both views, and have the good from both. However great may be our outstanding liabilities or charges for services performed within the closed year, though incurred on the authority of the budget, their exact cost ascertained and admitted, still, if the final bill containing the claim has not been actually paid before the last day of the official year (31st March), the money due by the State for the incurred liabilities cannot be defrayed out of these unexpended balances, nor out of any sums granted by Parliament for the service of the year to which these liabilities or charges belong. The payment for these liabilities must be deferred till the year following, and defrayed out of moneys appropriated for that new year's services, even if the budget of the new year has not provided for their payment; the money so expended being charged against the year in which paid, instead of, as in France, against the year in which the debt was incurred.

This practice of rigorously excluding the payment of moneys due for the year's charges or liabilities from being paid out of the available moneys granted for their liquidation, and throwing the one year's charges on the moneys provided for defraying the liabilities perhaps of a different kind in a year for which they were not incurred, and against a budget which did not anticipate or provide for the service, brings on another evil: it leads to large advances being made to, and by, principal accountants to a great number of sub-accountants, to enable them to anticipate claims for payment and to make advances for services to be performed. Now all experience proves that advances create laxity in applying for a final settlement of an account; there is abundant testimony on record to show how very objectionable the system of advances to an army of sub-accounts has been viewed by those financiers who have discussed this great blemish in our system. The theory is, that these unused advances are surrendered, as moneys not required for the settlement of services performed within the year, but practically this surrender does not and cannot take place; the unemployed money balances at the end of the year are retained for carrying on the service of the new year. I have never seen any statement of balances in the hands of sub-accountants, and that it is even difficult to make out the balances to the credit of the Paymaster-General.

All this complexity of receiving or crediting, and paying back, or re-crediting, is the result of having no fixed standard by which to regulate the settlement of claims for services actually rendered within the year. The only safe standard is that of paying for services performed; these involve liabilities just as much as the merchant's acceptance of a bill of exchange; both must be liquidated when due. In respect to the Government debts for rendered services, the sooner these are cleared off the better, delay does not

lessen the amount to be paid; on the contrary, delay only increases the difficulty of ascertaining the nature, extent, and cost of the claim, and the money being due generally on the service being rendered, the delay in payment induces a desire to add to the claim. XIII.-Advantages of Basing Accounts on Payments for Services

of the Year, instead of on Payments within the Year.

The French system of permitting services of the year to be paid for within a limited period after the year closes, necessarily provides for income and expenditure being kept distinct for each year, in order to strike a balance between the transactions of each year. The nature of this operation appears to require the separate transactions to remain open so long as there are any taxes due to the State, or money to be obtained by the parties who have performed services for the State; in fact, to remain always open, owing to the apparent difficulty of ever finally adjusting those outstandings. The insufficiency of the eight months' limitation for these accounts to be adjusted, necessarily causes some transactions to be in arrear; and the accounts of France do show recoveries of taxes and payments for services as appertaining to closed accounts of past years, but being clearly stated in subsequent years' accounts as due for previous years, no confusion or derangement in the accounting of France is ever caused thereby, and being small in amount, the efficiency of collectors of taxes and the defraying of debts is thereby fully established.

This system of separately accounting for each year's transactions, originated in the appointment of special treasurers, not purely Government servants, whose interest it was to retain funds in their own hands, therefore to delay as long as possible the final closing of each year's operations. This gave rise to great abuses, the recollection of which lasts to this day; but under the exact method of the French finance system, strictly enforced during the last few years, all persons handling public moneys being now Government servants, this mode of periodical accounting is conducted with marked success, and possesses so many advantages that it well deserves our attention. The accuracy of the budget of anticipated revenue is thereby possible to be verified by a comparison with the actual receipts, and though some of these may be obtained after closing the accounts of the year to which they belong, yet the amounts can be checked by the unrecovered balances of the year for which due. The pressing necessity which accurate accounting imposes for collecting the revenue, causes the actual recoveries for the year to be brought to such a close approximation with the estimated amounts as to allow of a judgment being formed as to the accuracy of the estimate and the diligence of the revenue collectors.

The expense budget is likewise checked by the actual payments, which, being also made over a limited period of time, after the close of the year in which the services were performed, ensures the cost or liability of these services being stated so nearly in full against the estimate of charge, as also in that case to verify the accuracy of the estimates. Here again the great principle of prompt payment of debts, which is a great economy to a Government, comes into full force.

The result is, that two distinct transactions, that of expected revenue and liability, can be contrasted in the French accounts with the actual amount of money receipts and money payments; securing not only a thorough test of the accuracy as well as promptness with which the finance business of the nation is conducted by the administrators, but a further gain, for in proportion as a scrutiny of this nature is strictly or loosely carried out, the administrative duties connected with the branches of the service to which these very different transactions belong, may be judged of as to whether due foresight has been exercised. Further, in proportion as the two distinct operations are successfully carried on within the period fixed for collecting the revenues, as estimated, and settling and paying the claims, as authorised by the budget, so may an opinion be formed as to how far the executive functionaries have been active in collecting the moneys due by the people, and in closing the claims due for the services rendered. In both cases, the tests will be beneficial. This double standard exists in the French accounts, whilst the English system of confining the accounting to show but one of the two-fold results exhibited in France, viz., that of money receipts and payments within the year, deprives the country of a standard by which to appreciate the results attained. But this concealment only exists so far as the published accounts are concerned.

Practically, a full account of each year's transactions must exist, though not published; we constantly hear of income tax, hop duties, &c., being due, though not collected within the year; and, again, we hear of an apparent increase or falling off in the amount of anticipated revenue of a current year, consequent on the actual collections being less or more than calculated in the budget, by reason of taxes remitted in the year previous appearing in the accounts of the following year, of which an account exists though not published. So with respect to expenditure; the money due by the State for services rendered in any one year must be paid at some time or other, and if not amongst the payments of the year in which the debts become due, they will be entered in another year's accounts when paid; and in this case also, an account of these arrears must exist, though not made public. The result is, that though some accounts are published in England, only those initiated into the

office secrets can say, if even they can do so with precision, what portion of the receipts are the revenues of the year, and what portion of the payments are in settlement of the expenses incurred for the liabilities or charges of the year.

The two national systems of making up the accounts in the one or single form from the year's actual money receipts and money payments, and in the double form according to the rights established within a fixed period of time, have been more fully discussed in France than in England, but their relative advantages and disadvantages have also in this country been considered. The opinions expressed in both countries as to the merits of the systems. will be found to vary with the stand point of view of the respective parties. In a Treasury point of view, from which in England the question has been settled, the cash receipts and cash payments within the year have been considered the true and only basis on which the national accounting ought to rest, though even these have not been the real data on which the accounts have been drawn out, owing, as before stated, to the use of Exchequer credits, which the law has ruled shall be treated as equal to money payments.

From an administrative point of view, the making up the accounts according to payments made for liabilities incurred for the service of the year will be preferred, but as the Treasury control in England has in past years always enforced on the administrative departments the accounting arrangements most suitable for the transactions of the Treasury, and as these depend on available cash means, the advantages which the administrators of departments will consider inherent in the complete settlement of each kind of service of the year, so as to aid them in controlling the expenditure as a whole, will be, as is the case, entirely disregarded, and the cash. issues entered in the accounts, in preference to the completed payments for the year's liabilities. Whereas, if the ledgers of departments of the State, especially of the army, were opened out to the public, it would be found that, under this system of cash entries, many services are, on the 31st March (the last day of the financial year), paid for in such fragmentary payments, and so irregularly, over a series of years, as to defy all exact knowledge being obtained of the actual expense for the year's services, and in consequence we have hitherto been deprived of that powerful and useful check which the classification of uniform and similar statistical facts for a series of years affords.

Now, there cannot be a doubt, that to know thoroughly what services are rendered to the country during any year, and what moneys ought to be paid for them, are two great essentials for an administrator. The services in general may be well known; but so numerous are the details connected therewith, that the most

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useful and concentrated means of check, viz., their cost, is not made up, and cannot be ascertained by our mode of accounting.

In the many excellent views and instructions in the reports of commissions, and in regulations which have at different times been issued in this country, and even stated in Acts of Parliament, there are many traces of the existence of the belief that a combination of the knowledge of the two transactions, services performed within the year and their full cost defrayed, cannot be withheld without serious injury to real economy, and to efficiency. Nay, more, when Mr. Anderson was called on by the Committee on Public Moneys to define in words the period over which the accounts of the army and navy extended, he replied that the "navy are allowed eight months. "for the preparation of their account; the army, commissariat, and "ordnance have been allowed twelve months, owing to the large "amount of the present expenditure which takes place abroad. "The principle upon which the account is prepared is, that it shall "embrace the whole of the expenditure for these services at home "and abroad within the period of the account. It is, therefore, necessary to allow time for the receipt of all those accounts from "the most distant stations, for the final examination and audit of "them after they are received, and for the preparation of the annual "balance-sheet for Parliament." And, in answer to other questions, Mr. Anderson replied that Parliament "could have two accounts, "the provisional account of the year, made up as closely as possible "to the termination of the year, and the finally appropriated account "after the whole of the transactions of the year have been com"pleted." A slight addition to the above words, would make our system identical with that of France, but the practical result shows a great difference, and seriously detrimental to our interests.

The French have succeeded in securing the check which we neglect, and with but little sacrifice as to time; for, whilst the duration or period within which the service must in France be rendered, is maintained to be the time included in the twelve months, and this rule is kept as the standard for regulating the payments, yet, the period for making the payments has been limited without inconvenience to the eight months immediately after the close of the year. The success of the arrangement is proved, in the fact that though arrears are subsequently paid, yet they are small, for after these eight months have expired, all power on the part of the ministers, administrators of departments, to pay away money for previous services, even though the amount is settled as actually performed, and the money claims actually due, ceases; the payment after this period must be specially approved of by the finance minister, before the departmental administrator can obtain the funds, Even then, the finance minister can only approve of such services