legislature when it is about to ad- 
 journ, and then precipitately passed without an expiring Legis- 
 lature having adequate knowledge of their contents or the time 
 for pausing to acquire it. By this procedure the General As- 
 sembly has virtually abdicated its powers and transferred them 
 to the two committees of Finance and Ways and Means. While 
 it is conceded that the vast bulk of business cast upon a biennial 
 legislative body can be dispatched only by a division among com- 
 mittees, yet experience has demonstrated that this procedure is 
 too dangerous and costly in the granting of appropriations and 
 the raising of revenues, and must be reformed. "Whilst insti- 
 tutions directly repugnant to good management are suffered to 
 remain, no effectual or lasting reform can be introduced," writes 
 Burke. 
 
 The fundamental defects of the existing legislative procedure 
 with reference to bills affecting public finance are the substan- 
 tially complete surrender to committees of a vital function of 
 the legislative body, and the uncontrolled exercise of this func- 
 tion by the committees in comparative, if not actual, secrecy. 
 The present procedure leaves the individual member in the 
 dark as to the various items of appropriations, denies him time 
 to weigh the merits of the items of the appropriation measures, 
 throttles discussion and compels precipitate action in the tur- 
 moil, confusion and exhaustion of the closing days of the ses- 
 sion. Because of the impossibility of locating individual re- 
 sponsibility for what is done in the dark by unknown authors, 
 the public has long since become apathetic to these conditions. 
 
 No matter what may bo the capacity, the intelligence and the 
 frugality of legislators, ignorance of what they are called upon 
 to do and an absence of an adequate opportunity for considera- 
 tion, debate and deliberation, with haste in the doing of it, 
 result uniformly in wasteful, extravagant and pernicious ap- 
 propriations of money, and make log-rolling inevitable and an 
 apparently natural method of legislation. While statesmen and 
 political economists and the experience of well governed coun- 
 tries have pointed the way to remedy this disastrous procedure 
 in the preparation and passage of appropriation and revenue 
 measures, the people of Maryland were not awake to its grave 
 import to them until aroused by a huge deficit and the necessity 
 cf providing for current expenses by public loans, "which," as
 
 31 
 
 Bagebot pertinently observes, ''under ordinary circumstances 
 are shameful." 
 
 Tbe accepted reform to correct tbe evils of committee rule in 
 fiscal matters is a budget system, which will modify the proced- 
 ure in framing appropriation acts, but which will'not affect the 
 wise and deeply rooted principle of our governmental structure 
 that the General Assembly shall vote all appropriations. 
 
 In the first place, the present secrecy attending the framing 
 of appropriation bills, which is provocative of injustice, inequal- 
 ity and prodigality, will pass with the adoption of the budget 
 system. The Legislature will no longer act in ignorance, but 
 with full information from an authoritative source of the re- 
 sources, liabilities and financial condition of the State; of the 
 proposed appropriations, and of their effect upon revenues meas- 
 ured in terms of estimated deficit or surplus, and of their sig- 
 nificance and necessity when judged by similar appropriations 
 of the two preceding fiscal years. And this information will be 
 imparted within the first 20 days of the session in a digested and 
 easily available form, with the items classified and clearly item- 
 ized, and regularly and methodically arranged. Not only will 
 every dollar and every object of the bills be known to every 
 member of the General Assembly, but the press — the great organ 
 of publicity — will know, and every citizen may know, the con- 
 tents. Complete publicity is assured, and no more indispen- 
 sable and efficient guardian of the public purse can be provided. 
 
 In the second place, with the early submission of the budget 
 and a full knowledge of its proposals, the Legislature will be 
 freed from the dominion of its committees, and will have an 
 opportunity to consider, weigh and discuss its provisions with 
 the care, deliberation and publicity which so important a meas- 
 ure demands. In short, the Legislature will regain its consti- 
 tutional function as a deliberate bodv and as the controlling 
 power in the granting of money and imposing taxes. Tn the 
 third place, the budget system will fix responsibility. While 
 power is restored to the legislative body by the budget, it ini 
 poses upon each legislator a responsibility which must be dis 
 charged in such a manner as to enable his constituents to re 
 ward or punish him for his act. 
 
 The limitation upon the Legislature that it may u.it increase 
 any item in the budget bills submitted by the Governor, except 
 those relating to the General Assembly and the judiciary, is no1 
 an impairment of any legislative power, as it merely amounts 
 to the Governor advising the Legislature at the beginning of
 
 Z'2 
 
 the session that he will not approve a specific appropriation for 
 more than a designated amount. 
 
 In effect, it is a veto at the beginning of the session, instead 
 of one at the end, when a veto usually is final because the Legis- 
 lature has adjourned and, of course, has no chance to act. 
 Should the Legislature desire to make a given appropriation 
 larger than was provided by the Governor in the budget, it may 
 do so, after action upon the budget, by passing a special act and 
 providing therein the revenue necessary for the amount thus 
 appropriated. 
 
 The more the budget plan is examined the more conclusive it 
 appears that the amendment will not impair the power of the 
 Legislature over all appropriations and revenue measures, but 
 will correct a disastrous procedure in legislation now preventing 
 the proper discharge of that power. ]STor has power been con- 
 ferred upon the executive at the expense of either the legislative 
 or judicial departments. 
 
 In designating the Governor as the author of the budget, the 
 proposed constitutional amendment has made specific the gen- 
 eral requirements of the Constitution that "He shall from time 
 to time inform the Legislature of the conditions of the State, 
 and recommend to their consideration such measures as he may 
 judge necessary and expedient.'' In imposing upon the Gov- 
 ernor the onerous responsibility of preparing a budget, it was 
 believed that as the first citizen and the executive officer of the 
 State, he was logically the State official to prepare the budget. 
 The Governor is always at the heart of public affairs. Through 
 the hierarchy of State officers, he is daily brought in contact 
 with the administration of public affairs in every portion of the 
 State. He gathers better than anyone else the public aspira- 
 tions, views and necessities, and he knows the urgency of par- 
 ticular public demands and their comparative importance. Oc- 
 cupying tin's unique position, and having a knowledge and vision 
 coextensive with the boundaries of the State, the Governor is 
 best qualified to prepare the budget. ' 
 
 Moreover, the Governor will act under a greater sense of re- 
 sponsibility and with more incentive to produce an acceptable 
 budget than any other State official or group of officials by rea- 
 son of his conspicuous position, natural pride of place, and a 
 desire for honor, public esteem and approval. Furthermore, no 
 one else bears the same weigh 1 of political responsibility — be- 
 cause the Governor is the titular, if not the real, lender of a 
 political party, and he cannot afford fo make mistakes. If his 
 budgets are not distinguished by wisdom, skill and economy.
 
 :VS 
 
 and if they improvidently increase the burden of the taxpayer 
 neither he nor his party will survive. 
 
 On the contrary, a brilliant budget will bring' rich reward to 
 its author and his party. 
 
 No on< Isi should share this power and responsibility with 
 the Governor. He must stand in a splendid isolation. With 
 both power and responsibility in him exclusively, the Governor 
 may deny neither, and thereby a timid Governor will be sup- 
 plied with a backbone by his power, and a bold executive will be 
 restrained by his responsibility. With a Governor of either 
 type, the people, knowing that he has both power and responsi- 
 bility, will reward or punish a worthy or a recreant executive 
 according to his deeds. 
 
 If tla i Board of Public Works, or any other group of two or 
 more officials, had been designated to prepare the budget, there 
 would have been a division of power and of responsibility among 
 the entire number with no certainty as to -which would be re- 
 sponsible for this or that portion of the budget. And the greal 
 principle and safeguard of individual and unescapable respon- 
 sibility for the exercise of power would have been sacrificed. 
 In addition to tin se objections, there are some peculiar to the 
 Board of Public Works, which arise from the fact that two of 
 members are elected by the people, and one by the Legisla- 
 ture; that two hold office for two years and one tor four years. 
 and that while they generally are, yet none need be. of the same 
 political party. All these things would make for confusion, 
 conflid and cross-purposes, and diminish political responsi- 
 bility. 
 
 The experience of civilized mankind is that efficiency and 
 economy in Government follow where power and responsibility 
 are united, and the earlier this principle is adopted in Maryland 
 thr better it will be tor the Commonwealth.
 
 34 
 
 THE A=B=C OF THE BUDGET PLAN. 
 
 (Baltimore Sun, Oct. 2, 1916.) 
 By Joseph D. Baker. 
 
 Question — What is the budget? 
 
 Answer- — Simply a commonsense way of transacting busi- 
 ness. The Government ascertains first how much money it will 
 have for general expenditures in the year, and then divides that 
 sum between its departments and institutions, and the private 
 institutions it desires to aid. The budget means order and fore- 
 sight. 
 
 Q. — Do you mean to say that has not been the rule in the 
 past in handling the finances of the State of Maryland ? 
 
 A. — Unfortunately, that has not been the rule. Otherwise 
 the State would not have had to borrow the huge sum of $2,000,- 
 000 to meet a deficit in its general treasury ; it would not have 
 had to borrow that sum to pay current expenses which should 
 have been met with current income. 
 
 Q. — Well, what system has the State used in handling it- 
 finances ? 
 
 A. — The 129 members of the Legislature have done the best 
 they could, without having any system worthy the name. The 
 only information they had about expected receipts was the gen- 
 eral estimate included in the Comptroller's report. They had 
 only the most haphazard information about the needs of the 
 departments and institutions seeking appropriations. And most 
 of the 129 members were men who had had no previous experi- 
 ence in legislative work and, consequently, were totally unfa- 
 miliar with the business of distributing the State's money. 
 What happened was this: Nearly every fellow made it his busi- 
 ness to look after the department in which he had friends, or 
 the institution situated in his locality. Pressure from home 
 made him <!<> that. Then he found that if he were to get what 
 he asked he had to lot the other fellow get what he asked. Tt 
 was '-Kiss me and I'll kiss you." The men who did that were 
 nut bad; most el' them were good, decent fellows: they simply 
 followed the line of least resistance. But the result was bad, 
 beeause nearly everyone was interested in getting through one 
 iir more appropriations, ami hardly anyone was interested in
 
 35 
 
 keeping them down. The end of it all was a great over-appro- 
 priation, and the State was compelled to borrow that $2,000,000 
 in order to make the over-appropriation good. 
 
 Q. — You say that under the budget system the State will as- 
 certain how much money it will have, will limit its expenditui •■- 
 to that amount and then will divide it. Will you explain more 
 fully the details of that plan ? 
 
 A. — Some months before the Legislature meets the Comp- 
 troller will hand the Governor an itemized statement of the 
 expected receipts for each of the next two years. The Governor 
 will deduct from the amounts for each year such sums as will 
 be necessary to meet the expenses of the Legislature and the 
 judiciary, to pay the salaries of officials and to meet other ex 
 penses prescribed by the Constitution or the laws. These 
 amounts will be in the nature of fixed charges. When they 
 have been deducted what remains will be available for general 
 appropriations. 
 
 Then the Governor will have each State department and in- 
 stitution, and each private institution seeking State aid present 
 to him a statement of its needs. That statement must be in 
 detail, and will be made public. It must show how much is 
 needed for each purpose. It also must show how much, if any 
 thing, was spent for that purpose in the previous year. When 
 the Governor has studied all this information, he will frame 
 budget bills, dividing the available money among the depart- 
 ments and institutions. These bills then will go to the Legis- 
 lature. 
 
 Q. What will the Legislature do with them ? 
 
 A. — It may strike out or reduce any appropriation. 
 
 Q. — Why is it given that power? 
 
 A. — So that the representatives of the people will have a 
 check upon the Governor. If he abuses the trust given him 
 and improperly favors some institution with a too high appro 
 priation, the Legislature can reduce or eliminate it. 
 
 Q. — Can the Legislature put items into the budge! bills Oi 
 
 increase ones put in by the Governor^ 
 
 A. — No. If that could be done the door would be opened 
 again for a mad scramble by each of the I 29 legislators to in 
 
 crease the appropriations to \\\r departments or institutions in 
 which he was interested. And thai would mean danger of an 
 other ovi r appropriation and another deficit. 
 
 Q. Bu1 suppose the Governor had a grudge againsl some 
 institution and did not give it its fair share of money. It' tin
 
 36 
 
 Legislature could not increase the appropriation to that institu- 
 tion would it not be subjected to great injustice? 
 
 A. — Provision is made for such contingencies. The Legisla- 
 ture may pass special acts of appropriation, if it provide in 
 them for revenue sufficient to meet the sums appropriated. In 
 case the. Governor treated some institution unjustly the Legis- 
 lature could meet the situation with that machinery. 
 
 <,). — Will not that power lead to the Legislature again piling 
 up excess appropriations? 
 
 A. — If it should, there could not be another deficit, for each 
 such appropriation act must cany provision for its own pay- 
 ment. And it is improbable that the power will be abused. It 
 is easy to get an appropriation through the Legislature, but it 
 is hard to get through new taxation to meet it, unless the pur- 
 pose be clearly good. New taxation hits some or all of the peo- 
 ple, and must be explained satisfactorily to them. 
 
 Q. — Is not the power to frame the budget bills too much 
 ] lower to put into the hands of one man, the Governor ? 
 
 A. — He has as much power now, and there has been no charge 
 of almse. The Governor may veto any appropriation made by 
 the Legislature. And as appropriation bills for years have been 
 passed too late to override the veto, the Governor has had an 
 almost absolute power. He really will have less absolute power 
 under the budget system, for the Legislature will have ample 
 time to reduce or eliminate any item he may put in the budget 
 bills, or to pass special acts appropriating money — and provid- 
 ing the revenue — for any purposes be may have neglected. 
 
 The important difference between the old way and the budget 
 i- (hat in the past the Governor acted upon appropriation bills 
 in the hurry and turmoil of the end of the legislative session. 
 
 aJ 
 
 when it was practically impossible for him carefully to consider 
 the purpose for which appropriations were made; whereas, un- 
 der the budget system, he will have months to go over the entire 
 1. Harness and to act carefully and deliberately. 
 
 As said before, the budget is simply a commonsense way of 
 transacting business, and the commonsense of the people should 
 make certain its adoption in the November election.
 
 37 
 
 THE FACTS CAUSING THE NECESSITY OF A BUDGET. 
 
 (Baltimore Surij Oct. 9, 1916.) 
 JBv 45. Howell Gbiswold, Jr. 
 
 Let us glance at the State'.- recent financial history. 
 
 Gross Debt — The gross bonded debt of the State is reported 
 as follows : 
 
 In L906 the State owed $6,167,926.13 
 
 In 1916 the State owed 26,285,880.:.:. 
 
 Increase in 10 years $20,117,954.42 
 
 \( r Debt — The State's net debt is reported as follows: 
 
 L906 $838,201.41 
 
 L916 17,869,613.96 
 
 [ncrease in 10 years $17,031,412.55 
 
 Note that within the brief period of 10 years the State has 
 passed from a position practically free from debt to the position 
 of a debtor owing nearly 18 millions of dollars. 
 
 Yearly receipts and expenditures (not including bond pro- 
 ■ i « ds i : 
 
 1896. 1906. 1915. 
 
 Receipts $2,544,091.84 $4,388,460.07 $7,476,337.36 
 
 Disbursements... 2,744,036.27 4,036,000.78 7,267,719.83 
 
 Note thai the State now receives and expends nearly five 
 millions of dollars more in a year than it did 20 years ago and 
 about three millions more a year than it did 10 years ago — thai 
 is to say, our "living expenses" have increased nearly 200 per 
 cent in 20 years and aboui 80 per cent, in 1" years. 
 
 Tax Rate : 
 
 In L906 :y;i., cents. 
 
 In L916 32 l 3 cents. 
 
 Note thai while our assessabli basis in lo years has increased 
 50 per cent., onr (ax rate at the same time has increased aboui 
 M» per cent. 
 
 The purpose of this comparison is nol to indicate thai the 
 State's money has been wasted thai is a dififerenl problem.
 
 as 
 
 For example, a very substantial portion, of the proceeds of our 
 loans has gone into State roads. The purpose is to show how- 
 rapid has been the growth of the State's receipts and expendi- 
 tures and to emphasize how vital it is to the taxpayers of the 
 State that a proper system be introduced at once which will 
 lend to check all waste. 
 
 Injury to the State. 
 
 A man running a small business may struggle along, running 
 into debt before knowing what his income is going to be, but 
 the man who tries this on a million-dollar scale is headed for 
 bankruptcy. 
 
 The State of Maryland has been appropriating money in 
 years past — millions of dollars — without an accurate statement 
 at hand as to where the money was to come from. 
 
 The inevitable result was that the State began to live beyond 
 its income some years ago, attempted to recuperate by increas- 
 ing the tax rate, and finally "blew up" in 1914 with a big def- 
 icit. 
 
 The people of the State were aroused. Both parties found it 
 expedient to give to the voters a solemn pledge that a budget 
 sysetm would be enacted into law which would prevent a recur- 
 rence of such a condition of affairs. 
 
 One Debt Paid With Another. 
 
 The State has now paid off its creditors and many people feel 
 comfortable again. But it's like the man who gave a new prom- 
 issory note to take up an old one and said, "Thank heaven, that 
 debt's paid." 
 
 For the State paid off its creditors by selling $2,000,000 of 
 bonds, which must in turn be paid by taxing the people of the 
 State for the next 15 years. 
 
 Are we going to let this happen again? 
 
 The Voter's Chance. 
 
 The Democratic party has fulfilled its pledge so far practi 
 cally to the letter. A Democratic Legislature voted in favor of 
 and a Democratic Governor signed a bill submitting to the pe<> 
 pie this fall a constitutional amendment which will prevent the 
 recurrence of a deficit and do more than any other single act to 
 reduce the useless expenditure of State money. This law also 
 received the support of "Republicans in fulfillment of their party 
 pledge.
 
 39 
 
 1 1 is now up to the voters of the State. Will they allow their 
 own lethargy or neglect to defeat their best interest? If so, 
 they will pay heavily for it in cold cash in the years to come. 
 
 Do not let anyone fool you on this and discuss theories. with 
 you. The simple fact is that if the budget amendment is not 
 passed this fall the taxpayers of the State will pay heavily for it. 
 
 How the Budget Amendment Was Framed. 
 
 The amendment has been so fully and ably explained by my 
 associates on the Goodnow Commission that it is a waste of 
 space to repeat this explanation in different terms. 
 
 The framing of the amendment required several months of 
 bard work by members of the commission. The proposed sys- 
 tem is founded on elementary requirements of exact business 
 adjusted to governmental needs and sound principles of govern- 
 ment. It represents the composite judgment not only of the 
 members of the commission, but of manv men called into con- 
 icrence — the leading constitutional lawyers of the State, men of 
 wide experience in State finance and in practical government, 
 officials and former officials of the State of Maryland — all giv- 
 ing their time and advice freely to help solve this question which 
 is of such vast importance to the taxpayers of the present as 
 well as to the future prosperity of our State. 
 
 The Kind of Objection That May be Raised. 
 
 Every State has in it men who express doubts on any big 
 proposition. No man's voice has been raised in open opposi- 
 tion to the budget system. Objections to details of the plan pre- 
 pared by the Goodnow Commission have been brought forward. 
 This was to be expected. 
 
 No one. for example, would question the necessity of having 
 a Court House in a big community. Some people however, 
 would have it of stone, some prefer green window shadi - and 
 some a slanting roof. 
 
 The man who would say that the Court House should not be 
 erected until all the people are prepared to agree with his own 
 taste as to details lias lost his sense of proportion. 
 
 And yet you will perhaps find men small-minded enough to 
 advise that a reform of greal benefit to the State be rejected 
 because one or two details do not satisfy their particular points 
 of view.
 
 40 
 
 Vote for the Amendment. 
 
 We have this amendment before us — we have a remarkable 
 opportunity. I do not believe that sensible voters will allow big- 
 phrases from small men critcizing diminutive technicalities to 
 influence their judgment against their own best interest, No 
 ether form of argument can be used against the amendment. 
 
 The taxpayers' money is a trust fund. The men who pay 
 taxes are entitled to have their money spent not only honestly 
 but wisely, economically and with foresight. No State can do 
 this thoroughly without a budget system. 
 
 Every voter should make a mental note now how to vote for 
 the budget amendment on November 7. 
 
 A SIMPLE STATEMENT OF THE BUDGET PLAN. 
 
 (Baltimore Sun, Oct. 16, 1916.) 
 
 By Dr. Frank J. Goodnow. 
 
 (President Johns Hopkins University. ) 
 
 The last few years have proved that the financial method- of 
 the State of Maryland should be changed. To provide the nec- 
 essary modifications in those financial methods is the purpose 
 of tli" constitutional amendment passed by the last Legislature 
 and to be submitted to the voters of the Stale at the coming 
 ( lection in November. 
 
 The budget amendment, as this proposed amendment has been 
 cdled. attempts to do the following things: 
 
 In the first place, its purpose is to place before the Legisla- 
 ture at the beginning of each regular session a complete picture 
 of the State's financial conditions, from the point of view both 
 of the revenues which are to be expected for the next two \< ars 
 and of the needs of the State for the same period. These esti 
 mates of revenue and expenditure are to be made up prior to the 
 assembling of the Legislature. They are to be based upon the
 
 41 
 
 statements of the different State officers and the heads of pri- 
 vate institutions asking for State moneys, supplemented by pub- 
 lic hearings, at which those asking for State moneys mav be 
 called upon to show what are their needs and whether they 
 have made an efficient use of the moneys guaranteed to them in 
 the past. 
 
 The Board of State Aid and Charities, which under the law 
 has certain powers over against State-aided institutions, may be 
 culled upon at such hearings or otherwise to give its judgment, 
 both as to the efficiency and needs of such institutions. The 
 per capita law passed by the last Legislature both makes neces- 
 sary the action of the board and facilitates the exercise of its 
 powers of supervision. 
 
 In the second place, the proposed budget amendment concen- 
 trates in the Governor both the powers and the responsibility 
 for making the estimates to be submitted to the Legislature. 
 
 Finally, the budget amendment provides that the Legislature 
 may not add new items to the estimates as submitted by the 
 Governor or increase items contained therein, except upon the 
 condition that if make provision for such increases by levying 
 special taxes therefor. The Legislature may, however, reduce 
 or strike out any items in the estimates except those neeessary 
 for fulfilling the financial obligations of the State. 
 
 The only real difference between the method proposed in the 
 budge! amendment and the present method is that the action of 
 the Governor is by the former had before, by the latter subse- 
 quent to action by the Legislature. At the present time the 
 Governor may through the exercise of his veto power determine 
 within the limits fixed by the Legislature the amount of even 
 appropriation. By the proposed amendment be must take action 
 under the public eve. By present methods he may act in the 
 M'crecv of the executive chamber. 
 
 Such rn brief is the scope of the proposed budget amendment. 
 Tt is bused, as all will recognize, on the charter of the City of 
 Baltimore, which has been in successful operation for almost 20 
 years, ^o one when called to vote for the amendmenl may feel 
 .rii\ hesitation aboul casting his vote in favor of an untried and 
 perhaps dangerous expedient. The experience which the ( ity 
 of Baltimore has had since 1808 lays the basis \'^v the expecta 
 tien thai nothing but good will follow the adoption by the peo 
 pie c\' the State of Maryland of the proposed budgH amendmenl 
 )<■ th< State Constitution.
 
 42 
 
 THE STATE BUDGET.' 
 
 ( Horace K. Flack. Department of Legislative Reference, 
 
 Baltimore, Md.) 
 
 I have been requested to prepare a statement showing par- 
 ticularly what the Constitutional Convention of the State of 
 jSTew York has done in regard to making provision for a scien- 
 tific State Budget. In view of the fact that this question is now 
 being discussed, relative to securing some form of state budget 
 for Maryland, it seems worth while to give a brief summary of 
 what has been done in other states in regard to this very impor- 
 tant matter. 
 
 Statements were quite freely made before the Committees 
 and Delegates of the New York Constitutional Convention, that 
 no state in this country had made provision for a really scien- 
 tific budget, and these statements seemed to have gone uncon- 
 tradicted. Efforts of course, have been made in a few states to 
 provide for a state budget, and the term "state budget" has been 
 used in a few instances to characterize these efforts. 
 
 Indiana seems to have been the first state to pass a law re- 
 quiring submission of a report containing recommendations for 
 the appropriations needed for the state departments and insti- 
 tutions, this law being passed in 1901. This law provides for 
 the appointment by the Governor within ten days after each gen- 
 eral election, of a committee of three members-elect of the Gen- 
 eral Assembly. It is the duty of this committee to visit and 
 investigate all the state penal, benevolent, educational, and re- 
 formatory institutions, and all state departments for which the 
 state makes appropriations, and to prepare and submit to the 
 Legislature a report, showing the appropriations recommended 
 for each department and institution. While this report and rec- 
 ommendation do not constitute a scientific budget, it' has been 
 3tated that it is a great improvement over the former method. 
 
 The State Board of Control of California has been given 
 authority to prepare a budget covering the financial needs of 
 
 This article was printed In the itaitimore Municiixii -lounuil of Sep- 
 tember 17, 1915. \'<. effort has been made to bring the article up-to-date, 
 bul if should be added that the proposed Constitution of New York. 
 which Included a provision for a State Budget, was defeated. No 
 
 opportunity, however, was given for a separate vote on the budget pro- 
 posal.
 
 43 
 
 the different state departments and institutions. The Board 
 divided the proposed appropriations under the two main head- 
 ings of General Appropriations and Special Appropriations. 
 The report submitted to the Legislature of 1915 by the Board of 
 Control gives a reference to the constitution or statute author- 
 izing the appropriation for each department or institution with 
 the amount of appropriation made by the preceding Legislature. 
 the amount requested by the department or institution and the 
 amount recommended by the Board. The total amounts re- 
 quested by the several departments or institutions amounted to 
 over $17,000,000, and the amounts recommended by the Board 
 of Control amounted to over $15,000,000, being a reduction of 
 a little more than $2,000,000. The total special appropriation 
 tequested, amounted to over $7,000,000, and the total special 
 appropriation recommended by the Board of Control amounted 
 to over $3,000,000, being a reduction of nearly $4,000,000. 
 The report submitted by the Board of Control also contained a 
 statement showing the estimated receipts. 
 
 The State Board of Public Affairs in Wisconsin submits a 
 budget to the Legislature containing the requests for appropria- 
 tions submitted to the Board by the various state departments 
 and institutions. The Board, however, makes no recommenda- 
 tions and it is stated by the Board itself that it does not regard 
 it as its duty to do more than gather the facts and requests of 
 the several departments and institutions, and to submit this data 
 in a systematic way for the use of the Legislature. The report 
 submitted by the Board of Public Affairs shows the actual re- 
 ceipts and disbursements for the three preceding fiscal years, 
 the estimated receipts and disbursements for the current year 
 and the appropriations requested for the ncx! biennial period. 
 The Board states that by means of this budget the Legislature 
 will be able to work out a final fiscal plan which will become the 
 official budget of the Legislature when adopted. The Board 
 also states that it is the purpose of the budget to give the Legis 
 lature lull and complete information in regard to financial facts 
 and to help the Legislature in determining policies and drafting 
 appropriation measures; p, substitute knowledge for guess, and 
 to develop an equilibrium between estimated receipts and esti 
 mated disbursements. It is stated that prior to L913 there was 
 no Legislative plan of appropriations, that appropriation clauses 
 were not uniform in language, ami that tin- appropriation meas 
 
 ures were scattered throughout the statutes and session laws. 
 The Legislature of 1013, however, adopted uniform phraseology 
 in drafting appropriation measures and a uniform plan of male
 
 44 
 
 ing appropriations. It was felt desirable to have all appropria- 
 tions, whether temporary or permanent, brought together in one 
 place. It was not considered wise., however, to make appropria- 
 tions for the individual departments and institutions in exhaus- 
 tive detail, since this would not give reasonable opportunity for 
 the officials to exercise judgment in administering the affairs in 
 their charge. The budget as proposed in Wisconsin, however, 
 does not demand the passage of a consolidated appropriation 
 bill, but seems to have been designed with a view to the prepa- 
 ration df separate appropriation bills for each department or 
 institution of the state. The Board points out that there must 
 be complete harmony between the classification of accounts as 
 used in the budget, and the classification of accounts as used by 
 the various departments in recoi'ding their disbursements. 
 
 In 1913, Ohio passed an act for the establishment of a budget 
 system for all state departments and institutions, and this act 
 -ciins to come nearer making provision for a scientific budget 
 than any act passed prior to that time. The Ohio act provides 
 for an executive budget, thai is a budget prepared by the Gov- 
 ernor for submission to the Legislature. This act makes it the 
 duty of all state officers and institutions to submit to the Gov- 
 ernor on or about the 15th day of November prior to the assem- 
 bling of the Legislature an estimate in itemized form, stat- 
 ing the amount of money needed for the next biennial period. 
 It is also made the duty of the State Auditor to furnish the 
 Governor with statements, showing the annual revenues and 
 expenditures on account of each appropriation for the preced- 
 ing four years, together with certain other financial statements. 
 The Governor is given authority to appoint competent disinter 
 ested persons to examine, without notice, the affairs of any de- 
 partment or institution for the purpose of ascertaining facts 
 and to make recommendations relative to increasing the effi- 
 ciency and curtailing the expenses therein. Under authority of 
 this law, the Governor appointed a Budget Commissioner who 
 prepared a very comprehensive budget which was submitted 
 to the Legislature in L915. This budget contained an item 
 ized statement offhe requests made by each department or insti 
 tution, very much on the order of requests which are submitted 
 by the Municipal Departments of Baltimore to the Hoard of 
 Estimates, tlie requests being given in the first column, and the 
 recommendal ion of the Budget ( iommissioner being given in the 
 next column. The budget as submitted also gave the appro 
 priations (<>v each of these items for the year 191 I. Following 
 the budget \'<<r eaeh department or institution, there was given
 
 45 
 
 the critical comment of the Budget Commissioner, containing 
 his reasons for the recommendations made by him. The budgel 
 as submitted consisted of 369 pages and was indexed, so that 
 it was quite easy Hot a member of the Legislature to find any 
 information desired. 
 
 A few other states have made some progress in improving 
 their system of making appropriations, lint as a general thing 
 the budget or appropriation bills are prepared by the legisla- 
 tive committees. The question of a proper budgel has received 
 cOnsiderabL attention in a number of states, and the Legislative 
 [nvestigating Committee appointed by the Alabama Legislature 
 in tin early part of the year submitted a report July L3, L915, 
 recommending that the state budget he compiled and submitted 
 to the Legislature by the Governor. The recommendation of 
 this Committee was to the effect that the budget include not only 
 an estimate of what amounts may be necessary for the conduct 
 of state affairs, but the method of raising the amount of reve- 
 nues necessary to meet tin* outlay. The Committee drafted a 
 bill to carry out their recommendation in this regard. The 
 Committee called attention to the practice there in which the 
 heads of departments and state institutions presented appro- 
 priation bills through some friend in the Legislature, and that 
 ibis system resulted in activities more or less akin to lobbying 
 for the purpose of bringing about favorable legislation and ap- 
 propriations. The following quotation is taken from the report 
 of the Alabama Committee: •"In the hurly-burly of a short 
 legislative session, the result is that appropriations do not re- 
 ceive the necessary consideration. The consideration that is 
 given is not; supported by any intelligent advice or investiga 
 tion, tin result being that the department, interest or institu- 
 tion which bas the most influential friends present obtains the 
 largest appropriation without reference to the relation the sev 
 era] departments bear to each other or the State. Alabama can 
 never enter on a high plane in the conduct of ]\< business affairs 
 until sonic more rational and business-like system is devised. 
 Throughout the country wbat is known as the budgetary law- 
 are coming to be considered by way of meeting the objections 
 described above. A budgel has been defined as, 'the financial 
 statement of the government for a definite period which reveals 
 in details the objects and amount of expenditure-, tbe source 
 and yield of revenues and the way tbe expenditures ami reve 
 nues aie made to balance'. It properly includes estimates both 
 
 of revenues as well as of expenditure-."
 
 46 
 
 The Alabama Committee also cites the fact that the Gov- 
 ernors of Alabama, Colorado, Massachusetts, Michigan, Minne- 
 sota, Nevada, New York, North Dakota, Tennessee, Washing- 
 ton and West Virginia, urge state budget laws. 
 
 It remained, however, for the Now York Constitutional Con- 
 vention -to propose a method for the state of New York which 
 is very similar to the budget prepared by a large number of mu- 
 nicipalities in this country. It has been noticed that the Ohio 
 budget is prepared by the Governor or under his supervision, 
 and that the proposed budget for Alabama provided for an 
 executive budget, but in no case has there been any restriction 
 placed upon the legislature as to its actions. The proposal as 
 adopted by the New York Constitutional Convention prohibits 
 the Legislature from increasing any item in the budget as sub- 
 mitted by the Governor, merely conferring on the Legislature 
 the power to cut' out or reduce any item. Provision is made, 
 however, for separate appropriation bills, but none of these can 
 be considered until after the budget as submitted by the Gov- 
 ernor has been finally acted upon by the Legislature. In view 
 of the very great importance of the subject and to the careful 
 study given to it by the New York Constitutional Convention, 
 it seems advisable to give the New York Proposal in full. The 
 proposed amendment as submitted by the New York Convention 
 is as follows : 
 
 Section 1. On or before the fifteenth day of November in the year 
 nineteen hundred and sixteen and in each year thereafter, the head of 
 each department of the State government except the Legislature and 
 Judiciary, shall submit to the Governor itemized estimates of appropria- 
 tions to meet the financial needs of such department, including a stale 
 ment in detail of all monies for which any general or special appropria- 
 tion is desired at the ensuing session of the Legislature, classified accord- 
 ing to relative importance and in such form and with such explanation 
 as the Governor may require. 
 
 The Governor, after public hearing thereon, at which he may require 
 the attendance of heads of departments and their subordinates, shall 
 revise such estimates according to his judgment. 
 
 Itemized estimates of the financial needs of the Legislature certified 
 by the presiding officer of each House and of the Judiciary certified by 
 the Comptroller, shall lie transmitted to (be Governor before the fif- 
 teenth day of January next succeeding for inclusion in the budgel with- 
 out revision, hnt with such recommendation as he may think proper. 
 
 on or before the first day of February next succeeding he shall submit 
 to the Legislature a budget containing ;i complete plan of proposed 
 expenditures and estimated revenues, it shall contain .-ill the estimates 
 so revised or certified mid shall be accompanied by a bill or bills for all 
 proposed appropriations and reappropriations, clearly itemized: it shall 
 show the estimated revenues for (he ensuing fiscal year and the esti- 
 mated surplus or deficit of revenues al the end of the current fiscal 
 year together With the measures of taxation, if any. which the <h>v 
 ernor may propose for the increase of the revenues. It shall be accom- 
 panied by a statement of the current assets, liabilities, reserves and sur-
 
 47 
 
 plus or deficit of the State; statements <>f the debts and funds of the 
 Slate: an estimate of its financial condition as of the beginning and 
 .■lid of the ensuing fiscal year; and a statement of revenues and ex- 
 penditures for the two fiscal years next preceding said year, in form 
 suitable for comparison. The Governor may, before final action by the 
 Legislature thereon, amend or supplement the budget. 
 
 A copy of the budget and of any amendments or additions thereto 
 shall be forthwith transmitted by the Governor to the Comptroller. 
 
 The Governor and the heads of such departments shall have the 
 right, and it shall be their duty, when requested by either House of the 
 Legislature, to appear and be heard in respect to the budget during the 
 consideration thereof, and to answer inquiries relevant thereto. The 
 procedure for such appearance and inquiries shall be provided by law. 
 The Legislature may not alter an appropriation bill submitted by the 
 Governor except to strike out or reduce items therein; but this provi- 
 sion shall not apply to items for the Legislature or Judiciary. Such a 
 bill when passed by both Houses shall be a law immediately without 
 further action by the Governor, except that, appropriations for the 
 Legislature and Judiciary shall be subject to his approval as provided 
 in Section 9 of Article IV. 
 
 Neither House shall consider further appropriations until the appro- 
 priation bills proposed by the Governor shall have been finally acted on 
 by both Houses; nor shall such further appropriations be then made 
 except by separate bills each for a single work or object, which bills 
 shall be subject to the Governor's approval as provided in Section 9 of 
 Article IV. Nothing herein contained shall be construed to prevent the 
 Governor from recommending that one or more of his proposed bills be 
 passed in advance of the others to supply the immediate needs of gov- 
 ernment. 
 
 The above proposed constitutional amendment was drafted 
 by the Finance Committee of the Convention after considering 
 seven or eight proposals relative to a State budget. One of 
 these proposals (No. 13) provided that there should he a Budget 
 Commission composed of the Governor (with two votes), the 
 Lieutenant-Governor, the Treasurer and the Comptroller. This 
 proposal gave the Legislature the power to diminish but nol to 
 increase the appropriations for any subject included in the 
 budget. Another proposal (No. 10) provided for the appoint- 
 ment of a Board of Estimate by the Governor, consisting of 
 3uch heads of departments and members of the Legislature as 
 he may select and of which he was to be chairman. This pro 
 posal also prohibited the Legislature from increasing any item 
 and it also contained a provision that no legislative enactmenl 
 should be attached to the annual appropriation bill. Proposal 
 No. 223 provided for the formulation of a Si ate budget by the 
 Governor with the advice of his council, composed of the Secre 
 tary of State, the Comptroller, the Treasurer, the Attorney 
 General, and State Engineer. This proposal, however, lefl the 
 Legislature free to amend the budget in any particular. Pro 
 posal No. 345 merely made it the duty of the heads <i\' all de 
 partments and institutions to submit to the Governor a -tate-
 
 48 
 
 rneiit, under oath, as to the appropriations needed for their re- 
 spective departments and institutions and for the transmission 
 of these requests, with his recommendations, to the Legislature. 
 Proposal No. 444 made it the duty of the Governor to prepare 
 a State budget and prohibited the Legislature from increasing 
 any item. This proposal also contained a provision to the effect 
 that if the Legislature failed to pass the appropriation bill, the 
 several departments might expend during the ensuing fiscal year 
 the same amounts as authorized for the current year. Provi- 
 sion was also made that no appropriation for any department, 
 other than those provided for in the budget, should be made 
 except by separate hill or bills, but that such separate bill or 
 bills should proceed to passage only when the Governor, in a 
 message to the Legislature, should have certified that there was 
 a public emergency requiring such appropriation. This pro- 
 posal would, of course, have made it impossible for the Legis- 
 lature to make any appropriation which did not meet the ap- 
 proval of the^ Governor before its passage. Proposal 5To. 470 
 was prepared largely by the ]NTew York Bureau of Municipal 
 Research and provided for the preparation of the budget by the 
 Governor. This proposal also required the Legislature to re- 
 solve itself into a Committee of tin 1 Whole not less than one day 
 each week, at which time the Governor and the heads of depart- 
 ments were to have the privilege of the floor to explain the esti- 
 mates of the appropriations recpiested and answer sneh ques- 
 tions as may be asked by members of the Legislature. The ap- 
 propriations for each department were to be considered sepa- 
 rately. The Legislature could not, of course, increase but could 
 decrease any item in the appropriation bill. When reported by 
 the Committee of the Whole, the budget or appropriation bills 
 were to take precedence over all other measures and no new sub- 
 ject or item could he appropriated except by separate hill, which 
 separate 1 hill might he vetoed by the Governor. This proposal 
 also gave the Governor authority to authorize the several depart- 
 ments to make the same expenditures as provided by the lasl 
 appropriation in ease the Legislature failed to pass the budget. 
 Proposal N"o. 646 provided tor the preparation of a budget by 
 the Governor, but unlike many of the other proposals, this one 
 gave the Legislature the power by a three-fourths vote to in 
 crease any item in the budget. 
 
 ft will he observed thai the proposed amendment as finally 
 submitted by the Convention contains some of the elements in 
 nearly all of the proposals as submitted. The Finance ('on, 
 mittee, which had charge of all proposals relating to the budget.
 
 49 
 
 was composed of very able men, among them being Messrs. 
 Henry L. Stimson, a member of President Taft's cabinet ; Seth 
 Low, former President of Columbia University and Mayor of 
 New York City ; Herbert Parsons, Robert F. Wagner, John B. 
 Stanchfield and Delancey Nicoll. This Committee had several 
 hearings on the subject and invited some of the ablest men in 
 the country to discuss the subject with them, among these being 
 former President Taft, President Goodnow, of the Johns Hop- 
 kins University; President Lowell, of Harvard University; Mr. 
 Fitzgerald, the Chairman of the Appropriations Committee of 
 the National House of Representatives ; and former Governor 
 Glynn, of New York. 
 
 Arguments foe aw Executive Budget. 
 
 The Finance Committee 1 , after careful consideration, reported 
 the amendment printed above on August 4th, at the same time 
 submitting a report covering twenty-two pages, in which the 
 Committee gave the results of its work and the; reasons for rec- 
 ommending the amendment in that form. It was pointed out 
 that the United States is substantially the only civilized coun- 
 try in which a scientific budget system is unknown and that this 
 applies both to the National and State governments. The Com- 
 mittee called attention to the fact that no financial plan is pre- 
 sented to our legislative bodies by the men who are responsible 
 for the conduct of government, and that no material whatever 
 for comparison with the past is presented by our executives, in 
 such a way that the Legislature and the public can understand 
 them and hold the spenders of public monies responsible, but 
 that on the contrary, our appropriation and revenue bills are 
 prepared in the "comparative secrecy of legislative committees 
 and rushed through in the hurry of the final days of a legislative 
 aession". The Committee also pointed out that the law of 
 1010 requiring the several departments of the State govern 
 ment to submit annual estimates to the Comptroller, for sub- 
 mission by him to the Legislature, has proved of little or no 
 value, since the only function of the Comptroller was to assem 
 ble these estimates and transmit them to the Legislature. The 
 result was thai every departmenl made the estimates so high 
 that very little attention was paid to them. The reporl of the 
 Committee, which was approved by every member with a single 
 exception, was to the effect that the Legislature was noi the 
 proper branch of government to initiate the budget, for the fol 
 lowing reasons:
 
 50 
 
 (1) That the proper function or work of the Legislature is 
 legislative and that it has no administrative control or authority 
 over the several bureaus and departments and that it could not 
 exercise executive supervision to produce the desired result for 
 less money by adopting a more efficient method. "In a word, 
 it cannot produce the constant necessary team play and co-opera- 
 tion which is essential to economy." 
 
 (2) That the members of the Legislature are each respon- 
 sible to and dependent upon a single district of the State and 
 not responsible solely to the State as a whole. As a result of 
 this, any financial program prepared by the Legislature neces- 
 sarily tends to represent a compromise or bargain between differ- 
 ent districts, this process being stigmatized by the terms "log 
 rolling" and "'pork barrel". 
 
 (3) That the preparation of the budget by the Legislature 
 tends to shield it from real criticism;, since no body can ade- 
 quately criticise its own work. If, however, the budget is pre- 
 sented by the Executive, it will receive criticism and sugges- 
 tions even from members of the party to which the Executive 
 belongs, since the viewpoint of the man who grants money is 
 different from that of the man who asks for it. Under present 
 methods, the man who makes up the budget or appropriation 
 bill is one who leads the debate on the majority side, so that no 
 criticism can be expected from him. Attention was also caller] 
 to the fact that the minority party have participated in the 
 work of the committees and their views frequently accommo- 
 dated, so that the budget debates have become formal and per- 
 functory. 
 
 (4) The fact that no program is formulated until the Legis- 
 lature itself brings in the appropriation bill tends to 'destroy 
 publicity and opportunity for debate. Under present methods, 
 no citizen leams anything of the financial program until the 
 committee reports the appropriation bill, which is usually so 
 late in the session that no opportunity for effective suggestions 
 or criticism is afforded. It was stated, as a matter of fact, that 
 during the past twenty-one years, every appropriation bill 
 passed by the New York Legislature, except one, had been hur- 
 ried through in the final hours of the session, without the neces 
 sity even of being printed and lying on the desks of the mem 
 bers for three days. Under these conditions, it was. of course, 
 impossible for members of the Legislature themselves lo know 
 the exact financial conditions of the State. 
 
 After giving the above reasons why flic formulation of the 
 State budget is not a legislative function, the Committee ''ailed
 
 51 
 
 attention to some of the evils of the present system. The ( om- 
 mittee found that the present system of permitting the Gov- 
 ernor to veto items in appropriation bills prepared by the Legis- 
 lature had resulted in transferring to the Governor, to a large 
 extent, "the historic function of the Legislature of holding the 
 pure strings of the State/' and that the Legislature had passed 
 many appropriation bills with items which they believed to be 
 too large or improper, relying upon the Governor to prune them 
 down. The Committee also called attention to the fact thai 
 under present methods, the members of the Legislature are not 
 given adequate opportunity to ask questions in public concern- 
 ing the estimates of the men who know most about them. The 
 following reasons in support of the proposed amendment were 
 submitted by the Committee: 
 
 (1) The Committee were unanimous in their belief that the 
 department heads would exercise a greater sense of responsi- 
 bility when required to submit their estimates according to 
 their relative importance, since this duty of classification will 
 tend to make the head of each department better acquainted 
 with the needs of his various bureaus and subordinates. 
 
 (2) The Committee were unanimous in believing that the 
 departmental estimates should be revised by a central executive 
 authority before being transmitted to the Legislature. 
 
 (o ) A great majority of the Committee were of the opinion 
 that this ultimate responsibility of revising the estimates and 
 preparing the budget should rest upon the Governor. The rea 
 suns for this opinion were that the Constitution imposes the 
 duty upon the Governor of seeing that the laws are enforced 
 ;ind that the departments whose estimates comprise the greater 
 part of the budget are the instruments through which that duty 
 Is performed. The Governor is also the head of the State and 
 can best explain and defend a given fiscal policy to the people 
 of the Stale. 3ince he, above all others, in upholding before the 
 people a policy of economy should be held responsible to them 
 for the success or failure of such a policy. 
 
 ( 1 i The ( lommittee stated that no board composed of several 
 co-ordinate members could perform the function of preparing 
 a budget with equal efficiency, since the necessary authority 
 over subordinates weald be lacking. The Committee pointed 
 "in that the law of L913, creating a Board od Estimate for the 
 preparation of a budget, had proved a failure. This Board con 
 sisted of the Governor, Lieutenant-Governor, Presidenl of the 
 Senate, Speaker of the House, Chairmen of the Finance and 
 Ways and Mean- CommitteeSj Comptroller, Attorney General
 
 52 
 
 and Commissioner of Efficiency and Economy. This Board was 
 composed of four legislative and five executive members and 
 according to the Committee, violated the principle which re~ 
 quires that the function of opposing a budget should be sepa- 
 rated from the function of disposing of it. It was pointed out 
 that although this Board was given ample power for the prepa- 
 ration and revision of estimates, it at once became deadlocked 
 and was unable to agree. As a result of that failure, the Board 
 was soon abolished by statute and "its fate amply demonstrated 
 the error of confusing instead of defining responsibility". Tt 
 was suggested to the Committee that the Comptroller and At- 
 torney-General should share with the Governor the responsibil- 
 ity in preparing the budget. The Committee stated that the 
 Comptroller should be consulted in respect to the budget, but 
 should not be committed to it in advance, since his services 
 should be at the disposal of the Legislature in criticizing and 
 disposing of the budget. The Committee failed to see why the 
 Attorney-General should be a member of the Committee, since 
 he was not a financial officer and that imposing the duty on him 
 to help prepare the budget would be an interference with his 
 functions as chief law officer of the State and impose a useless 
 burden upon him. 
 
 (5) The provision for public hearings before the Governor 
 upon the estimates was for the purpose of securing publicity 
 and to minimize the danger of unfairness of allotment between 
 the different activities of the State. 
 
 (6) The Committee were of the opinion that the Governor's 
 power of revision should not extend over the estimates of the 
 legislative and judicial branches of the State, but that he should 
 have, of course, authority to make recommendations in respect 
 to them. 
 
 (7) The Committee fixed February 1st as the date for the 
 submission of the budget to the Legislature, on the ground that 
 it gave the Governor time for its preparation and yet allowed 
 ii to reach the Legislature in time for full discussion. 
 
 (8) The provision for the appearance of the Governor and 
 departmental heads before the Legislature was for the purpose 
 of receiving publicity and criticism on the part of the State 
 and particularly to bring out any unfair treatment of any de- 
 partment or bureau. 
 
 (9) The Committee were of the opinion that if power were 
 left in the Legislature to raise any item in the proposed budget, 
 it would leave the door open to an entire abandonment of the 
 budged system and would result in an immediate return to
 
 53 
 
 present methods. The Committee also thought that it would 
 tend to destroy all incentive on the part of the Governor to pre- 
 pare the budget in advance and present it with a sense of re- 
 sponsibility. In order to meet the objection, however, that the 
 Governor might misuse his power, either by starving objects 
 which the Legislature deems worthy or by trade with individ- 
 uals or localities, the Committee thought that the power of in- 
 itiation of financial legislation should be Left with the Legisla- 
 ture, subject to but two restrictions: first, such power not to 
 be exercised until after the budget is finally disposed of by 
 both branches of the Legislature; second, that such appropria- 
 tions must be made by a separate bill for each single work or 
 object. The Committee were of the opinion that this would 
 adequately protect the budget system and yet keep it free from 
 executive abuse. The Governor, of course, retains the right to 
 veto the, separate bills making appropriations, but these can In- 
 passed over his veto. 
 
 (10) The Committee were of the opinion that the present 
 provision, permitting appropriations to continue for two years, 
 should be changed so that all appropriations must expire three 
 months after the end of the fiscal year. This provision would 
 make all appropriations expire simultaneously and yet would 
 give time for the payment of any bills accruing late in the pre- 
 ceding fiscal vear. 
 
 The Committee answered the objection that the proposed 
 system would give undue power to the Governor, by saying that 
 it does not add one iota to his present power through the veto 
 of items in the appropriation bills. On the other hand, the 
 Commfttee pointed out that the power which the Governor now 
 exercises is not subject to> review, since the Legislature ad- 
 journs before the appropriation bills reach him, and that he is 
 thus in a position to use the veto power as an instrument of 
 reward or punishment, while the proposed system would de- 
 prive him of his veto as to budget items and would thus "com- 
 pel him to use his influence in advance, in open, under the fire 
 of legislative discussion and the scrutiny of the entire State. 
 It would thus be the Legislature which would have the final 
 word." The proposed system would, in the view of the Com 
 mittee, require the Governor to devise systematic and rational 
 methods of saving, since <ui him would squarely fall the re 
 sponsibility for extravagance and to him would 1m- given, as 
 never before, credit for wise economy. 
 
 The conclusions of the Committee were based largely upon 
 information produced at the hearings on the subject. For ex
 
 54: 
 
 ample, former President Taft gave very strong endorsement to 
 the idea of an executive budget, stating that he was convinced 
 that there was no hope of real economy in the Federal Govern- 
 ment until Congress gave the Executive power and the means 
 to prepare a full statement of expenditures for which he was 
 willing to become responsible. He stated that two of the Com- 
 mittees composed of the ablest men in Congress, one in the 
 House and one in the Senate, had recommended this system. 
 He emphasized the fact that many of the appropriations were 
 made by Congress, without real regard for the needs of the 
 government, since the members represent their congressional 
 districts and not the entire country. He said that the man 
 from the interior condemns the river and harbor bills, but 
 that this same man would approve an appropriation of $500,- 
 000 for a postomce in a town needing only a $100,000 post- 
 office, and that the reply of this man to criticism of appropria- 
 tions of this kind is, "Well, this government is a great govern- 
 ment and it needs a. dignified place for its offices' 1 . He pointed 
 out that if the government was to be shackled for fear that the 
 people might elect a bad Governor some time, the result would 
 be an ineffective government. 
 
 President Lowell, of Harvard University, gave informa- 
 tion in regard to the English budget system, recounting the fact 
 that since 1713 the House of Commons had, by a permanent 
 order, deprived itself of the power to increase any appropria- 
 tions recommended by the cabinet. President Lowell stated 
 that for two hundred years that rule had been followed and 
 that it had been very effective. He also stated that he re- 
 garded the budget as a public matter and not a collection of 
 private matters and that it was, therefore, wiser to have it origi- 
 nated by public officials and not by a lot of people who repre- 
 sent private and local interests. He criticised the present "log 
 rolling" methods of making appropriations and said that instead 
 of giving the individual member of the Legislature the right to 
 initiate and the Governor to yeto, it would be much better to 
 Im the Governor initiate and the Legislature veto, in so far as 
 appropriations are concerned. 
 
 Presidenl Goodnow, of the Johns Hopkins University, ap 
 peared before the Committee and endorsed the idea of an execu 
 live budget. President Goodnow also stated thai he had drafted 
 ;i provision for the Constitution of China, which prohibited the 
 legislative bodies there from passing any bill making an appro 
 priation until it had first been recommended by the President. 
 This provision also prohibited the legislative body from increas-
 
 00 
 
 ing the amount recommended by the President. He stated that 
 practically in every English-speaking country except the United 
 States, a rule of this sort had been adopted in order to prevent 
 the practice of "log rolling". He called attention to the fact 
 that the idea prevalent in this country, that the Legislature 
 should have the power to initiate and pass appropriations in 
 order to control the purse strings, is not in keeping with the old 
 idea as to control over the purse strings. He said that originally 
 the theory was to close the purse, not to open it, but that the 
 present system seemed to advocate the opening of the purse, 
 while leaving with the Governor the right to dose it. 
 
 Mr. Fitzgerald, Chairman of the Ways and Means Commit- 
 tee of the National House of Representatives, called the atten- 
 tion of the Committee to the fact that Article 1, Section 9 of 
 the Confederate Constitution, provided for the submission of 
 requests to the legislative body for the expenditures on account 
 of the Confederate Government, and that it required a two- 
 thirds vote of both Houses to appropriate any money, unless so 
 requested by the President. Mr. Fitzgerald criticized the pres- 
 ent methods of making appropriations by the National Con- 
 gress. He advocated the concentration of power and the con- 
 centration of responsibility, if effective results were to be ob- 
 tained. He was, therefore, in favor of having the budget pre- 
 pared by the Executive, but would not make it absolutely im- 
 possible for the legislative body to initiate appropriations, but 
 he would make it so difficult that it. would only be done under 
 the most peculiar and extraordinary circumstances. 
 
 The hearings before the Committee which were printed cov- 
 i rod about 175 pages and the limits of this article make it im- 
 possible to give anything like a summary of the testimony given, 
 but the above statements show that the Committee adopted the 
 suggestions which were given by those who appeared before 
 them. Furthermore, quite a number 1 of the hearings were nol 
 printed. 
 
 Mr. Robert Wagner, a member of the Finance Committee of 
 the Convention, filed a minority reporl againsl the proposed 
 budget system. Mr. Wagner has. for quite a while, hem the 
 Democratic leader in the State Senate and a member of the 
 
 Finance Committee of thai body. Ee disagr 1 with the mem 
 
 hers of the Committee, believing that all appropriations should 
 originate in the legislative branch of the govt rnment. He tools 
 the view that the term "executive budget" could nol properly 
 be applied to the British budget, since the cabinet there Is emu 
 posed of member of the legislative bodies and that it is really
 
 56 
 
 a "parliamentary" and not an "executive budget". He also 
 stated that the report of the Committee was inadequate and 
 inconsistent, maintaining that if publicity is desirable on mere 
 matters of administration, it was particularly desirable on spe- 
 cial appropriation bills. He thought that if the Governor were 
 to be prevented from making a political football of routine 
 appropriations, he should also be prevented from making a po- 
 litical football of special appropriation bills. He, therefore, 
 advocated the insertion of a provision requiring the members 
 of the Legislature to file copies of proposed special appropria- 
 tion bills with the Governor, the Comptroller, and the members 
 of the Legislature fifteen days prior to the assembling of the 
 Legislature. He would also have it a part of the duty of the 
 Governor to submit a budget on these special bills within fif- 
 teen days after the Legislature meets, together with his recom- 
 mendations on tliem. He took the position that this treatment 
 of special appropriation bills would abolish the evils complained 
 of by the majority report, namely, the rewarding of friends or 
 punishing of enemies by preference in case of special appro- 
 priation bills. He also thought that sworn statements should 
 accompany the requests made for appropriations to be submit- 
 ted to the Governor by the heads of departments and institu- 
 tions. As stated above, Mr. Wagner was really in favor of a 
 legislative budget instead of an executive budget. 
 
 The question of a State Budget was debated quite at length 
 in the Convention itself, but as these debates cover about 150 
 pages, it is impossible to give a summary in this article. The 
 sources consulted in the preparation of this article are the pro- 
 ceedings of the New York Constitutional Convention, the pro- 
 posed budgets in Wisconsin, Ohio, California and Indiana, and 
 the report of the Legislative Investigating Committee of Ala- 
 bama, all of which are on file in the Department of Legislative 
 Reference of Baltimore.
 
 PAMPHLET BINDER 
 
 ^^Z Syracuse, N. Y. 
 Stockton, Calif. 
 
 jAL LIBRARY FACILITY