FINANCES. The finances of the United States are characterized by rapid increase in magni tude of fiscal operations, and by the great fa cility with which revenues are secured, resulting in a general tendency for revenue to outstrip expenditures. While the Federal Government possesses the constitutional right to levy both direct and indirect taxes, the requirement that the former shall be apportioned among the States in proportion to population, and the popular hos tility to direct taxation, have in effect practically confined the Federal Government to the field of indirect taxation. The principal sources of revenue are customs duties, which yielded in 1902, $254,444,703, and internal revenue (excise taxes) yielding $271,880,122. The principal sources of the internal revenue were: Spirits, $121,138,013; fermented liquors, $71,988,902; tobacco, $51,937,925. Receipts from the postal service amounting (1902) to $121,848,047 figure in the total revenues, which for 1902 were $684, The most important items of expenditure are pensions, the post office, the army, the navy, and interest on the public debt. In 1902 the
sum paid out in pensions was $1:i8.488.500; the cost of the postal service was $125,896,531 ; the total of expenditures made by the War Depart ment was $114.657,246; of the Navy Department $68,302,025. It must be remembered that part of the expenses of the War Department should not logically fall under that head, as, for exam ple, expenses for improvement of rivers and har bors. The total of expenditures for 1902 was $593,038,903.
The interest-bearing debt of the United States was $931,070,340 on July 1, 1902. The debt which bears no interest, including United States notes, ($346,681,000) and certificates against gold and silver deposited in the treasury, etc., amounted to $1,220,259,245. Only a relatively small part of the non-interest bearing debt is to be regarded as net debt, since far the greater part is covered by cash in the treasury.