INSTITUTIONAL EXPENDITURES IN THE STATE BUDGETS of IOWA FRANK I. HERRIOTT Reprint from Bulletin o/ Iowa State Institutions V\^’^ 'A > INSTITUTIONAL EXPENDITURES IN THE STATE BUDGETS OF IOWA. By Frank I. Herriolt, Ph. D. During the past twenty five years a constantly increasing amount of attention has been given both in political discussion and in schol- astic investigation to the problems of our public finance as they are exhibited in our local, state, and federal governments. But for the most i)art public interest has centered in the phenomena of either our national or our municipal governments ; and of late it has been con- cerned chiefiy with questions involved in the methods of raising the revenue wherewith to carry on the multitudinous activities, now- adays performed by or dependent on government. The state budgets of our several commonwealths have been almost ignored by publicists and scientific students of finance except in so far as the consideration of the problems of taxation have involved the states’ sources of in- come ; for the reason no doubt that the expense accounts of our fed- eral and local governments have become so enormous as to be oppres- sive and to arouse anxiety, and in consequence they have well-nigh absorbed public interest. In recent years, however, the mismanage- ment and waste of public revenue accompanied by more or less per- version of state funds and functions to private or political uses have aroused the citizen body of many of our states to marked interest in what has come to be by far the most important division of the ex- pense side of their state budgets, namely, the expenditures made for the maintenance of charitable, reformatory, penal and educational institutions now managed or supported by their state governments. At the beginning of the nineteenth century the outlays of modem governments for the care of defective and dependent classes were in- significant. There were practically no expenditures for education. The dominant political and social philosophy declared that both as a matter of ethics and of wise public policy the state should not expend public revenues for the care and education of individuals whom pri- vate individuals should care for and educate ; and the general prac- tice of states was in accord with this dictum. The only expenditures considered justifiable and imperative were those made for the incar- ceration of persons convicted of crime. Paupers, feeble-minded, and insane were kept, it is true, to a greater or less extent in public alms- houses but these classes were cared for not as wards to whom humane treatment and beneficent conditions should at least be guaranteed but for the most part as persons dangerous to the welfare of society, from whom if society was protected it mattered little what sort of a life or what the fate of those shut within the restraining walls of the in- stitutions. The doctrine of laissez faire, laissez passer thus conceived and narrowly construed led to frightful results. Men and women 2 were permitted to live in conditions, so miserable and degrading as nearly to pass belief in these days. Not only was the public conscience blunted, human sensibilities were brutalized. The menace to social welfare which the results of that individual- istic philosophy and practice so clearly exhibited forced itself on pub- lic attention and brought on reaction and reform. The tales of Dick- ens and Kingsley, the exposures of Shaf tsburyj and the philippics of Carlyle produced a revollition in English philosophy and politics which had its counterpart later in this country. Thence began the growth of the belief that it is not only advisable but necessary that society secure by positive preventive measures as well as by negative restrictive measures protection from the deteriorating forces of ignor- ance, disease and degeneracy. Public opinion soon demanded that the states should provide equal opportunities for the education of all classes from the primary grades to the university and should guaran- tee decent conditions and humane treatment and enforce a reform- ative regimen for all those confined within its institutions. The effect of this change in social philosophy in the middle decades of the last century became apparent very soon in the budgets of our states. The expenditures authorized for the establishment and support of educational, charitable, penal and reformatory institutions augmented rapidly until now they constitute the most noteworthy part of the ex- pense accounts of the states of the American commonwealth. It is with the growth of the expenditures for our various state in- stitutions in Iowa and their relation to the general budget of the state that I wish to deal. Organized as a territory in 1838 and ad- mitted as a state in 1846, Iowa’s history is contemporaneous with the humanitiarian movement in the financial operations of modern states and we can trace the pressure of tlie altruistic philosophv of our day on the public purse in this state under unusually normal circumstances. Our population has been of such a character from the beginning as to make our political discussion and legislation very conservative. So- cialism has never received serious support from any considerable body of the inhabitants. Extravagance in expenditures has at no time characterized the state’s financial history. Indeed compared with many of her sister states Iowa’s expenditures in many respects have been parsimonious. Nevertheless the past fifty years have seen a remarkable increase in the state’s outlay for institutions— from less than 10 per cent of the budget of the biennium of 1846-48 to 77 per cent of the biennial budget of 1899-1901 in which the expenditure ag- gregated $4,578,648.74. Since 1867 the state of Iowa has disbursed more than 50 per cent, of its income for institutions. In presenting the subject I shall first deal with the development of the institutional accounts as they appear in the specific legislative appropriations and in the disbursements of the Treasury. The var- ious sources from which revenue is obtained and the manner of raising the same to meet the appropriations will next receive attention. The methods pursued by the General Assembly in making the appropria- tions in the biennial budget will then be considered. The conclud- 3 ing division of our study will be concerned with the various methods adapted by the legislature respecting the supervision and control of the expenditures authorized for the maintenance of the several in- stitutions. Institutional appropriations as I shall here use the term relate to and comprehend all appropriations regularly made by the General As- sembly for an object or work in and of itself of a permanent char- acter; which, however, is exclusive of and not incidental to the work of the judicial or executive or legislative branches of the state govern- ment. This definition extends the scope of our inquiry beyond the limits of the popular conception of “ institutions. ’ ’ Thus there will be considered appropriations for our State Library and State Historical Society as well as those made for Insane Hospitals or for the State University. For convenience I shall take the classifications of institutional accounts adopted in the State Treasurer’s Report for 1897 (See p 26. See also Tables 222 and 224 of Report for 1899) al- though it may be contended with reason that the inclusion of the “Militia” therein is going somewhat beyond our definition. In that classification thirty Institutions appear. Under “Educa- tional” are included the State University, the State Normal School, the Teachers’ Institutes, and the Iowa State College of Agriculture and Mechanic Arts, and the Board of Educational Examiners. In the following pages there will' be included under the “Charitable” Insti- tutions the four Insane hospitals at Mt. Pleasant, Independence, Cla- rinda and Cherokee, the Orphan’s Home at Davenport, the Soldiers’ Home at Marshalltown, the College for the Blind at Vinton, the In- dustrial Home for the Blind at Knoxville, the Prisoners’ Aid Associ- ation, the Benedict Home at Des Moines, the School for the Deaf and Dumb at Council Bluffs, and the Institution for Feeble Minded Children at Glenwood. Under “Reformatory” are classed the two Industrial schools, the one for Boys at Eldora, and the one for Girls at Mitchellville ; and under “Penal” the Penitentiaries at Ft. Madison and Anamosa. Ten Institutions are grouped under the head of “Mis- cellaneous, ” Farmers’ Institutes, the State Agricultural Society and its branches, the National Guards, the Weather and Crop Service, the Geological Survey, the State Library, the State Historical Society, the State Historical Collection (henceforth under the State Library), and the State Horticultural Society. Since 1898 all the Penal, Re- forniatory and Charitable institutions, with the exception of the Ben- edict Home and the Prisoners’ Aid Association, have been under the Board of Control of Iowa Institutions. I. THE GROWTH OF INSTITUTIONAL ACCOUNTS IN THE STATE BUDGETS. The first appropriation for an institution in Iowa was made in the Act of Congress, approved June 12, 1838, giving Iowa a territorial government. The Act sets apart the sum of |5,000 for “the purchase of a library, to be kept at the seat of government” (Sec 18). The first territorial legislature at its session in 1838-39 provided for the 4 organization of a Militia the expense of which was to be sustained by the Territorial treasury (See \ct approved January 4, 1839, Sec. 15). — the amount being contingent on the actual organization and the members enlisted. The first specific appropriation to be made for an institution in the general meaning of the term was that authorized for the erection of a penitentiary at Fort Madison. Various incidents connected therewith are interesting as illustrative of the happy-go-lucky fashion that prevailed among our early law-makers in the use of pub- lic funds. Governor Robert Lucas, Iowa’s first governor, in his first message to the legislature in 1838 urged that body to memorialize Congress for an appropration with which to establish a penetentiary. (See message H.J. 1838-39 p 11-13). In the Organic law creating the territory Congress had given |20,000 for public buildings “at the seat of government” (Sec. 13) and later had appropriated $30,000 for “erect- ing public buildings in the territory of Iowa” (See Act of July 7,1838, Sec. 6). The legislature, however, ignored the governor’s sug- gestion and forthwith authorized the erection of a peniten- tiary on a scale not to exceed in cost $40,000. (See Laws 1838-39 p. 389. ) With an excess of virtue that is naive the act expressly forbids the prospective Superintendent of the prison to “interfere” with the appropriation for “public buildings” just noted. For some unac- countable reason Gov. Lucas, who did yeoman service in blocking measures exceeding the powers of the territorial legislature, failed to veto this act which authorized an outlay of double ^the amount granted by Congress. With like assurance the Board of Directors adopted plans that required $55,000 to complete and in 1843 we find the national House of Representatives considering a memorial from Iowa praying Congress to make good a deficiency of $15,000. (Report of Committee 37 Congress 3nd Ses. , Vol. IV. No. 793.) The practice among the territories of anticipating the donations of Congress evidently became a serious evil for we find it expressly prohibited in the Omnibus appropriation Act in 1843 (See Act of May 18, 1843 Sec. 117. ) I am not able to give the amounts annually expended during the ter- ritorial days for the three institutions mentioned. The financial re- ports of the territorial oflicers were meager and are confusing. Further, the bulk of the territorial expenses was not a direct burden on the people of the territory of Iowa, but was borne by the national government. The terrritory did levy a territorial tax the proceeds of which were used in meeting various necessities; but this fact makes it still more difficult to determine the cost of the institutions. No expenditures appear to have been made for the state library except the annual salary of $310 allowed the librarian. Up to January 17, , 1843, $38,638 was spent for the Penitentiary. In 1845 a legislative committee reported that between forty -four and forty-five thousand dollars had been paid out for buildings; but the money seems to have been nearly wasted as the committee observes that “any prisoner of common cunning that could not get out (escape) ought to be whipped out” (Journ. of Council 1845 p 51). 5 In presenting institutional appropriations after the admission of Iowa to statehood when the whole cost fell immediately ujion the tax paying citizens of the state, several matters should be kept in mind. During the first seven or eight fiscal periods we continue to exper- ience more or less difficulty in getting at the real expense of the institutions. The specific legislative appropriations can be more easily traced than in the territorial days but the reports of the state’s financial officers do not always enable us to determine the actual dis- bursements from the Treasury pursuant to the appropriations. Thus the Auditor and Treasurer of State in their reports were accustomed to bunch under some one head as “miscellaneous” sundry accounts among which may be included various disbursements for institutions which prevents separation and classification of accounts. We en- counter another difficulty in the date of termination of the fiscal periods which varies more or less and still another in the fact that the periods covered by the reports of heads of institutions do not al- ways coincide with the former, thus not enabling us to check the one by the other. Another fact of importance, especially in the growth of the budget and legislative control, is the custom which has become fixed in the practice of the legislature of making continu- ous or “standing” appropriations. In the earlier periods each and every expenditure of the state was specifically provided for at each regular legislative session either by separate appropriation act or by specific mention in a section or clause of the Omnibus appropriation. In the later periods the legislature got into the habit of making standing appropriations that continued in force from period to period without re-enactment at each session, as in the Code provisions for the per capita allowances to certain institutions for support. Appropria- tions have come to be known as ordinary or “standing” and “extra- ordinary.” The latter are of course, the separate or additional amounts appropriated at each biennial session for new or particular purposes. Finally an appropriation may be definite or contingent as to amount. It is contingent when the amount payable depends upon certain events or conditions, as upon the number of inmates in an . institution. In what follows relative to legislative appropriations I shall deal only with the definite appropriations that specify the ex- act amount to be expended. The entire or exact cost of the institu- tions for biennial fiscal periods will be exhibited by the aggregate sums disbursed from the treasury as shown by Auditor’s warrants drawn on the Treasury to meet the appropriations. A. GROWTH OF EXTRAORDINARY APPROPRIATIONS. The first General Assembly appropriated for only two institutions. For the State Library 1150.00 was authorized to be expended and a bond issue of $20,000 was ordered to obtain funds for the peniten- tiary to make it ‘ ‘ efficient. ’ ’ In 1849 the legislature authorized the issue of $6,000 more in bonds to complete the buildings at Fort Mad- ison. Provision was also made for three normal schools, at Andrews, Oskaloosa and Mt. Pleasant, $500.00 for each per annum being appro- 6 priated out of the state University fund — which consisted of the pro- ceeds of the sales of lands given the state for founding such an insti- tution. The third Assembly in 1851 made the first appropriation ($500) for the purchase of hooks for the Library and appropriated $11,000 for the penitentiary. It also took the first step toward the establishment of an Insane Hospital ; as it directed that the ‘ ‘ Saline lands” given the state by the national government should be sold and the money received should be used as a “fund” for founding and supporting a “Lunatic Asylum.” Out of the proceeds there was also set apart $5,000, the same to be used by the Superintendent of Public Instruction for the college of Physicians and Surgeons at Keokuk. The fourth General Assembly in 1853 was the first to feel the pres- sure of the humanitarian movement that had for its object the pro- vision of suitable care for the unfortunate defectives of society. An Act was passed directing the establishment of an Asylum for the Blind at Iowa City appropriating for the support of the inmates $35.00 per quarter and $2,000 for general and contingent expenses. Governor Stephen Hempstead and James W. Grimes strongly urged the erection by the state of an Asylum for the Insane and the Legislature in 1854 in response made an appronriation of $60,000. — (Laws 4 G.A. ch 134. ) The commission appointed by the Assembly to supervise its construction under the chairmanship of Gov. Grimes after extended investigation deliberately went beyond the appropriation and procured plans for an institution costing at least $200,000 and appealed to the legislature to sustain their action both on the grounds of economy and of humanity. (Report of Insane Commissioners App. H. Journ. 1856 pp 236-239. ) Their recommendations were concurred in by the Assembly which appropriated $50,000, $40, 000, $105, 000 and $75,000 in the next four sessions to construct the Asylum in accordance with the most improved plans of the time. Besides making provisions for the insane the fourth Assembly at its first session appropriated $10,000 for an institution for the Deaf and Dumb. Prior to that time the state had begun making provision for the education of the Deaf, Dumb and Blind. In 1849 $50.00 per annum was appropriated for each person certified to the Superintendent of Public Instruction ; by the Code of 1851 the amount was increased to $100. The amount was expended by the parent or guardian of the person entitled thereto. The first act also apnropriated $500 for the education of the deaf and dumb and $250 for the blind. It is not clear from the act whether the latter were in addition to, or the limit of the allowance for such persons. Besides the appropriations already noted the fourth General Assembly made provision of $5,000 for the Geological Sur- vey and of $2,000 for the State Agricultural Society. At the session of 1856-57 there was appropriated for the Blind Asylum $3,500, and a per capita allowance of $25 per quarter for each pupil. The state Historical Society received assistance to the extent of $600 for the biennium and thenceforward became a beneficiarv of the Treasury. The Normal Schools at Andrew and Oskaloosa again 7 received appropriations, this time of |1,000 each, instead of |600 as in 1849. The appropriations for institutions were materially increased at the session of 1858, the first Assembly convened under the new state constitution. Three new ones appear in the list. Teachers Institutes became a state charge, the sum of 1100 being allotted for each county organizing an institute. (7 G. A. ch 52, sec 56. ) The Agricultural col- lege was inaugurated with an appropriation of $13,000. The State University appears formally for the first time. It had had an inchoate existence since 1846 but for various reasons it had not be- come a Working institution until 1855. The appropriation of $5,000 taken from the Saline land sales for the College of Physicians and Surgeons at Keokuk already referred to may be said to have been the first state appropriation for the University as the institution at Keo- kuk was brought within the University’s jurisdiction. As a matter of fact the expenditures for the old state capitol at Iowa City were in effect appropriations for the University as it was turned over to the Trustees for its use when the capital was removed to Des Moines in 1858. The first specific appropriation for the University made by the seventh Assembly amounted to $13,000. From 1858 to 1868 the grand total of the extraordinary appropri- ations for institutions fell off although in some cases the amounts ap- propriated were increased: (See Table I). There were no new in- stitutions created during that time or given aid. The appropriation for the Insane Asylum at Mt. Pleasant decreased from $105,000 in 1858 to $10,000 in 1862 and $12,000 in 1864. In 1866 the Argicultural College at Ames was given $91,000. In 1868, however, several new institutions were created and appropriations therefor appeared in the budget. The Insane Hospital at Independence was inaugurated with an appropriation of $125,000; the Industrial School for Boys at Eldora received $15,000; the school for the Deaf and Dumb, transferred to Council Bluffs, was given $127,000, for buildings ; the Horticultural Society received its first appropriation, $1,600; and the Orphans Home at Davenport became a state institution and received $52,000. From that time up to the present legislative appropriations contin- ue to grow in numbers. In 1874 the construction of a new Peniten- tiary at Anamosa was authorized, the amount appropriated at first be- ing $24,500. At the sesison of 1876 an institution for Feeble Minded Children and the Normal School at Cedar Falls were established. The next institution to be founded was the Insane Hospital at Clarinda in 1884; and ten years later the legislature authorized the establishment of the fourth Hospital for the Insane at Cherokee. In the latter in- stance the Assembly made an appropriation of $50,000 per annum for four years. In 1896 the legislature made another appropriation for a period of years for the State University appropriating the proceeds of a special tax levy of one tenth of a mill on the taxable property in the counties, the amount, however, not to exceed $55,000 per annum, and the appropriation or levy to continue for five years. In 1898 the levy was extended one year and in 1900 the levy was authorized 8 for another five years. The Agricultural College in 1900 was also given a similar appropriation for five years. Unlike some of the eastern states Iowa has given but little finan- cial assistance to institutions founded and managed solely by pri- vate parties even though their objects be general or public in char- acter. This policy is the result in great part no doubt of a reaction from the excessive use of local credit in assisting railroad construc- tion in the early history of the state. Be this as it may the finances of the state have been remarkably free from the perplexing problems which state aid to private eleemosynary and educational institutions has engendered in the older eastern states. Some aid however has been given institutions managed entirely by private parties usually acting together as corporate bodies. Thus the Horticultural and Argicultural Societies and Fair Associations fall within this class. In 1884 the legislature appropriated |5,000 for the Benedict Home for fallen women located at Des Moines and |2,000 for the Prisoners Aid Association. The latter appropriation however was discontinued after a few years. All of the extraordinary appropriations which have just been briefly sketched are given in detail for each legislative session or period in Table I to which the reader is referred for particulars. For purposes of comparison the appropriations have been classified and summarized under four heads, Educational, Charitable, Penal, and Miscellaneous in Table II. In the latter are included columns showing not only the total institutional appropriations but also the grand total of all extraordinary appropriations made by the General Assemblies and the proportions of the former to the latter. The appropriations made at extra sessions are not separated but included within those of the first session of an Assembly. It should be con- stantly kept in mind that the amounts set out in Tables I and II represent merely the’ extraordinary appropriations for Iowa’s insti- tutions and not the total cost. They show the sums specially appro- priated at the several legislative sessions. The bulk of the appropri- ations, in particular of those for the institutions under the Board of Control was made for buildings, repairs and improvements. The per capita allowances for support are contingent and in the main are regular standing appropriations ; they are not given in the tables. The total exact cost of the institutions as shown by warrants drawn on the State Treasurer is exhibited later in Tables III and IV. Some facts relative to the appropriations may be pointed out before passing on to the actual cost for institutions as shown by the warrants drawn on the state treasury. The largest single appropriation made for an institution was $360,000 for the Insane Hospital at Cherokee in 1900-01. The smallest total of institutional appropriations was in 1848-49 and amounted to only $1,900. The largest total occurs in the budget of 1900-01, it reaches $1,117,419. The totals for educational institutions as exhib- ited in Table II shows increases that start from $1,600 in 1848-49 up to $297,000 exclusive of the special tax levies for the University and TABLE I-SPEOIPIO EXTRAORDINARY APPROPRIATIONS MADE BY THE GENERAL ASSEMBLY OF IOWA FOR THE STATE INSTITUTIONS, 1846-1901. Ednoational— State University State Normal Soliool TeaoherH’ Institutes Agrionltural OoIloKe Ohari table — Hospital at Mt. Pleasant Hospital at liulopondenoe Hospital at Olarinda Hosintal at Oherokee Orplians’ Homo Soldiers’ Home OolloKo for Blind Industrial Home for Blind Beuodiot Home Prisoners’ Aid Association Soliool for Deaf and Dumb. . , Institution for Feeble Minded. Reformatory — Industrial School— Girls Industrial School — Boys Penal— Anamosa Penitentiary Ft. Madison Pouitentiary Misoellauoous — Anrioultural Society National Guards Fish Oomniission Weather Service GooloRioal Survey State Library State Historical Society State Historical Oollootiou . . . State Horticultural Society Total 3(1460 I 1848 2d GA 1860 3cl GA 1852 4th GA 1864 6th GA 1866 6 th GA 1858 1 1860 1 1862 I 1864 7th GA 8th GAigth GA lOthGA 1 1 1 1866 nth GA 1868 12th GA 1870 13th GA 1872 14th GA 1874 16th GA 1876 16th GA 1878 17th GA 1880 18th GA 1882 19th GA 1884 20th GA 1886 1888 2l8t GA 22d GA 1 1890 33d GA 1893 34th GA 1894 26th GA 1896 36th GA 1898 j27thGA 1900 28 GA $ $13000 $5000 $ $20000 $21000 $20000 $26000 $62300 $46000 $47467 $60000 $ .. $60000 $64600 163000 162000 1126000 $78000 $66000 $31000 $11000 $10000 1600 2000 3000 14600 13600 17700 49600 27800 26200 39300 17600 23700 60000 48000 14000 170000 13000 20000 91000 47760 68600 38600 34000 24820 8973 13000 23000 32100 6300 7000 60000 63600 49000 64600 6000 117000 100000 40000 106300 76000 10000 12000 27160 28460 36600 21900 8760 30100 19800 17000 16700 142000 106000 66000 87100 20600 24000 49100 10600 76600 126000 166000 200000 96900 104000 60000 36300 81260 66880 6(>000 28760 20000 16760 60000 19300 14876 19300 160000 103000 102000 180400 66100 137038 199300 34806 23300 212000 112140 100000 360000 62000 26000 19700 8200 4360 6426 26000 16200 67200 8960 31836 46000 13000 14600 18800 6800 44600 60000 100000 12260 38260 16632 llj876 618 lO lOUOO 31000 2000 3600 16000 10000 13000 6000 11000 eoioo 27016 73600 46000 12000 2600 3000 12800 10200 10200 17034 8000 7t)00 6100 l<>5(j0 7000 6500 2000 40UO0 30300 22100 18000 19000 2246 6000 2000 4000 6000 8000 9000 9200 6000 lOOOO 2000 1600 10000 14000 9000 14500 3000 127000 47000 16000 16000 60000 44418 61896 17000 60100 4460 17800 26(169 16000 14100 17100 9600 6000 6200 14100 14216 61000 69300 31200 44000 416)0 266(10 49860 178700 9000 64534 21600 6800 24938 10360 17260 18136 7160 6000 17000 3900 21760 16000 ■ 16000 30000 26000 48166 2600 16962 4050 24190 9000 21860 2U8U0 26900 6060 18600 4800 37960 24693 22600 63024 43066 64600 76100 31400 23400 38860 19300 37666 66903 42826 69240 6000 11000 6606 20000 46180 101790 13116 28082 40000 20719 9600 7300 31800 18860 36060 16190 13076 10700 10600 9700 16960 9600 64300 7700 14400 2000 4000 4000 60000 30000 7000 6000 3000 8760 6000 6000 6000 6600 2000 3000 9000 16000 3000 6000 6000 10000 6000 18000 18666 400 926 400 3000 6000 6000 1700 1000 6000 6000 3000 600 1000 6000 1000 4000 1000 3000 26000 30000 26000 1600 2000 2600 7900 11936 1 8606 1 117000 94400 1 208480 1 3U7290 1 69116 1 68083 140160 626900 1 449726 463600 312743 387642 296189 299377 402990 1 937483 679260 487671 729476 1 429183 769870 1 1006042 369866 1117419 NOTE — The Appropriations in 1848, 1866 and 1868 opposite State Normal were for the Normal Schools at Andrews, Mt. Pleasant and Oskaloosa. N. B.— Continuous or "Standing” approiiriations for support and speoial tax levies are not included above. 9 the Agricultural College which are ccntingent with a maximum lim- it. The appropriations for the charitable institutions have increased from $2,000 in 1852-53 to $683,940 in 1896-97 ; those for the penal and reformatory institutions have mounted up from $20,000 in 1846-47 to $166,602 in 1896*97. The major portion of these appropriations was authorized for buildings, repairs and improvements. One of the most interesting showings in Table II is to be found in the columns under the heading “Proportions” in which are given the per centages or proportions of the appropriations for state institu- tions of the grand total of appropriations for all purposes whatsoever and the proportion made for the other or general expenses of the state government. In the first legislative per- iod — 1846-47 — the appropriations for institutions constituted 57. 1 per cent of the entire amount appropriated. In the next period however, they amounted to 12.4 per cent. Since then while there have been marked fluctuations, the appropriations for institutions have taken the lion’s share in the biennial budgets. The pro- portion in 1894-95 was 94. 1 per cent. In other words there was appro- priated for the general state expenses only 5.9 per cent of the grand total of extraordinary appropriations in that period. In actual figures the amounts were $769,870 for the institutions and $58,595 for all other purposes. The significance of such figures is very great. They tell us with emphasis the trend of social and political thought. 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GOCD-3004i>.4:^OtOO(OxOOi-‘CDGOOOOtOO(OX CD(OxtOOtOOXh-^OCOO-3CDtOCOO‘OxOOtO(OlOOOOOS(OxOO I I 1 1 xo^ CO -3 4i^ 45^ CO 1-^ »3 to to CO 1-^ -3 O O4^OCDH-^CD(0l00C0C7Xl-‘C0C0t0C04i-0x05(0X (OXt0-3CO»-^OSO5-3t0l-‘ (0(CD4(^ i I I -I to (OX I CO H-- (OX to t5 CD CD CD 00 -3 00 (Ox 45^ 1 -^ (OX OS OS i 0 CDO 000 S 00 i 0 x 0 S 4 i^CDC 04 s^- 3 ( 0 x 0 x- 3004 i>^t 0 l-^ 0 SC 0 t 0 K-^ m 4s^tOCDtOOCD-3COh-iOOCDOO(Ox4^CD(OxOCD(OX(OS(-"OStO(OxtO-3(OxCO (0x0SC0G0C0t04^(0X(0xC0-3(0xOI-‘00C04- 3H^05CD(0xt0l-^OO(0X(0x i-^ 4 i.CS 4 s-C 04 i^ 00 O 4 S^ 4 ^( 0 xi-^- 3 - 4 ^CD 05 i--i-‘ 4 i- 4 ^t 0 00 -3 00 OC 0 C 0-3 -^3>P^G005t0t0H-C0(0XCDOt04i^(0x00CD00O(05(-*C00000t0t0C000C0 t0-3C0(0X-3l-^i0xC0CD(0xCD4i--30S4^4^0S0SH^-3 -3 00 05OOt04;^4i^ I II I I I „ CO CO I to I (Ox4^-30O(Ox00CDh-O; I OS I 05CD(0X^O50S4^(0 x 9 ^ P 2 «3 00 to to CD CO OS -3 CO OS CO (Ox 4^ CO 3 OS( 0 S 4 ^(OxtO(Ox 00 (G 04 ^ O(-‘0Si0X(G0 00(0x00 C0CD4i>-CD(G0t0t0O4:^H^C04i>-0S4^-30S-3C0-3t0 COt04i^CDCDCOtOOOOOl 4i-»-"tO0SCD HQ X a> CD(GO(GOOO(GOOO(GOGOOOOOGOOOOOOOOOGOOOOOOOOOOOOOOOOOOO(X(XOO OCDCDCDCDCDOOOOQOOOOO-3-3-3^-30SOSOSOS(OS(OxOXOXOXOx4^4x O 000 S 45 ^t 0 O(G 00 S 4 ^t 0 O(G 0 054 ^t 0 O 00 (JS 4 ^t 0 OG 00 S>^t 5 O 000 S I I I I I ( I I I I I I I I I I I I I I I I I I I I I I OCDCDCDCDCD00 00(X(G0 00 -3 -3 “3-3-30S050S050S(0x(0x(0x(0x(0x4^4i^ h-CO-30^CO»-*CO«3(OX(Wl-*CO-'3(OlCOK--CD-3(OXCOh- CD-3(OXCOi-‘CD-3 d d hO S 52 ! o H o 00 CO 4^ OS ^ CD 2 O d ' H ffl Q d 5^ d H O H d TABLE II 11 B. GROWTH OF EXPENDITURES We have so far considered simply the growth of the specific extraord- inary appropriations for institutions in Iowa ; but these represent only the legislative enactments passed at the biennial sessions of the Gener- al Assembly which authorize disbursements of money from the state treasury. They do not include the continuous, or standing appropria- tions for support and current expenses nor any of the contingent ap- propriations for the institutions. Further the entire amount of an appropriation may not be expended. To determine therefore the ac- tual cost of maintaining the institutions and the exact burden sus- tained by the taxpayers we must go to the reports of the state’s financial officers. We have now to turn from the legislative grants to the ordinary or current operations of the treasury resulting in the fulfillment of the statutory provisions for the institutions of the state. The growth of the outlays for its educational, charitable, penal, reformatory and various other institutions in Iowa from 1846 to June 8, 1901 is a shown in detail in Table III. With the exception of those for 1867 the amounts given are for biennial fiscal periods which up to 1881 ended on or about October 31. Since l!‘83 June 30 has been the date of termination of the fiscal biennium. During the first ten per- iods it is not possible to make an accurate exhibit of institutional ex- penditures owing to the inadequate showings of the financial reports. The table is reproduced with some modification from Table No. 224 in the Report of the Treasurer of State for 1897-99 for which it was prepared under the direction of the present writer. In general the outlays show a steady increase. For the education- al institutions we have the amounts increasing from $21,116 for the the State University in 1863-65 to $384,359 in 1899-1901; the expendi- tures for the Teachers Institutes have not increased much — in 1873 76, their cost was $10,250 and in 1899-1901, it was $1^',1' 0 ; for the State Normal School the amounts have gone up from $10,600 in 1875-77 to $167,606 in 1899-1901 ; and for the Agricultural College the expenditures have mounted up from $9,452 in 1857-59 to $161,014 in the period of 1899-1901. The class of institutions which has absorbed the bulk of the rev- enues expended for such purposes in Iowa is the charitable and of these the Hospitals for the Insane have taken much the larger share. The cost of maintaining the Hospital at Mt. Pleasant has fluctuated, increasing from $27,070 in 1854-56 to $107,880 in 1857-58, then decreas- ing to $77,729 in 1861-63, then gradually mounting up for eight years when it reached $234,218. During the next ten years the expenditures declined with tPe exception of one period. Since 1883-85 the outlay for the Hospital at Mt. Pleasant has exceeded $300, OuO except in 1897-99 when it fell to $279,524, The initial expenditures in 1867-69 for the Insane Hospital at Independence aggregated $229,315. Between that period and 1883 the average amount expended per period was somewhat less; but since 1883-85 with the exception of two periods the expendi- tures for Independence have been over $300,000 each period. For the 12 Hospital at Clarinda the expenses increased from $81,876 in 1888-86 to $316,074 in 1891-98. In 1895-97 they amounted to $431,711, — the largest amount ever disbursed in a fiscal period by the state for any one insti- tution. For the last period 1899-1901 the outlay was only $286,181. The Hospital at Cherokee now in the process of construction received $137,603 in 1895-97 and $263,541 in 1897-99. On account of various de- lays the Hospital has not been completed and the expense during the last period was only $32,556. The expenditures for the Blind and the Deaf and Dumb began as early as 1848-50 but prior to 1855-56 the Auditor of State issued his warrants on these accounts to private parties who expended the amount allowed for the unfortunates. The largest amount expended for the College for the Blind was $119,122 in 1871-73. Since, the bien- nial average has been about $65,000 for that institution. In 1887-89 the Industrial School for the Blind at Knoxville appears in the Institutional accounts, the outlay that period was only $768, but in 1891-93 $51,839 was expended for it. Thereafter the outlays were 50 per cent. less. In 1900 the legislature voted to close the institution because of the small attendance. The outlays for the school for the Deaf and Dumb have been larger than for the Blind. Prior to 1867 they did not exceed $25,000. From 1867 to 1881 the average was about $90,000 per period. The largest amount expended for the school was $187,232 in 1883-1885. For 1899-1901 the disbursements from the State Treasury amounted to $106,827. The Institution for the Feeble Minded at Glenwood has come to be one of the largest institutions of the state the expenditures for which nearly equal those for any one of the large Insane Hospitals. Beginning in 1875-77 with $12,293 its cost steadily increased up to $163,059 in 1883-5 ; then for two periods decreasing, then increasing to $329,393 in 1895-97. During the last two years ending June 30 $310,390 were expended for the institution at Glenwood, a greater amount than was expended for the Hospital at Clarinda in the same period. Expenditures for the Soldiers’ Orphans’ Home at Davenport ap- pear first in the period of 1865-67. The amount s^ient was $104,360. The maximum amount $228,380 was expended in 1869-71. From 1875 to 1889 the state paid out less than $100,000 per period for the maintenance of the Home. Since 1884 its cost has exceeded that amount, reaching $155,320 in 1899-1901. Since the period of 1885-7 when it was founded the Soldiers Home at Marshalltown has cost more than $100,000 for each period and in 1895-97 and in 1899-1901 it e.xceeded $200,000. Because some of the appropriations for the Industrial School for Girls at Mitchellville were not made separate from those for the Boys School at Eldora in the earlier history of the former the expenditures for the Reformatory institutions can not be given sej).:irately for most of the fiscal periods and the amounts in Table III are the total outlays for both. Up to 1883 their cost was less than $100,000. The TABLE III— EXPENDITURES FOR INSTITUTIONS, BY THE STATE OP IOWA, AS SHOWN BY AUDITOR’S WARRANTS DRAWN ON THE STATE TREASURY— 1846-1901. Institutions 1846-48 1848-60 1860-62 1862-64 1864-66 1867 1867-69 1869-61 1861-63 1863-66 1866-67 1867-69 1869-71 1871-73 1873-76 1876-77 1 1877-79 1879-81 1881-83 1883-86 1886-87 1887-89 1889-91 1891-93 1893-96 1896-97 1897-99 1899-01 I 1 1 $ S $ $ $ 1 $ 121116 $22062 110019 137071 $65866 $41744 $37360 $64993 $41622 $86799 $114791 $101270 186933 1161837 1161304 1159168 $167949 ' $234486 $384359 10600 12611 18962 48766 24690 29366 43637 89689 61886 71287 100147 9900 89085 167606 1799 3400 4860 6260 6060 6660 8600 8160 10260 9960 9860 9900 6660 9700 10460 9360 10660 10900 8650 10800 10100 9462 7566 6142 23848 83932 63923 72989 44633 31070 26733 6831 16690 18878 46968 22927 17403 89458 80948 88771 90636 04732 161014 237 273 242 147 297 297 111 384 297 633 1306 616 236 1083 847 964 1063 1661 2368 Ohari table— 27070 100338 107880 82376 77729 113062 128971 183696 234218 227328 218163 264666 218467 184046 184167 322908 311844 816943 307731 813658 802660 382523 270624 338774 229316 361946 222938 187248 207854 191846 177463 216991 806906 302269 302186 276996 287864 389767 878868 812046 840289 81876 166688 140977 309840 316074 288688 481711 187608 801916 268641 286181 82566 1144 OrniiitiiH* Hoin6 104360 62000 228380 168336 114072 69329 39976 66119 62017 99564 71811 93889 109991 118664 108908 180303 106892 166820 SoldiorH* Moino 25828 128679 131694 119649 144656 228718 166688 247606 rinllopn fnr 160 1360 4880 10970 7222 30387 24622 16600 24073 31604 71301 80233 119122 98458 63147 61146 44918 66902 67027 65363 66160 66789 67686 77666 76676 66600 62723 ItiduHtTifil Homo for Rliiid 768 13302 61039 30084 31882 26786 8876 Bi^iiodiot Homo 3000 3660 2700 6884. 7222 6088 7878 7267 6688 PriHonorH* Aid Anflooiatioii. . . . 1063 1000 260 46 Hohool for Doaf and Dumb. . . 600 I960 2400 10800 7000 16000 16000 16600 22146 22100 98018 129824 79609 88419 99241 93177 91886 112763 187232 108332 182423 144493 142117 180466 142414 116246 106827 IuHtltutlo7i for Feeble Minded. 12293 40490 64186 120970 163069 124800 162108 187266 202801 319630 329393 287904 810390 Reformatory — Reform Schools 20233 23346 73163 66674 92886 60020 66467 66851 116248 118194 124884 133714 146906 143166 176222 167062 179799 Penal— AuamoHa Ponitontiary 60876 . 47310 71997 103888 124480 111739 166776 170947 187994 111996 166260 217884 288364 268614 246114 Ft. Madison Penitentiary 660 1033 10000 9213 19263 26726 46661 78369 36094 63299 30946 70217 64229 41824 ' 62866 118366 78083 70640 71963 72186 69103 64007 70636 69117 80678 129137 127626 191312 Misoollaneous — Fanners' Institutes 1677 4106 4678 6689 6261 A jrrimi 1 turn 1 Hf>nioty. 300 3024 6149 4966 14942 18066 11747 12811 14066 19704 29446 34766 34310 33410 82314 35888 347.‘'6 37913 88042 38488 48279 47439 42699 48932 44610 34864 National Guards 1419 6791 18220 44402 62965 74286 68122 79602 92922 71187 96844 79836 116806 Fish Com mission 3899 8462 7622 1761 6259 7779 8866 7287 4929 8481 4713 7267 9676 8811 6766 Weather Horvioe 1974 1287 2071 2462 1918 8636 6241 6716 6383 6826 6376 Geological Survey 6003 9964 18064 2417 10000 12818 19123 6631 20887 18681 17933 17813 State Library 1170 447 262 300 160 700 60 3124 26 3613 1000 4786 1000 4300 4160 6377 8020 18163 10638 ii9il 12833 18325 16880 19719 19967 26980 State Historical Society 7000 1000 1000 1000 1000 1600 2000 2000 2000 2000 3000 2000 2000 2000 2000 State Ilistiorioal Oolleotion 1.362 8389 14982 10909 46906 23619 State Horticultural Society 1000 2000 2000 2000 2000 2000 4260 6000 2600 6000 6000 6000 7600 3600 6426 N. B.— Tho bionninl poriods vary as to date of termination: That for 1846-48 closes November 30, the periods from 1848 to I N. B.— In order to have the total cost of the Institutions of Iowa the expense of the Board of Control of State Institutions 1881 end on dates raiiKiiiK from Ootol'or 31 to November 6, without any apparent reason; the period of 1881-83 begins December 1, should be added to the expenditures for the Charitable, Reformatory and Penal Institutions set out above for the periods of 1897- 1881, and ends Juno 30, 1883; from 1883 down tho biennial periods all end on June 30. | 1899 and 1899-1901 ; for the former the amount was 124,678.80 and for tho latter 148,031.69. 13 argest amount $179,799, was expended during the last period of 1899-1901. Prior to 1871 there was but one penitentiary the ex- penses of which did not exceed $30,000 for any period. The expen- ditures for the penitentiary, at Anamosa have always been greater than those for the penitentiary at Ft. Madison since 1877-79 for the reason that the latter received a largo amount of revenue from the sale of the labor of the convicts. The largest amount expended for the institution at Anamosa was $288,364 in 1895-97 and for the one at Ft. Madison $191,312 in 1899-1901. The significance of the growth of institutional expenditures in the state budgets of Iowa can be most readily appreciated if we study the total expenditures for the various classes of institutions and com- pare with the state’s outlays for other purposes. In Table IV is given a summary of such expenditures since 1846 together with the per cent, of increase or decrease from period to period and the per cent- age or proportion which the total institutional expenditures consti- tute of the entire expenses of the state and what proportion of the whole general expenses of the state make. Prior to. 1858 the state paid out nothing for educational institu- tions. In 1858-59 $11,251 was expended. The outlflys, however, did not exceed $125,000 for educational purposes until the period of 1881- 83. During the eighties such expenditures averaged about $165,000 and during the nineties ihe average was over $300,000 for each period. A marked increase in such expenditures took place during the last biennial period, the amount for 18^9-1901 being $726,448, an increase of 81.4 per cent, over the preceeding period. From $650 in 1843-50 the cost of Iowa’s charitable institutions in- creased to $154,267 in 1858-59. The amount then fluctuated somewhat up to 1867 when it increased to $633,230 for the ensuing period. The expenditures thereafter remained about $600,000, In 1883-5 they amounted to $1,241,550. The maximum expenditure, $2,269,119 was made in 1895 -97. There has been a decrease since, the outlay the past two years being $1,896,081. Of these amounts the Insane Hos- pitals have taken the larger portion. Thus in the period of 1867-69 the Hospitals cost $411,910 and the other charitable institutions $221,319 and in 1895-97 they cost respectively $1,332,462 and $936,657. The expenditures for penal institutions in which the reformatory are included in the summary (Table IV) have increased at about the same rate as those already noted. Before 1871 the total for any one period did not exceed $100,000. From 1871 to 1883 the average outlay was $225,000. Since then it has been over $400,000. During 1899-1901 the maximum was reached, $616,226. The total outlays for all institutions in Iowa has increased from $930 in 1846-48 to $3,530,839 in 1899-1901. They did not go above $100,000 until after 1857 ; nor above $500,000 until after 1867. From 1869 to 1883 they remained about $l,000,t00. Since 1895-97 the total expenditures have been above $3,000,000. The significance of these increases becomes apparent when we compare them with the other outlays in the state’s budget. Do the expenditures for the educational, charitable, reformatory and penal institutions constitute a greater or less proportion of the expenses of the commonwealth today than they did twenty five and fifty years ago? The showings of Table IV are most interesting and instructive. Before 1857 the institutional expenses increased from 3.4 per cent of all to 31.9 per cent. During the next ten years they averaged about 45 per cent of all state outlays and about 55 per cent from 1869 to 1883. From the latter year up to the present the proportion remained above 60 per cent and since 1893 it has been above 70 per cent. In other words the people of Iowa spend over 70 per cent of their state revenues for the maintenance of their state institutions and less than 30 per cent for all other state expenses. In 1899-01 the institutions absorbed 77. 1 per cent, and general state expenses required but 23.9 per cent. The actual expenditures were $3,530,089 for institutions and $1,048,259 for the judicial, legislative and executive branches and the incidental expenses of the state. TABLE IV— SUMMARY OF EXPENDITURES FOR INSTITUTIONS AND GRAND TOTAL FOR ALL STATE PURPOSES WITH PER CENT OF INCREASE, 1846-1901. Fiscal Period 1846-48 1848-60 1850-52 1852-54 1854-66 , 1857 1857-69 1859-61 1861-63 1863 65 1865-67 1867-69 1869-71 1871 73 1873-75 1875-77 1877-79 1879-81 1881-83 1883-85 1885-87 1887-89 1889-91 1891-93 1893-95 1895-97 1897-99 1899-01 Proportions Insti Geu. tution Exp. iO C £-t'£-^00 05rf'O0000C0iC05Ttl}>05 05£-lClOt>*r-l00':005«C>?00l 05 05QOCX3:C!'<#lCiy3:OiOiCTi^CO'^Tt CQWC000rHOiC05'rH '«^O«0(MOO03iO-^0i00THC0T-lC0C0C- ■rHT-iCOlOTliCOCO'^'>tilOCC>l01ClC10iOlCCO?0«DC'?Dt-E'i>’t- Per Cent ■ CQ CQ 05 £- lO OQ 05 00 1C CO 00 Ttl T-l lo 1:0 05 Oi N 05 CO i> 00 lO tH rH ';D050^?0^0005(?iOTtiCOO-rHTHTHi>.i:D«DCOJ>CO(M050t- O5eO|OT(Mt-^T|l(0i'^?C'CQ |THr-l|i-HCO| 1 (Mj(MTH Grand Total 138746 76017 105834 105799 245344 310746 535068 590528 526186 680373 969648 1554ni4 1939857 2005900 2003220 2233797 1973837 1950313 2286738 3139813 2921612 2825004 3044036 3768424 3677047 4748264 4272394 4678548 Per Cent ■ 05 «C> 00 0? r- »C 1C 1C 05 05 t- 0? Tj! Til rH (M Tt i;0 CO •05iCTti'^05C-lC00 05C;»lC05TliOCQOC^W005«C>-rHiCTHCQ05(M' •-lTjC0«0t-'i-lTHC<*05 i-IOTjHOiCOTfICOlCitOOi-.-lTHrH IrHO? tHi-HtH ; O.. TH 1 1 , 1 Miscel- laneous OC-(?Q'^03-rH^TMt-lCT-iC00005«0-rH00 00 C0J>t-00(0?t-C0?0C0C0 t-'-fi:D0i»C00OC0TtlC000(M«C>tH0505C3C0TtirH^->-l05C005i-HTjC!C£-I>CQCCQ(0iC0 COOlCeOOi-HK5TH05050100i0005«OTt^05THC^lCOOlC'rH t-h rH CO CQ rH rH 05 CO T^t Tj< Tfl IC ic t- 05 05 CO 03 1C 05 05 -r-l tH 05 tH iH tH iH iH tH 05 05 03 Per Cent •lCi>'tH05 001CC5 05 05 05CO ICOO 05iH05 ?OrHTtl [ •T^t-£H00 00'^00lCTH0505TiHTtlO05 05 05THOO05-rH0d00«01C0S* •00t»|OC0t-:01ClCTiHl0rHrH THrH(0005| liHrHCOI •ool-^ I jrHjiH j 1 I Penal } OC0OC0C5':0rH05'^05?DOlC05iH05iHl>C005TtllClCC0C0C005«C' OC0OrHlC051ClC05 05Tt^lCC-?0TtlTj^05 00 C0OTtlTt<'^lHrHC5C:05 1 lCOOG5 05lH«0C0O 05 05TtiTji00{H05 05TliiC0505050505£HlH0505 1 ©&rHO0505«0?D00iOC0OOr-iC«C’C005'r-iOC000C00505-rHC0e0?0 IH rH05Tt(J:-COlOCC05£-50:COOCO:01ClCl0 0505iHT}<05?0^ CO 05 O O TjH 05 O IC Tt< 00 rH 05 CO Tt< tH . • O 05 tH CO CO 05 rH Tji CO 05 Tj< tH rH rH 105 50 IrH rH rH I : M " 1 1 1 ' 1 1 1 Chari- table $ 650 3300 7289 48840 114560 154267 121997 108829 159270 287036 633230 934600 807234 706352 706430 635100 608116 743810 1241550 1169585 1335237 1452985 1615450 1651287 2269119 1933200 1896081 Per Cent CO 00 05 IC uo 05 lCl>-CO05O5 00 CO rH 05 t- 05 CO tH 1 ||^^®j*'^|'^ 1 OOTt(C5|lC05 rH 00 Educa- tional rH kC 05 05 00 Ttl I> CO rH 05 rH IC ic 00 CO t- Tt( lO Tl< C5 00 Fiscal Period 1846-48 1848-50 1850-52 1852-54 1864- 56 1857 1858- 59 1859- 61 1861-63 1863-65 1865- 67 1867-69 1869-71 1871-73 1873-75 1875-77 1877-79 1879 81 1881-83 1883-85 1885-87 1887-89 1889-91 1891-93 1893-95 1895-97 1897-99 1899-01 16 C. COMPARATIVE STATISTICS. We shall be able to realize more fully the striking significance of this enlargement in the institutional accounts in Iowa’s budget if we measure the expenditures in the light of the growth of popu- ation and wealth and contrast them with similar expenditures in other states. The population of Iowa increased from 192,214 in 1850 to 2,231,853 in 1900. Estimatinsr the wealth of the state in 1900 upon the basis of the ratio of increase from 1880 to 189) (the returns of the last census have not yet been published) Iowa’s wealth increased from $23,714,638 in 1850 to $3,026,161,844 in 190!>. The per capita wealth in- creased from $122 to $1,359 in fifty years. The annual expenditures for institutions during that time increased from $1,065 to $1,765,419. Meantime the sources of the states income, namely the valuation of the property assessed for taxation, increased but little compared with the increases just noted. The assessment of 1850 was returned at $22,623,334 or $117.75 per capita and the returns of 1890 amounted to only $539,753,759 or $241.84 per capita. The increases in population, true wealth and the valuation of taxable property by decades are pre- sented in Table V below. TABLE V— POPULATIOlSr, WEALTH AND AS- SESSABLE PROPERTY OF IOWA. Year Popula- tion True Wealth Per Capita Taxable Property Per Capita 1850 192214 $23714638 $ 122 $22623334 $117.75 1860 674913 247338265 366 205166983 303.93 1870 1194020 717644750 601 302515418 253 . 36 1880 1624615 1721000000 1059 398671251 245.39 1890 1911896 2287348333 1196 519216110 271.59 1900 2231853 *3026161844 1359 539753759 241.84 ^Estimate based on increase from 1880 to 1890. The increase in the annual expenditures for the various classes of institutions maintained by the state of Iowa is shown in the succeed- ing table. The amounts given are one half the sums expended for the biennial period covering the decennial years. The outlays for edu- cational institutions has increased from $5,477 in 1860 or less than one cent per capita to $363,224 in 1900 or a trifle over sixteen cents per capita. From one mill per capita in 1850 the state expenditures for charitable institutions increased to 42.4 cents in 1900. The expense of maintaining the penal and reformatory institutions has increased from two mills ner capita to nearly fourteen cents. It will be noted that the expenditures for the penal and educational institutions con- tinue nearly the same throughout the fifty years. The per capita ex- penditures for all institutions increased from five mills in 1850 to 17.1 cents in 1860, to 49.4 cents in 1870. For 1880 the per capita decreased 17 to 31.6 cents but it jumped up to 56.2 'cents in 1890; and last year it was nearly 80 cents per inhabitant. As the amounts given are for all expenditures the decrease in 1880 in the outlays for the educational and charitable institutions was probably due to a decrease of the ap- propriations for buildings during that period. TABLE YI— ANNUAL INSTITUTIONAL EXPENDITURES OF IOWA FOR DECENNIAL YEARS. Year Educa- tional Per Cap. Chari- table 1 Per Cap. Penal 1 Per Cap. Miscel- laneous Per Cap. Total Inst’n Per. Cap 1850 S S 325 .001 $ 516 .002 $ 223 .001 $ 1065 .005 1860 5477 ’6o8 60998 .09 39179 .058 10267 .015 116923 .171 1870 59403 .049 467300 .391 38737 .032 24784 .02 590226 .494 1880 43181 ,026 8040'9 .187 130744 .08 35359 .021 513344 .316 1890 121310 .064 726495 .379 161123 .084 75547 .039 1084526 .662 1900 363224 .162 948040 .424 308113 .138 145666 .063 1765044 .791 But while there has been almost a steady increase in the expendi- tures for institutions in Iowa the cost of the judicial, executive, and legislative branches and the incidental expenses of the state gov- ernment have decreased. From 1850 to 1870 the per capita outlay rose from 9.8 cents to 31.8 cents; it then decreased to 22.9 cents in 1890. In 19 jO the other general expenses of the state amounted to 23.6 cents per citizen as against 79. 1 cents for institutions. These increases to- gether with the total and per capita cost of the state government of Iowa for the decennial years are given in Table VII. TABLE VII— INSTITUTIONAL AND OTHER STATE EX- PENDITURES OF IOWA. Year Popula- tion Institu- tions Per Cap Gen. State Exp. Per Cap Grand Total Per Cap 1850 192214 $1065 '$.005 $18943 $.098 $20008 $.103 1860 674913 115923 .171 179190 .265 295113 .436 1870 1194020 590225 .494 379702 .318 969927 .812 1880 1624615 513344 .316 461811 .284 975165 .600 1890 1911896 1084526 .562 437491 .229 1522017 .791 1900 2231853 1765044 .791 523854 .235 2289274 1.026 The financial history of American states has been similar to that of Iowa with respect to the growth of institutional expenditures in their budgets. Few states expend a larger proportion of their reven- ues for institutions than Iowa, although many of course spend larger sums than Iowa does. In Table VIII are presented the institutional expenditures of fourteen states together with their total state budgets. The states of Connecticut, Pennsylvania, Alabama, Missouri, and 18 California disburse money from their state treasuries for the support of their county and common schools which is not the case in the other states taken. To make the comparison uniform throughout those amounts should be deducted: — In Table IX showing proportions, this is done. In per capita expenditures for educational institutions Iowa ranks below all of the states taken except Massachussetts and Ohio. Excluding the common schools Iowa expends more than Pennsylvania, Connecticut, Alabama or California. She ranks with the majority in outlays for charitable institutions TABLE Vm— COMPARATIVE STATE EXPENDITURES FOR INSTITUTIONS AND STATE BUDGETS. (ANNUAL) iscal Year Ends ер. 80, 1900 ес. 31, 1900 ep. 30, 1900 ov. 30, 1899 ep. 30, 1900 ep. 90, 1900 ov. 15, 1900 un. 30, 1900 lep 30, 1900 ul. 31, 1900 an. 30, 1900 ^0.30,1900 'ec. 31, 1^00 un. 80, 1900 un 30,1900 Per Cap. cc so r- oi CO CO CO Oi’^cococooco»oiooic CD t-I §© Grand Total of all Expendit’rs $2534496 9655621 20848535 15336838 3480534 2198420 5124382 5222234 '.7035167 6120164 650672 1016741 4618272 9518608 2289274 Per Cap. lO os 00 tH tH -r-l Tfi CD CO CO T-, OOt-OSlOOSlOOOlOlOi-IOO'^-r-lOS i0NC-'^ OCOCD-'^WOSOCOOSOOOQOCOCO'^ COOOO-0 1— 1 OS 00 l>* lO CD CD CD CO lO CO£>-Tt(t-OQOi>iOOOCD03£-OiCCD '^lOrtHt-t-COt-OSOOiOCDCOlOC- T-H CO OS OS rM CO (M CO (M CD tH e© Per Cap. COCDTt^t-NCOt-lOCOCDlOCDlOC-CO iOiOC00005'^r>t-OTt<-C30C-0£-COOO 05 tJH CO rH 00 00 1-1 CO t- CO €©-rH tH Per Cap. 05 05 00 OS 00 05 00 CO CO CD CO tH10050StJ!tiOOC005-^l010TlKCDCDCOC50'?*^ ^ y-i Chari- table $374280 1267308 6019783 2517036 280410 212789 2379610 1328351 2046771 1056410 244691 358052 684867 1564607 948040 Per Cap. 05 CD OS 00 OS 00 CO CO -i-l 00 05 0SC0C005050Sl0O^OC0O000SCD lO,-(0005'^0'>^CO)OTt05COCDi-H «© tH 05 Educa- tional ,*$537587 469324 262886 1*6432767 1 272881 ' *902324 246896 968436 1531031 881518 173900 215249 *1205158 *3994546 363224 Pop. 1900 908420 2805346 7268894 6302115 1188044 1828697 4157545 2420982 4821550 1751394 401570 1066300 3106665 1485053 2231853 State • Conn Mass New York Penn Maryland Alabama. Ohio Michigan Illinois . . Minn So. Dak . . Nebraska Missouri . Califor’ia Iowa ^Includes Expenditures for County and Common Schools, flncludes Biennial Fiscal Periods, one-half taken. 20 But while Iowa does not spenn so much as do some of her sister states but one state out of the fourteen taken expends a greater per centage of its revenues for institutional purposes. South Dakota exceeds Iowa, spending in 1900 81.2 per cent for state institutions while Iowa expended 77.1 per cent. Ohio comes next disbursing 73.6 per cent. But one state, Ohio, spends a greater proportion than Iowa for charitable institutions, the former expending 46.4 per cent and the latter 41.4. Michigan, Illinois, South Dakota, and Nebraska rank above Iowa in the proportion of outlays going for educational insti- tutions. But four states, Connecticut, Massachussetts, Ohio, and Illinois, devote a greater per centage to penal and reformatory institu- tions. In the following Table IX the percentage is figured on the basis of the entire state budget of the state and not upon the total institution- al expenditures. The per centages in the fourth column headed “Total institutions’’ are not obtained by adding the first three columns but represent the per centage which the total institutional expenditures in Table VIII are of ^the total state budget. The expenditures for common and county schools in Connecticut, Pennsylvania, Alabama, Missouri, and California have been excluded in this computation. TABLE IX— SHOWING PROPORTIONATE OUTLAYS FOR IN- STITUTIONS IN VARIOUS STATES. States Educa- tional Chari- table Penal Total Instit’s Other Sta. Ex. Connecticut 3.9 17 14.3 47.3 52.7 Massachusetts 4.8 13.1 14,5 37 63 New York 1.2 28.8 7 45.3 54.7 Pennsylvania 1.1 37.2 4.7 52.5 47.5 Maryland 7.8 8 1 1 20.1 79.9 Alabama 8 15.8 13.5 42.3 57.7 Ohio 4.7 46.4 16.1 73.6 26.4 Michigan 18.5 25.4 9.3 56.6 43.4 Illinois 21.7 29 6.9 65.1 34.9 Minnesota .... 14.4 17.2 14.2 50 50 South Dakota 26.7 37.6 16.1 81.8 18.2 Nebraska 21.1 35.2 2.7 66.6 33.4 Missouri 4.2 19.2 9.4 35 1 64.9 California 8.1 25.5 11.4 49.9 50.1 Iowa 15.8 41.4 14.3 77.1 22.9 The marked difference between the expenditures for Charitable and Educational Institutions in some of the Eastern States and those in the Western States is due in the main to the fact that in the east large expenditures for such purposes have not been deemed necessary or urgent because of the existence of numercfus well endowed and well equipped private institutions that satisfy the needs of the people of those states. 21 IL SOURCES OF REVENUE. The revenue that is required to carry on the work of the institu- tions of the state of Iowa is obtained from various sources. For most of them the bulk of their income is derived from appropriations of revenue in the State Treasury which is obtained from the collections of taxes assessed on the property of citizens in the counties, collected by local treasurers and by them covered into the state treasury, and from taxes and fees collected from corporations. It is probable that most tax payers assume that the state has ob- tained all of the revenue with which it has established and maintained the institutions now regularly included in the state budget, from the annual state levy. Their assumption, however, is only partially correct. There are a number of what I may call Supplementary Sources of revenue that play an important part in the finances of some of the institutions. These must be duly considered if we would fully measure the real or exact cost of their maintenance and appreciate the actual financial burden borne by the tax payers in sustaining them. The various institutions here classified as “Miscellaneous” are sup- ported directly and wholly by appropriations of funds in the state treasury “not otherwise appropriated. ” Likewise the Teachers In- stitutes, the Benedict Home, the Prisoners Aid Association, have been maintained solely — so far as the state was concerned, out of the general revenue fund of the state. The Agricultural Societies or Associations, the Benedict Home, and the Prisoners’ Aid Association are private corporations and have other sources of income than the State Treasury, but they are not considered here. Of the institutions under the Board of Oontrol the two Industrial or Reform Schools at Eldora and Mitchellville are, with the excep- tion of the income represented in products raised and consumed at those institutions (to be considered later) supported entirely by drafts on the state treasury. In case the state furnishes transportation and clothing to inmates of the School for the Deaf and Dumb or for the Feeble-Minded the cost is charged against the counties from which they come. The sum charged is certified to the Auditor of the Coun- ty who collects the amount by suit if necessary and transmits it to the State Treasury. The same is true for the College for the Blind as regards clothing furnislied inmates. The amounts received at the State Treasury for the biennial period ending June 30, 1899 on these accounts for the institutions just mentioned were |5,094.39 for the Deaf and Dumb, $19,275.67 for the Feeble Minded, and $1,299.21 for the Blind. The general expense or cost of supporting the inmates of these institutions is borne by the State Treasury. A different rule obtains in the case of the institutions for the indi- gent orphans and for the insane. The immediate cost of sunporting soldiers’ orphans or indigent orphans at the Home in Davenport is made a direct charge upon the counties whence they are received, 22 The amount is'or may be collected by the counties liable in the same manner as other local tax levies. For the two years ending June 30, 1899, 156,834 52 was receipted for on this account by the Treasurer of State. Thirty six counties out of the ninety nine in the state paid nothing for the care of orphans at the Home the total expenditures for that period on account of Orphans’ Home was $106, 892, 22, the sixty- three counties contributing over 56 per cent of the support. It is not exactly clear from the provisions of the Code to what extent the county author- ities are expected to collect the amounts charged against them for the support of orphans from their guardians or parents or relatives. How much is obtained from such sources and how much from the ordin- ary tax levy for such purposes can not be shown as the reports do not differentiate the sums received from the two sources. The cost of maintaining the state hospitals for the insane is met partly from the general tax levies and partly from special levies and receipts from private sources. Parents or relatives may pay the expense of an inmate’s care at one of the Hospitals and the local authorities may collect the amount charged them by action or suit against their estates ; but here again what proportion is obtained from private individuals and what from special levies made to meet the insane account can not be even estimated because the financial reports do not separate the returns. It may be presumed that a very considerable proportion is obtained direct from private parties relat- ed to the insane, a greater proportion, undoubtedly, than in the case of the Orphans’ Home. For the biennial fiscal period of 1897-99 the amount expended for the insane hospitals aggregated $1,157,027 and 62 per cent, of that amount, viz., $727,550.11 was collected from the counties as a special insane tax. Before passing on we should note what is by many considered a serious evil that has risen in our state as a direct result of the diff- erence in the methods pursued in supporting the several institutions. The fact that the cost of maintenance at the Industrial or Reform Schools and at the Feeble Minded Institutions is met entirely by drafts on the funds in the State Treasury and the expense of caring for orphan children at the Home at Davenport is charged against the county treasuries has led to many destitute children, morally, physic- ally and mentally sound, being sent by County Boards either to the schools for incorrigibles or the Feeble Minded Institution for the sole purpose of escaping the burden of their support. The results, as has frequently been pointed out by the heads of our institutions, are de- plorable, and utterly bad. There is no apparent justification for these differences in the methods of supporting the institutions. From the very nature of the case the entire body politic is as much inter- ested in the maintenance of the Orphans’ Home and the Insane Hos- pitals or of the Feeble Minded Institutions as are the immediate rela- tives or friends of the persons so unfortunate as to make it necessary to place them within such institutions. Furthermore there is no obvious reason why one course should be pursued in providing for support with one institution and another method with another insti- 23 tution when there is no essential difference between the institutions viewed from the stand point of their support and financial necessities. Even conceding that it may be advisable to require counties to pay the cost of their resident insane, or of destitute orphans it is unwise both as a matter of public policy and as a matter of business to con- tinue the present methods that encourage a practice which either ed- ucates criminals or else places young boys and girls amidst associates whose presence depresses and enervates youthful minds at a time when they need the utmost encouragement to attain to a healthy, self dependant maturity.* Passing on to the Soldiers’ Home, the most important supplement- ary source of revenue for this institution is the Congressional appro- priation for Dependant Veteran Soldiers and Sailors. For the fiscal period of 1897-99 there were state Auditor’s warrants drawn to meet appropriations to the amount of 1166,587.83 and during that same per- iod there was received from the national government ^101,344. 84, near- ly two thirds the cost of the maintenance of the Soldier’s Home. In former years not an inconsiderable source of revenue was the excess pension money taken from inmates of the Home but recent legisla- tion has done away with this^source. For the support of the penitentiary at Fort Madison the state ob- tained during the two years ending June 30, 1899 over one half the cost of the institution from the sale of the labor of the convicts. The amount expended was |137,525. 71 and the amount paid over to the Treasurer of State by the warden was $60,685.02. The revenue receiv- ed from the penitentiary at Anamosa is a small item so far as the State Treasurer’s books indicate but here we must not overlook the very considerable money value represented in the labor of the convicts in the construction of the state buildings at that institution. Before its abandonment in 1900 the Industrial School for the Blind at Knox- ville carried on for the employment and benefit of the inmates vari- ous industries, the products of which were sold and the proceeds *At the close of the meeting of the Superintendents of the Institutions under the Board of Control, on June 19th. at which time the above was read, the Superintendents of the two Reform Schools, in conversation with the writer, took exception to the statement respecting the harmful effects of the existing divergencies in financial meth- ods noted in the text. They contended that all who had been sent there are inclined to criminality or incorrigibility and that they are therefore proper subjects for the Reform Schools. The .Superintendent of the Soldiers’ Orphans’ Home rejoined that his experi- ence led him to agree with the writer’s contention ; that he knew of numerous cases where county authorities had sent children to the Reform Schools whose only offense consist- ed of their orphan state and certain mischievous propensities that could have been easily eradicated in the Home at Davenport, because it was cheaper for the counties to .send them to the former. While it may be conceded that all who are sent to the Indus- trial Schools are technically and actually inclined to vicious habits, yet there can be no doubt that where there is a decided pecuniary inducement ever presented to our Boards of Supervisors, the probabilities are great that advantage will be taken of it— not al- wavs consciously, perhaps, but nevertheless taken. And with children under fourteen years of age anyway, it is always the presumption that the atmosphere of an orphanage tends to greater and more rapid mental advancement than the environment of a Re- form School, no matter how excellent the latter may be managed. 24 paid in part to inmates and in part into the state treasury. During the fiscal period of 1897-99 |19,902.99 was received from such sales while the gross cost of the institution amounted to S36,823.76. The actual disbursements authorized made from the state treasury however aggregated only $26,785.87. This apparent discrepancy arises from the fact that during the first year of that biennium the institution auth- orities bought, sold and accounted for their manufactured articles and supplies'and the state simply made good any deficit experienced. By no means the least important of the supplementary sources of revenue drawn on constantly for the support of most of the institu- tions under the Board of Control and for the College of Agriculture and Mechanic Arts at Ames is the income represented in the products raised or manufactured at the institutions and therein for the most part consumed. The products actually sold and the sums received therefor have already been referred to ; but in addition to this most of the institutions raise on their lands large amounts of hay, cereals and vegetables, produce great quantities of milk and butter, beef and pork and these products are consumed at the institutions. Fur- thermore there are vast quantities of necessary articles produced by inmates of the institutions such as brooms, wooden ware, clothes and bed furnishings and an immense amount of labor performed by in- mates in the conduct of the institutions. It is evident on a moments reflection tliat if the state snould go into the market to purchase the commodities produced from the farms and gardens and industries of the institutions it would require inuch larger outlays to maintain the institutions. The money value or market price of all the articles so raised and consumed at the institutions and the services of inmates should be duly considered and included in reckoning ui) the income and expense accounts of our state institutions. For the year ending June 30, 1900 the reported market value of the farm products raised and consumed at the Hospital for the Insane at Mt. Pleasant amounted to 111,802.62 and the value of the articles manufactured by the inmates or emifloyees reached $7,580.61 — a total of $19,383.23. At some of the other institutions the amounts are larger because of greater facilities for farming or manufacture. Up to the present time the reports of the financial officers of the institutions have not always or systema- tically shown the value of these sources of supply; but from July 1, 1901, I am informed the value of all products and manufactured ar- ticles consumed in or about the institutions under the Board of Con- trol will be reported. With these reports it will be possible to ar- rive at the exact money cost of carrying on the several state institu- tions The supplementary sources of income of the educational institu- tions yet remain to be considered. For the biennial period closing June 30, 1899 the total expense of the Normal School at Cedar Falls amounted to $151,881.49 according to the report of the treasurer of the institution. But only $89,084.60 of that sum was disbursed from the State Treasury on account of the Normal School. The balance of the income of the institution at 25 Cedar Falls came from students fees and tuitions and a few miscellan- eous sources. During the same period the Agricultural College at Ames cost the tax payers direct 164,731.86, but this amount represents only about one fourth of the entire expense of that institution. The supplemen- tary sources of revenue drawn upon were five in number viz. (1) Students fees, rentals and tuitions, relatively small in amount, how- ever; (2) Rentals of College lands; 13) Sales of produce; (4) Con- gressional appropriations and (5) The College endowment fund. Owing to the change in the date of the fiscal period of the College reports the exact amount received from these sources for the biennium of 1897-99 can not be given. The Secretary reports the net income from sales of farms, dairy, and mechanical products at 155,521.43. From the national government under the Morrill Act |47,000 was received (the amount is now |50,000 per biennium). The College En- dowment Fund — which represents the proceeds of sales of lands given the state in 1862 by Congress to endow or establish the school and accumulated interest which from time to time has been added to the fund all of which is loaned out upon farm mortgages — produced $75,775.10 during the two years here considered. On July 1, 1899 the total Endowment Fund including the appraised value of some college lauds amounted to $682,823.52. The amount of the Fund and the income therefrom are much less than it would otherwise be because of an unfortunate arrangement entered upon many years ago regard- ing the disposal of the College lands. Some 200,000 acres of Iowa lands were leased at a rental of 8 per cent, of the value appraised at the commencement of the leases with the option given the lessees of purchase at the expiration of the leases at the original appraised value. The result has been that the College has given title deeds to thousands of acres of fine lands sold at $2, $3 and $5 an acre that are today easily worth and would command $20, $30, and $40 per acre. The State University obtains a large part of its income from the .same kinds of sources as the institution at Ames. The proportions however, obtained from the various sources, differ very much. While at Ames but little is obtained from tuitions, the University during the period of 1897-99 received $119,826.57 from tuitions, about one-third of its income. Nothing at all is derived from productive industries. From its endowment fund the interest receipts aggregated $32,543.19. Occasionally there are private gifts and donations that come into the University of lands or money but they do not consti- tute a regular and noteworthy item in its income. The same obser- vations are applicable respecting the management of the University Endowment Fund that were made regarding the Endowment Fund of the institution at Ames. Some 46,000 acres were given the state by Congress for use in founding a University ; and later there was added the so called Saline lands; making in all 61,310 acres that the TTniversity received. The bulk of the first grant was sold by the early trustees at an average price of $3.25 an acre. Various protests 26 against the hasty and ill advised sales of the land and some attempts to prevent them were made prior to 1860 but with little avail. — (See Annals of Iowa Vol. IV pp 16-24. ) The total fund possessed by the University on June 30, 1899 was only $235,120.36. This is loaned out on farm mortgages as is the case with the Endowment Fund of the Agricultural College. Besides its income from tuition and its endow- ment fund the University received during the period here taken the sum of $234,485 from the State Treasury. For the support of the University there are now standing appropriations aggregating S126,- 000 per annum. In addition there has been allowed that institution for a period of eleven years commencing with 1897 the proceeds of a special annual tax up to $55^000. In one instance, noted in a previous section, resort was had to the funding power of the state to obtain revenue for an institution, viz., for the Penitentiary at Fort Madison. This power was utilized dur- ing the first four years of the state government at a time when the state was getting its fiscal machinery into working order and before sufficient returns could be realized from the tax levies to carry on all of the work of the state government. So far as I can discover the bonding power has never been directly resorted to since and in the ordinary course of events never will be again. But while bonds have not been issued expressly to secure funds for institutions resort has been had to two makeshifts in the way of anticipating revenue receipts that in character and in effect approach closely the funding power ; and both are methods to be discouraged — nay more, absolutely prohib- ited if we would secure and maintain that control over our state ex- penditures which experience has shown should be exercised in order to attain complete accountibility of executive or administrative officers for funds placed in their charge. In 1896 an appropriation was made for a new Insane Hospital at Cherokee, of $60,000 per annum until the amount reached $200,000. The commission appointed to construct the hospital anticipated the successive annual appropriations and entered into contracts for the immediate construction of the building, the contractors agreeing to wait for their money until the appropriations became available. In January 1899 the Treasurer of State disbursed $121,774 in payment of contracts for work done two years previous. Somewhat similar is the case of the time warrants issued against the special University tax collections. In 1^98 the Assembly extended the special levy auth- orized for building purposes one year to provide funds for the pur- chase of books and rebuilding the library destroyed by fire. The friends of the University had striven to obtain an appropriation at the adjourned session of the 26th General Assembly in 1897 but failed. The tax that had been extended was not due and collectible until 1902. But the Act was so worded that warrants could be issued" pay- able when the additional levy” should be collected. This was done; and there are now outstanding time warrants drawn in 1898 against the prospective receipts from that tax to be paid next year to the amount of $49,000. 27 These two methods or devices for anticipating revenue receipts partake of the nature of funding operations although in a legal sense neither the Cherokee contracts nor the time warrants issued against the special University fund are bonds. They are makeshifts resort- ed to frequently for procuring funds which like a bond issue supple- ments the tax levies. So often were such contracts resorted to that the statutes contain frequent prohibitions of the practice. In one case it was made a misdemeanor. An excess of zeal in conserv- ing what is believed by the governing Boards to be the best interests of the institutions or in meeting what is deemed an imperative de- mand accounts for the use of such methods. But sound finance does not sanction such anticipations of revenue. In neither of the cases cited above did the legislature contemplate the measures taken. Had they been suggested in open debate they probably would have been negatived. It is obvious that if the legislature is to exercise control over the state expenses the resort to such makeshifts should be ex- plicitly provided for and recourse to them otherwise absolutely pro- nibited. It is natural that those directly in charge of an institution should be anxious to secure funds to establish or to increase work deemed necessary or highly desirable and that they should get impa- tient with a slow moving legislative body for not promptly advancing the funds. But it is vastly more important that the legislature should exercise constant and complete control of the use of the pub- lic purse and of the public credit. And if administrative officers or boards can by such procedure as just referred to secure funds ahead of the time specified by law, can contract debts or obligations payable out of future appropriations that may be revoked, it is evident that legislative control of the budget can not be maintained. In emereencies where the support funds are exhausted and the inmates of the institutions are in imminent danger of suffering, the Code has provided for the incurring of an indebtedness to supply the urgent needs. But here definite statutory provision is made and the occasions when the responsible officers are compelled to go in debt are so rare and so likely to attract public attention that the legislature is made aware of the necessity and the extent to which the state has been indebted. The state has a small emergency fund called “The Providential Fund,” which can be drawn upon in cases of losses to an institution due to fire or storms. In 1896 when the Institution for the Feeble Minded at Glenwood suffered the loss of its main building, amount- ing in value to |113,000, the Executive Council of the state not only appropriated all in the fund, but gave its sanction to the Auditor of State issuing and the Treasurer of State cashing warrants for $40,000 more than the law allowed to provide the inmates immediately with the proper shelter. Fortunately for both officers the legislature legal- ized the transaction at its ensuing extra session. We have now noticed all of the supplementary sources of revenue of the states ’s institutions. Taken in the aggregate they constitute a very important part of the available assets of the state in the sup- 28 port of our institutions. Public attention is seldom directed to them and they are but little considered by the General Assembly when the biennial budget is determined, although, of course, the income there- from is presumed upon and more or less reckoned with. But so far as popular discussion goes it is no doubt true that the general belief is that the expense of the several institutions is shown by the ledger accounts of the state treasurer and the taxes paid by the citizens in the counties toward their support — a belief which in some instances as shown is very far from being true. With truth it may be said that in some cases the appropriations from the funds of the state treasury are supplementary to the income derived from the sources which I have here designated as supplementary. We shall later consider the special tax levies for the Agricultural College and for the State University in discussing the methods of making appropriations. Here we have to note that while they are specially ordered taxes, they are in fact a part of the general tax levy for state purposes and are not classifiable as supplementary sources as the special levies for the care of the insane, feeble minded, blind and orphans. For the latter the counties may or may not make a spec- ial levy for the insane or feeble minded, contingent partly upon the presence of their residents in those institutions and partly upon the ability of the counties to collect the expense of their maintenance from the relatives. In the case of the one tenth mill levies for the educational institutions, however, the taxes are levied by the State Executive Council precisely as the regular state levy is ordered levied by that body. It is not left to the discretion of local authorities. It is in reality a part of the annual state levy. To summarize the sources of revenue for' the maintenance of Iowa’s State Institutions: The chief source is the General Revenue Fund of the state. For some of the Charitable Institutions special taxes are collected from counties for the expense of keeping their residents. Most of the institutions under the Board of Control and the Agricul- tural College derive considerable income from the productive labor of inmates and various industries. The Educational Institutions obtain a good deal of revenue from tuitions and some from rentals. The University and the Agricultural College receive a large proportion of their income from interest on endowment funds and from special tax levies. 29 PART III. METHOD OF MAKING INSTITUTIONAL APPROPRIATIONS. From the view point of the citizen and tax payer it is of as mnoh importance — indeed in these days it has come to be of greater import- ance — to know the manner in which the legislature makes appropri- ations of the funds which the state obtains through taxation, the method of disbursing monies therefor from the state’s treasury and the conditions or resrulations controlling the administrative officers in whose hands the funds are placed for the attainment of the objects of the legislative enactments as it is to know the amount and frequency of the appropriations. Modern democracies have shown a willingness to sustain enormous budgets that is simply astonishing but their consent thereto rests on the assumption that they, the people, not only control the amount of the public expenditures but the procedure of public officials in the actual use of the funds allotted to them. Up to the middle of the last century the people who were concerned about the growth of dem- ocratic government and republican institutions were interested prim- arily and for the most part in questions of raising revenue, in the control of the executive and legislature in their exactions from the tax paying citizens. They were not much concerned about the direc- tion or method r'r about the specific amounts of appropriations or the conduct of officials superintending their expenditure. But the var- ious and extensive evils which have arisen in connection with the tremendous increases in the expenditures of modern states have com- pelled a recognition of the importance of the methods in vogue in making appropriations and in the disbursement and application of public funds. The need for adequate regulation and control of ex- penditures with a view to effective and economical use of the state’s revenue has come to be a most pressing, if not the paramount question, in the public finance of the American Commonwealth, espec- ially in the finance of the states and municipalities. The corruption which has become so conspicuous in our local governments and to some extent in our state governments is due in large part to lax and ineffective administration and control of their finance. The great and increasing preponderance of expenditures for insti- tutions in American state budgets which has come about in recent year as we have seen (see Bulletin July 1901 p 331-337) makes the leg- so Islative procedure in authorizing such outlays and their control and audit, a matter of serious importance. During the past twenty-five years in many states the evils resulting from ill advised appropriations from mismanagement and from corrupt perversion of funds to private and political uses have induced considerable discussion of institu- tional expenditures. And material advances towards better regula- tion and control have been made. State Boards of Charities with ad- visory powers and privileges of supervision and audit and Boards of Control with absolute jurisdiction in the administration of penal re- formatory and charitable institutions, whose members are charged with the entire responsibility for their conduct, have in a number of states displaced the numerous seperate Boards of Trustees or Com- missions. Prior to 1898 there was practically no progress made in Iowa toward concentration of responsibility for the management of state institutions and the central supervision and audit of institutional expenditures. Executive commissions and legislative committees be- ginning with the earliest days from time to time made investigations, reported cases of waste of funds, of mismanagement, occasionally of corruption and suggested and urged reforms in the methods of dis- bursing and applying institutional funds. But the improvements urg- ed and those adopted did not, except as noted hereafter, aim at the reorganization of the administrative system. But even with specific statutes prohibiting certain practices — such as transfers of funds or unused balances, exceeding appropriations, and contracting liabilities without statutory warrant therefor — their provisions were rendered nugatory by the lack of constant, central supervision of the affairs of the institutions. When, however, the institutions of the state began in the seventies to demand more and more money to sustain them and it was perceived that they were absolutely absorbing over half of the total revenues expended by the state, the uneconomical character of the administrative system began to be appreciated. Governor O. O. Carpenter in 1876 urged the adoption of 'a State Board of Charities with limited powers. In 1878 and again in 1880 and in 1882 Governor Jno*. H. Gear advocated a Board of Control for the eleemosynary institutions. Governor Buren R. Sherman in 1882, 1884 and 1886 recommended a State Board of Trustees with general powers of supervision to supplement the local boards. Governor Horace Boies in his messages of 1892 and 1894 argued strongly for the aboiution of the seperate boards and the substitution of a single Board of Control of three members. Nothing was done looking towards this reorganization in the financial administration of the institutions until 1898 when, as a result of a searching investigation by a legislative committee, an act was passed creating a Board of Control with complete jurisdiction over fourteen eleemosynary, re- formatory and penal institutions. The passage of the act marked a revolution in the financial affairs of the institutions affected and the Iowa Board of Control is one of the most important experiments now in progress in American state finance. Its achievements thus far in the 31 attainment of efiaciency in the conduct of the several institutions under its charge and of economy in the employment of the state revenue have been noteworthy. So much so that Minnesota has plac- ed the Iowa law on her statute books and her Board has adopted with but little or no change all of the rules and regulations and schedules of the Iowa Board. In this part we shall deal with the methods pursued by the legislature in making appropriations, considering the nature of the grants, their method and duration, the regulations governing the disbursement of funds from the state treasury to the local author- ities of the institutions and the provisions relative to the disposal of unexpended balance of appropriations. We shall then trace the development of the modes of controlling the institution authorities in their use of the funds and of auditing their accounts and expenditures. Finally we shall trace the evolution of legislative supervision and control of institutional appropriations and expenditures and the pro- cedure of the General Assembly with respect to them in the passage of the biennial budget. ( 1 ) NATURE OF INSTITUTIONAL APPROPRIATIONS. Intelligent public interest in Institution expenditures and effective legislative supervision and control of such appropriations are largely dependent upon the nature and method of appropriations. If, when the biennial budget is under consideration, the Finance Committees of the General Assembly can make a clear and compact statement of the nature and amount of the established funds and of those asked for, can present them in uniform and classified schedules for all of the various institutions, the members of the legislature and the tax pay- ing public can exercise intelligent and effective control over institu- tional outlays. Otherwise interest will flag ; it will be unsystematic and intermittent ; and the great bulk of the appropriations will be made with little or no scrutiny. Public interest and legislative attention will center in the grand total of the budget and in special outlays that arouse 'popular interest rather than in the urgency and propriety of the large majority of the particular expenditures sought for. The constitution of Iowa provides that “no money shall be drawn from the treasury but in consequence of appropriations made by law. ' ’ (Art. Ill, Sec. 24. ) It is not sufficient compliance with this consti- tutional provision that an act creating an office or institution or pro- viding for any object requiring revenue declares the salary attaching to the office or specifles the sum to be expended in the attainment of the object of the act. To attain the end sought there must be includ- ed in the act an obvious and definite order or direction to the financi- al officers of the commonwealth, the Auditor and Treasurer of State, to honor requisitions for the amount declared set apart, or else a sep- arate act appropriating so much of the funds in the treasury “not otherwise appropriated” for the specific purpose. The former has been the method pursued with institutional appropriations as a rule 32 while with the state’s pay roll for the executive and judicial officers and clerical assistance the latter, viz. , separate appropriation acts, has been the legislative practice. (A) Confusion in Appropriations. The General Assembly at its regular biennial sessions makes and sanctions appropriations of state revenue for institutions approximat- ing 200 in number. For the institutions under the Board of Control alone the various appropriations made in the Act of 1900 aggregated ninety eight : and these were in addition to sundry standing appropri- ations previously authorized and in force. These appropriations are of all sorts and conditions. There has never been any system pursued by the legislature of Iowa in making appropriations and so far as the present writer can discover, there never has been, aside from recommendations of various committees that have investigated the subject and of the Board of Control, any effort to secure a systematic ordering and classification in the preparation of the institutional accounts when the budget bills are reported for passage. There prevails the utmost variation and confusion as to terminology, schedules, duration of grants and the methods and conditions of disbursements. Take some of the educa- tional institutions : the Auditor of State in his report for 1899-1901 lists the different titles of appropriations for the College of Agricul- ture ; there are four for buildings, one for the president’s residence, one for the General Engineering Hall, one for a horse barn and stock pavilion, and a special tax levy for buildings ; besides these there is a fund for ‘ ‘ improvements and repairs ; ’ ’ along . with these are two entitled “support and current expense’’ and “Repair, current ex- penses and additional support” each and all more or each and all more or less related and overlapping each other somewhat. The Normal School among others has one for “Repairs ” one for “Con- tingent and Repairs” and another for “Contingent Expenses.” This confusion is more conspicuous in the appropriations for the institutions under the Board of Control. As we have already seen when dealing with the sources of revenue (Bulletin for July, 1901, pp 338-9) the Legislature has pursued various plans in providing for the support of some of the charitable and reformatory institutions. The cost of clothing and transporting inmates of the Orphans Home, the Feeble Minded Institution and the School for the Deaf and Dumb is charged to the counties of their residence while for the Reform Schools these expenses are made a charge on the state treasury. The cost of maintenance at the Insane Hospitals is charged to the counties except as to state and private patients. All of the institutions but the Soldiers Home have special appropriations for repairs and contin- gent expenses. For all of the institutions with exception of the College for the Blind and the School for the Deaf and Dumb there are appropriations for “support” computed at so much per capita per month or per quarter as the case may be. With all or nearly all these appropriations the payrolls are met out of the per capita allow- ances ; but with the institutions excepted above there are special 33 annual appropriations for salaries. Before its abandonment in 1900 there were special appropriations for support, repair and contingent expenses of the Industrial School at Knoxville. The term “support” varies considerably. With most of the insti- tutions appropriations therefor include all of the current or ordinary outlays, such as those for food, clothing, heat, light, repairs and salaries. But with some salaries are excluded, with others repairs. New buildings are nearly always provided for by special acts. The same is true for the most part of additions, renewals or improve- ments of any magnitude. For the University and the College of Agriculture and Mechanic Arts, however, appropriations have been made for buildings by special tax levies of one tenth of a mill on the assessable property in the counties without specification or limitation (except as to the maximum amounts available and the duration of the grants). With exception of the income obtained by the latter institution from the national government under the Morrill Act the revenue received from the two endowment funds of the two education- al institutions, just mentioned, may be used for “current expenses” a term of sufficient elasticity to permit a multitude of various outlays. This confusing variation in the content of appropriation terms in legislative acts was productive of much evil in the days prior to the creation of the Board of Control. Not only did this lack of uniformity induce perplexity and confusion in keeping the accounts, rendering impossible, or very difficult, intelligible balance sheets, it encourag- ed and actually produced lax administration of funds and disregard of statutory provisions limiting the uses of appropriations. Support funds were frequently disbursed for pay rolls contrary to law and contingent and repair funds were drawn upon for support. The. Healey committee in 1898 in their report point out numerous instances of such perversions of funds and condemn the practice in strong terms. (See Report pp 7, 15, 24-25, 28, 41-42, 66). As we shall see later m. considering the matter of legislative control of institutional outlays these evils naturally resulted from the hap-hazard way in which institutions were created and provided for by the legislature. There was no systematic consideration of appropriations for institutions in the preparation and passage of the budget. Governing boards and the officials of institutions instead of being regarded simply as administra- tive agents of the Assembly in carrying out a continuous and consist- ent state policy, came to regard themselves as the representatives of special interests who looked after the acquisition of public funds for their several institutions with little or no regard to uniformity in out- lays or to the general public interests. While there has been a very marked improvement in this respect since the act of 1898 the system of approfjriations has not been changed. It contains many absurdities and inconsistencies. In the language of the Board of Control, after nearly two years of practical experience under the statutes, “The present system in the method of making appropriations is unbusiness, like and has nothing to commend it. ” (Report for 1899 p 32). And unless the legislature alters its practice in these matters it is not un- 34 likely that in years to come when public interest in the expenditures for institutions is not so keen as now and the personnel of the Board of Control is changed and there is not that constant effort and alert- ness to conserve both law and the welfare of the institutions the evils of former days will recur. (B) Classes of Appropriations. The only classification of our legislative appropriations that will comprehend all now made for institutions is the division into two classes — the Standing or permanent appropriations, and the Extra- ordinary or special appropriations with the secondary division of each class into Specific and Contingent Appropriations. Standing appropriations, as their name indicates, are continuously in force from the time of enactment until modified or repealed by the General Assembly. They authorize, in the main, expenditures for the regular support or maintenance after an institution has been established and the buildings or the necessary preliminary outlays have been made. Thus, they provide for the heating, lighting, ven- tilation and drainage of the buildings, the salaries of employees and the provisioning and clothing of inmates and medical stores. In a word Standing appropriations as a rule provide for ordinary expenses and current needs. Extraordinary or special appropriations as the term is used in the parlance of our financial reports and legislative estimates are those allotments of state funds made at each session of the legislature ex- clusive of, and in addition to, the Standing appropriations. They authorize specific amounts expended for particular purposes ; the expenditure may or may not be limited as to the time in which it shall be made ; and the actual amounts to be disbursed may or may not be contingent on circumstances or conditions. Thus defined, it is apparent that an extraordinary appropriation may of itself create a regular or standing appropriation. Moreover, it may, and frequently, it does occur that the object for which an appropriation is made can not be attained within the life of the Assembly authorizing the appro- priation, viz. , within two years, and what is an extraordinary appro- priation for the existing legislature becomes a quasi standing appro- priation in the contemplation of the succeeding Assembly. Extraor- dinary appropriations usually relate to the initial expenditures in the founding of institutions : they provide for new buildings, the salaries of new officials, for repairs, renewals and improvements where they are of some magnitude. Appropriations of either class are either “Specific” or “Contin- gent” as to the amount that can be expended. The Specific appropri- ation sets apart a definite maximum sum, frequently with the clause added, “or so much thereof as may be necessary. ’ ’ Excepting those for support and current expenses the bulk of the appropriations for the institutions are specific. An appropriation is contingent when the total amount that may be disbursed from the treasury under the act is dependant upon certain conditions precedent to expenditure which if they exist or come about authorize and permit the disburse ment of money from the state treasury. Thus in the Act of January 16 1849 providing for the establishment of three Normal Schools the ap- propriation of $500 for each was contingent on the subscription of a like sum by private parties for the erection of buildings. In found- ing the Asylum for the Blind at Vinton, the appropriation was made conditional on the citizens of that community raising $5,000, exclus- ive of lands, (ch. 125 laws 1858). A part of the appropriation for the Normal School in 1896 was dependent on the action of the city of Cedar Falls (ch. 137, 26 G. A. ) There are two classes of contingent appropriations that appear regularly in the budgets of Iowa: (1.) Those where the amount of the appropriation depends upon, or equals the proceeds of a certain tax or taxes ; and (2. ) Those where the rate, or unit, of expenditure is specified but the aggregate outlay depends upon the total number of persons or institutions complying with the conditions of the appro- priation and demanding the allowance thereunder. The appropria- tions for building purposes at the State University and at the College of Agriculture and Mechanic Arts are examples of the former class ; these consist of the proceeds of special tax levies of one tenth mill on the assessable property of the counties up to $55,000; receipts in excess of that amount are covered into the General Revenue fund of the state. The appropriation of $50 each for Farmers’ and Teacher’s Institutes that may be organized within the counties is an example of the second class. For most of the institutions under the Board of Control the aopropriations for their support, are. contingent, being usually so much per capita ; prior to the Act of 1898 the amount drawn was computed partly from the average monthly and partly from the quarterly attendance but since that Act the estimates have been made each month. For these same institutions with the excep- tions of the Orphan’s Home there have been specific annual appropri- ation for salaries of officers and other current expenses in addition to the per capita allowances for support. (0) Special Tax Levies. There has developed of late years a strong tendency towards the policy of apportioning special taxes or levies for the maintenance of particular institutions. The acquisition of a special levy by the University in 1896 gave the impetus to this movement. In 1897 and during the legislative session of 1898 it was suggested and to some extent advocated, by friends of the University that the proceeds of the state tax on Collateral Inheritances be set apart for the exclusive use of the University; the returns from this tax will now approx- imate $100,000 annually ; but no serious efforts were made to secure the grant. The apportionment of a special tax to the Univers- ity naturally aroused the authorities and friends of the other institu- tions to seek similar grants which as we have seen the College of Agriculture succeeded in securing in 1900. The Board of Control in their first report in 1899 (p 32) advocated a general levy for the main- tenance of the institutions of which they have charge ; it is urged, however, mainly, as a substitute for the numerous special county 36 levies which are now assessed for most of the charitable institutions which have lead to various undesirable results. (See Bulletin July, 1901 pp 338-9). But it is to be observed that later special levies are, as it were collections on account, namely, levies made for the pay- ment of bills rendered against the counties. These levies the Board of Control would do away with and provide for all institutional ex- penditures by means of one consolidated levy. The first instance of the resort to a special tax levy as the form of an appropriation for the maintennce of an institution was in 1866 when one eighth of a mill was included in the state rate for the Orphans Homes (there were then three). Ten years later Governor C. O. Carpenter in his last message advocated a “special levy of say one tenth or one fifteenth of a mill on a dollar as a permanent fund for the University. ’’ His reasons for urging this form of appropri- ations are interesting. “This levy would not at first produce so much as the usual special appropriations, but it would increase with the wealth of th^ state and with the growing demands of the institution. And above all it would enable the regents to conform their expenditures to a fixed income and relieve them from coming before each legislature in the unwel- come character of lobbyists. (Message 1876 p 15). Governor Carpenter’s anticipations have not been fully realized as we shall learn when considering the growth of permanent appropri- ations. Besides the desire for fixity and definiteness of income there may be discerned another reason in the advocacy of special levies for the educational institutions although for obvious reasons it is not much dwelt upon. A tax levy thus set apart is expressed in rates or per- centages of assessments and it is not so likely to attract popular attention and arouse discussion and opposition such as would perhaps result if the sum which it is expected the levy would realize is speci- fically appropriated. Considered from the standpoint of general public policy and of legislative control of the budgets the practice of apportioning special levies to particular institutions is of very doubtful advisability. The general objections will be given in a later connection when the duration of appropriations is dealt with. Here I shall refer only to certain administrative objections. The strong tendency to multiply special levies is already apparent. One institution and then another secures them. This encourages others to seek them. The pressure on the legislature on the part of representatives and friends of special interests becomes more and more persistent and effective as the years increase. The result is that the book keeping of the state and of the counties becomes loaded with a miscellaneous assortment of accounts that are perplexing, to say the least, and productive of much un- hecessary labor in accounting for the levies, receipts, delinquencies and disbursements of the several funds. At the present time county officials in addition to their work of accounting for a multitude of local levies are compelled to open 87 accounts with eight different levies for state institutions besides the general “ state levy” as it is called. With each of these several levies both state and county officials must differentiate, and so exhibit on their books, the receipts from the separate levies of successive years ; they must also show the amount of tax delinquent for each year to- gether with the amount of interest or penalty due on account of such delinquency. The levies for the charitable institutions are, as we have seen, not exactly like those for the educational institutions. They are assessed for the payment of bills rendered or that may be rendered by the institutions against the counties for expenses incident to the care oi their defective or dependent inhabitants. A county may collect a part or all of these accounts from the relatives of their residents in the institutions. Or it may raise the account by special levy and then collect as much from such relatives as can be collected. Besides this array of accounts the auditor of State and the county auditors and treasurers must open accounts with the several institu- tions that have claims against counties for clothing or transporting or keeping their insane or defective residents. With special levies for the educational institutions there is an additional cause of confusion in the limitation of these appropriations to $55,000 of each levy. When the returns from a levy exceed this amount, the excess is to be covered into the General Revenue Fund of the State. But the Auditor and Treasurer of State cannot deter- mine for one, two, or more years whether the levy will ultimately produce the maximum amount allowed the institutions because of delinquent taxes ; and where the levy does produce the first year the fuU amount available it is just as necessary thereafter to scrutinize the returns as to separate and apportion the excess payments to the various levies. Final adjustment of these accounts, even if the present levies are not renewed, will be impossible for several years after the expiration of the grants. It is perhaps superfluous to observe that such a net work of inter- locking levies and accounts ncakes the state bookkeeping a confusing undertaking and renders it next to impossible for the financial officers to furnish the Financial Committees of the legislature with clear and concise statements of such receipts when the budget estimates are up for discussion. The present system of appropriations by special levies with its manifest tendencies has nothing to commend it from an administrative point of view. It offends seriously against one of the chief canons of sound public finance that demands simplicity in the sources of supply and a system of accounting therefor that insures facility in the casting up of receipts and in the forecasting of future income. The condemnation of the existing system by the Board of Control, so far as it affects the institutions within their jurisdiction, is emphatic and unqualified. (See Report for 1899 pp 30-34). Their recommendation urging the entire abolution of the various special levies and the substitution of a single levy or the uniform provisions for all institutions out of the General Revenue fund of the state must needs meet with approval from all who hare had any praotloal ex- 38 perienoe with this phase of our state finances or who will investigate the practical workings of the present system of special levies. The general objections to all such special levies will be considered later in dealing with the policy of permanent condition of appropriations. In making anpropriations of revenue for institutions the legislature of Iowa has broadly speaking, pursued one of two courses with re- spect to specifications as to the manner in which funds granted shall be utilized or the uses to which they shall be devoted. They have been made either in gross, viz. in lump sums, with out detailed direc- tions respecting the manner and particulars of expenditure — (the main object is of course stated or known, but the statutes leaving wholly to the discretion of executive officers or governing Board the control of the outlay) or they have been drawn with many limitations as to the manner of expenditure and the particular purposes for which the money is to be expended>re specified. In the earlier fiscal periods institutional appropriations were very general in character. The application of the funds was left almost entirely to those in charge of an institution. The acts indicated the general object or purpose to be accomplished and money sufficient to attain it was appropriated. The character of the buildings to be constructed, the amounts to be expended for the various structures for heating, lighting, ventilation, drainage, were left to the discretion of the Boards or commissions immediately in charge of the institut- ions. The amounts „to be paid for salaries, rentals, apparatus, were likewise left to the discretion and judgment of governing boards for allotment. The salaries of the chief officers of some of the institu- tions were occasionally specified as at the Penitentiary but in gener- al they were not. In a short time the appropriations become more specific as to details. The exact amount to be expended on a partic- ular building, or on a roof of that building or for boiler room is set out. • Two explanations for this change in method of appropriation may be given : One that the reports of mis-use of appropriations at some of the institutions caused the legislature to make specific funds in order to secure stricter accounting, and the other is that the heads of the institutions and the trustees in their efforts to obtain liberal appropriations could secure more if they asked for divers small sums for specific purposes than if they asked for the aggregate amount to be expended at their discretion. Standing appropriations for support and current expenses, almost without exception have been made in gross without specifications as to apportionment. The salary, schedules, dietary and the various departments of an institution have received such allotments of the funds as those in charge determined to be proper. Extraordinary appropriations have been, as a rule, specific with respect to amounts to,be expended for particular objects. The legislative practice as re- gards the latter class, however, has been far from consistent. The Healey committee in their Report in 1898 call attention to the evils growing out of what they term “looseness” in drafting appropriation 39 acts. They show that the failure to limit the appropriations to specific purposes gave a latitude to the institution authorities that was not always properly used. (See Report pp 12 and 49. ) The appropriations for buildings at the two Educational institutions at Ames and Iowa City are given continuously for five years without specification of any kind. The Board of Control urges that the appropriations for all of the expenses of maintenance of all the institutions under its charge be consolidated into one general appropriation and that the Board be given power to apportion the funds among the institutions as the members deem best. (See Report 1899 p 32. ) The arguments for and against the policy of granting executive officers or Boards absolute discretion in the apportionment of funds under appropriations made in lump are of almost equal weight. It is no doubt true that we cannot secure efficiency and accountability in the conduct of the business of government unless we concentrate responsibility and allow those charged with it the largest latitude for the exercise of judgment. But financial experience of American states and cities just as certainly teaches that absolute power is dan- gerous. Too great discretion allowed in the disposition of public revenue tends to induce arbitrary use of such power and to encourage disregard of the public interests. The growth of constitutional gov- ernment has been characterized by the development of budgets in which expenditures have been more and more particularized in order to secure accountability for perversion or mismanagement of funds. The experience of Iowa clearly indicates the dangerous tendencies of unlimited discretion in expenditures for institutions. The fact that there exists now a remarkable popular confidence in the present Board of Control that its menbers will conserve all interests in their actions does not of itself justify a radical departure from our gen- eral practice of specializing funds so far as practicable. If the legis- lature scrutinized the expenditures for institutions more thorougnly and systematically than has heretofore been done the advisability of the change urged would be more pronounced, (3) LIMITATIONS AS TO DISBURSEMENTS. In providing for the needs of the state the legislature must see to it that revenues flow into the treasury in sufficient quantities to sup- ply the demands. In forcasting the condition of the treasury during the budget period and its ability to meet all demands, it is necessary to know the limitations in the appropriation acts as to the times for disbursements of the funds. Can those entitled to the appropriations demand them monthly, quarterly or semi annually? Or can the entire amount be drawn at once? But it is not merely in connection with successful management of the treasury that limitations representing disbursements of rev- enue under appropriations are important. It is a part of a sound fiscal policy that no money shall be paid out of the treasury to those superintending the expenditure of appropriations for public works or institutions until the funds are actually needed for the 40 carrying on of such work or institutions. For revenue to be drawn much prior to the time it is needed only to lie idle in the hands of officers or local authorities is undesirable for various reasons. Such a practice obviously increases the embarrassment of the treasury when funds are deficient and it tends to misuse of appropriations bec5ause private parties, especially local banks, are benefited by securing the custody of such idle funds. Up until the enactment of the law of 1898 creating the Board of Control there never was any system or uniformity in the statutory provisions regarding the times for disbursing the funds appropriated for institutions to the officers or commissions in charge. There was a general act passed in 1890 but there were so many exceptions made in subsequent acts and in practice so little attention was paid to its restrictions that it did not bring about uniformity in the matter of disbursements. The First General Assembly in 1847 in authorizing the bond issue for the penitentiary directed the Auditor of the School Fund to pay the agent appointed by the Assembly to look after the affairs of that institution |5000 on demand ; but the agent was limited so that he could not have more than that sum in his hands at any one time. (ch. 0. I. , 1 G. A. ). The act of 1853 creating the Blind Asylum at Iowa City stated no time or method for disbursing the funds, (oh. 26, 4 G.A. ) The act establishing the Deaf and Dumb institution at Iowa City simply directed the Treasurer of State to pay the appropriation ($5,000) over to the trustees (ch 87, 5 G. A. ) In 1855 it was provided that appropriations, thereafter, for the penitentiary should ba drawn by the warden semi-annually, — April 1, and October 1— -probably in ad- yance. (ch.*96,5 G. A.) But at the succeeding session the legisla- ture appropriated $20,000 and the whole amount was payable at “any time.” (ch. 46, 5G. A. Ex. Ses. ) Beginning with 1858 we obserye more restrictions placed about the disbursement of reyenues from the state treasury to meet appropria- tions. Thus the appropriations for the Insane Hospital at Mt. Pleasant could only be drawn upon “montftly estimates” of the amount required (ch 23, 7th G. A. ) ; those for the Penitentiary (ch 53 Ib. ) apd for the Uniyersity only “as needed.” Warrants could not be issued against appropriations for the Blind Asylum by the Auditor of State “except for expenditures actually incurred (oh 125, 7 G.A. ) The act proyiding for the Deaf and Dumb institution prohibits disburse- ments from the state treasury “ faster than is actually necessary for the maintenance” (ch 137, 7 G.A.) In 1860, howeyer, the appropriation for that institution was made payable quarterly “in advance” (ch 32, 8 G.A.) In the case of the Penitentiary the pay roll of the guards was paid monthly while the salaries of the warden, deputy, clerk and chaplain were paid quarterly (Revision of 1860 section 5190-93). In 1864 the appropriation for the Blind Asylum was drawable “only upon es- timates made monthly as the work progresses” (oh 55, 10 G. A.) The funds for the Deaf and Dumb institution were issuable quarterly (ch 64 Ib. ) and those for the Insane Hospital could only be drawn 41 “upon estimates made during the progress of the work. ” (ch 63, Ib. ) The trustees of the University could draw the appropriation allotted them when “required” with no limitation as to the amount (ch 73 Ib) The provisions regarding disbursements continued thus to vary up un- til 1898. In the construction of the Hospital at Independence the commis- sioners were permitted by the act of 1870 to draw the appropriation, “from time to time” in sums not exceeding 815,000 — a restriction not so restraining as was intended, (ch 130 13 G. A. ) An appropriation for the University of 835,000 for two years was made payable” one half an- nually.” (ch 36). In 1870 the treasurers of Insane Hospitals were auth- orized to draw from their per capita allowance “a sufficient amount from time to time for the purpose of defraying any deficiencies” that might occur in their management (ch 109, 13 G.A. ) In 1878 the draw- ings were made at the end of the quarters (ch 100, 17 G.A. ) and so continued up to 1896 when they were drawn “in advance.” (ch 56, 36 G. A. ) This change was urged on the ground that the institutions could save money if they could pay cash on large purchases. The Healey committee found that the local banks holding institution bal- ances obtained the chief benefit of the change in the time for distribu- tion. (see Report pp 7, 8, 10 and 14. ) This provision for payments “in advance” caused very material embarrassment to the state treasury in 1896 for there were crowded into that year five quarterly drawings. At the time the state was short of funds. There was a deficit on Jan- uary 1, 1897 of 8397,073 of which $107,831 represented the advance made the Hospitals. In order to prevent the embarrassment of the state treasury the leg- islature during the eighties and nineties was accustomed to distribute appropriations over the ensuing fiscal period limiting the amount to be drawn before certain dates. The institution authorities could draw say but one half or one fourth before the end of the first six months, another fourtn in the next six months and so on. In few cases did the acts specify what objects under the appropriation should be pushed forward where postponement was undesirable and what should be delayed where compliance with the limitations compelled discrimation (oh 93 and 107, 19 G. A., ch 113, 30 G. A. and ch 138, 36 G. A.) An appropriation of $47,000 for the University in 1876 was authorized drawn in “eight equal quarterly installments” “as the money in the state treasury will allow” (ch 168 16 G. A.) The re- striction sought by the latter clause was set aside by the Supreme Court and the Auditor was required to issue warrants regardless of the condition of the treasury (see State vs Snerman 46 lowa^Reports p 415. ) The endowment fund provided for the University in 1878 was is- suable only in the sums of $5,000 quarterly (ch 76, 17 G. A.) and the appropriation of $40,000 for buildings at the school for the Deaf and Dumb was restricted to $5,000 during the ensuing year, (ch 136 Ib. ) In 1894 the legislature sanctioned the resort to time warrants payable on or after April 15, 1895 in order to permit the immediate construction in 1894 of buildings at Olarinda, Glenwood, Ames, Iowa 42 Falls and Iowa City so that the treasury would not be embarrassed by the presentation of the warrants, (ch. 133, 140, 145, 148, and 152, 25 G. A. ) The lack of system in the disbursement of funds for the several in- stitutions and the tendency of boards to permit the funds to be drawn before they were needed evidently impressed the legislature in 1890 for an act was passed prohibiting the payment of any appropriation “until the same is needed for use within thirty days from the date of the requisition.” (ch, 31, 23 G. A.) But the General Assembly itself ignored its own enactment and the Healey committee in 1898 reported that ‘ ‘ This act has not been observed by many of the state institutions. ’ ’ (Report p 13. ) When the Board of (Control took charge of the institu- tions a complete change took place. All disbursements from the treasury for institutions are now made monthly. The heads of the institutions estimate the amount of their expenses for an ensuing month which is approved or modified by the Board. The expenditures are then made. When the bills are rendered they are forwarded to the Board and audited and the amount and the parties entitled to payment are certified to the Auditor and Treasurer of State by whom they are paid. (ch. 118 Acts 28 G. A. ) Under exist- ing law no money is paid out of the treasury for the eleemosynary, re- formatory and penal institutions except for goods or service actually obtained by the institutions. The operations of the state treasury have attained to regularity that never before characterized them. The financial officers of the state can much more readily forecast the con- dition of the treasury. (4) DURATION OF INSTITUTIONAL APPROPRIATIONS. There is not in Iowa, as is the case in some states, e. g. in Ohio, a constitutional limitation of the power of the legislature with re- gard to the duration of appropriations. The General Assembly can authorize expenditures for one year or for twenty years. Succeeding Assemblies could annul or materially modify such appropriations un- less the constitutional prohibition against the impairment of con- tracts that might be entered into in pursuance thereof should serve as a bar; but otherwise there is nothing to prevent the General Assembly making perpetual grants of funds from the state treasury. This is the view that the legislature of Iowa has always taken of its powers as the growth of what are known as “standing” or permanent appropri- ations indicates. As we shall see later the permanent expenditures have come to be the major portion of the budget. In the ordinary course of the state’s business and from the very ne- cessities of budget estimates, certain periods have become established within which appropriations begin and end and concerning the financial transactions occurring therein officers make reports. Some of these periods have been decreed by statute and some are due to custom. For the general expenses of the government, viz. the pay rolls of the executive and judiciary, the appropriation period is the biennium be- ginning with April 1 of the year of the le gislative session. Numerous 43 appropriations are annual, or rather, so much per annum. These may be reckoned from three different dates : From April 1 ; from July 4, if the act takes effect under the general law of the constitution ; or from October 1, if the appropriation was authorized by the code of 1897 which went into effect on that date. The reports of the financial officers of the state cover the biennial fiscal period ending June 30, preceeding the convening of the General Assembly. This variation in the periods covered by appropriations and by the reports of expenditures leads to serious confusion when the estimates are made for the legislature. The Auditor of State makes his general estimates for an ensuing biennium partly for the appropriation period ending March 31 when the assembly is in session and partly for the fiscal period ending: June 30, nine months prior to the former. The Board of Control make their estimates for the institutions for the regular fiscal period. Both the public and the legislature are likely to be confused when the budget is up for discussion as was illustrated very clearly in 1900. The committees on Ways and Means called on the state officers for their estimates of income and outgo for the next two years. The Auditor of State as was to be expected repeated the esti- mates of his report. The Treasurer of State covered the biennial fiscal period ending June 30, 1901. The Governor’s office took the two calender years 1900 and 1901. With such conflicting periods for esti- mates it is not strangre that legislative supervision of the budget is not very satisfactory. Nor is it strange if there is frequent failure to attain coincidence in the expenditures and income of the state treas- ury — resulting now in a deficit, now in a surplus. All appropriations are, with respect |to their duration, either per- manent or terminable. The latter expire either at a specified time or upon the fulfillment of certain conditions. The Standing appropriations by the terms of the acts authorizing them are permanent. Their provisions continue in force from year to year, from session to session of the law-making power without the recurring necessity of reenactment at each succeeding session as is the case generally with appropriations. If the legislature were to convene and adjourn without voting any appropriations whatever the Standing appropriations would remain in full force and effect. Thus the appropriations for support and salaries for the institutions under the Board of Control and the appropriations for the endowment or income of the educational institutions are permanent. With the exception of two classes, all standing and all extraordinary appropriations as well, are issuable upon funds collected by the state by taxation. The two classes excepted are : First, the aid received from the United States for the use of the Soldiers’ Home under the act of Congress, 1888 ; the amount depending upon the appropriations made by Iowa and the per capita attendance ; and the annual sum of |25, 000 >received from the national government under the Morrill act of 1890 for the promotion of instruction in Agricultural and Mechan- ical arts, which is expended at the institution at Ames. The second class consists of the proceeds of tne trust funds given the state for the 44 establishment of the University and of the Agricultural College — known as their Endowment Funds. The income derivable from the latter class of appropriations by the terms of the original congress- ional grants is permanently allotted and cannot be diverted by the state to other uses. Both of these classes of appropriations while a part of the state’s assets and to be considered in the biennial budget, constitute no drain on the state treasury as do all other appropriations. Extraordinary appropriations are almost always terminable either by specification or by the nature of the object sought to be attained by the act. Appropriations for the salaries of officers and clerks of the Executive and Judiciary and for their contingent or clerical expenses have been from the first year of the state limited to two years; — for thirty years and more this appropriation period has expired March 31 of the even numbered years when the General Assembly convenes. All appropriations for buildings, or improvements, unless otherwise limited, expire with the completion of the building in accordance with the provisions of the act. Such appropriations may continue in fotce for many years owing to various delays in carrying out the provisions. (A) INCREASE OF STANDING OR PERMANENT APPROPRIATIONS One of the most noteworthy developments in the history of the state finance of Iowa especially as regards the institutions of the state, is the growth of standing appropriations. In the earlier fiscal periods practically all appropriations were limited to the life of the Assembly authorizing the expenditure. Permanent appropriations were very rare prior to 1870. By the act of Feb. 25, 1847 the proceeds of the University endowment fund were turned over to the trustees as a permanent fund and by the act of Jan. 15, 1849 |500 was appropriated annually out of that fund for each of three normal schools. But these were appropriations of income from trust funds that did not extract revenue from the treasury or press on the purses of the tax payers. The first permanent appropriation of revenue was $50 per annum for Agricultural societies approved Feb. 15, 1851. The second was the specific appropriation of $2,000 per annum and the quarterly allowance of $35 for the support of pupils at the Blind Asylum passed Jan. 18, 1853. The same Assembly made an annual appropriation of $2,500 for the Geological Survey. In 1855 the state Agricultural Society was given annually $1,000. When the Historical Society was granted its first allowance in 1857 the act read “there is hereby annually appro- priated until the legislature shall by law otherwise direct, ’ ’ the sum of $500. In 1866 the Orphans’ Homes (there were then three) were provided for by means of a special tax levy of three eighths of a mill; the amount per inmate however was limited to $8.33. The institution for the Blind was given $5,000 per annum for “Ordinary expenses” and $40 per quarter for each pupil. Upon its removal to Council Bluffs the School for the Deaf and Dumb received a standing appro- priation of $8,000 per annum^for salaries and current expenses and $40 45 quarterly per pupil. In 1872 the Hospital for the Insane at Mt. Pleasant was given a standing appropriation of $20 per month for each public patient. The number and grand total of the standing appropriations gradually increased with the increase of the institu- tions and the continuance of the custom of permanent or standing appropriations. In recent years there has been a marked tendency to increase this class of appropriations for the educational institutions under the designation of “Income Funds.” The University has been especially favored in this respect. In 1878 it was granted |20,000, anually on this account; in 1884 |8, 000 was added; in 1890, $25,000 ; in 1896, 112,500; in 1898 $10,000; in 1900, $50,000; this gives the University an annual income, exclusive of all other extraordinary appropriations and tax levies, of $125,000. The College of Agriculture and Mechanic Arts was granted in 1894, $18,500 annually, for “repairs, general improve- ments and current expenditures’ and in “aid of the income fund.” The legislature added $25,000 to this fund in 1900. The code of 1897 provided an “Endowment Fund” for the Normal School of $17,500 per annum and a contingent fund of $3,000 annually. The legislature in 1898 increased these sums to $28,500 and to $9,000 respectively ; and in 1900 there was added to the “permanent support fund of the school $16,500 for payment of teachers and $5,000 for contingent expenses. The total annual fund available for Normal Schools now amounts to $49,000 exolasive of extraordinary or special appropriations. All of the institutions under the Board of Control have either specific annual appropriations or continuous per capita allowances for their support or maintenance. Some have one class of appropriations and some the other; some fiave both kinds of appropriations. The Insane Hospitals and the Reform Schools are given only maximum per capita ap- propriations. All of the other institutions under the Board received a per capita allovfance for support and a specific sum annually for sal- aries or current expenses. The total amount of these standing institu- tional appropriations was $3,022,100. on July 1901. The entire amount of permanent appropriations reported by the auditor on that date was $3,118,060 out of a total of $4,341,608 authorized at the time. Akin to and in addition to the standing appropriations are those where the amounts allowed are spread out or extended through a series of years. Thus in 1880 the Assembly made an appropriation for the Industrial School for Girls at Mitchellville of $20,000, one half of which was not to be paid until 1882 and the other half not until 1884. The first appropriations for the Hospital at Cherokee were similar; the one made in 1894 was available in installments of $50,000 per annum for four vears, and in addition the Act of 1896 made $25,000 available in 1896, $25,000 in 1897, $75,000 in 1898 and $75,000 in 1899. Of like character are the appropriations made for buildings at the University and at the College of Agriculture and Mechanic Arts in the form of special tax levies. They are given for a series of five years each. 46 (b) the policy of permanent appropriations. The increase of standing appropriations is a matter of serious con- cern. The practice means an abandonment of what has been and is the chief safeguard of democratic institutions. Modern constitution- al government rests upon the basic fact of control of the budget. But control of the budget is practicable, effective and complete only when there is alert interest in and keen discussion of the state’s expenditures at each legislative session when the grants of public funds are sought for and made. If the bulk of our revenues is disbursed year a^ter year without the propriety of its outlay ever coming before the legislature for review and discussion there can not thrive that active interest in, and conscious and searching examination of the budget accounts which alone assures the best and most economical outlays. If the beneficiaries of the state’s treasury are not compelled regularly not only to exhibit but to explain to the direct representatives of the taxpayers the amounts of their appropriations, the particular uses made of them, the benefits resulting and to demonstrate the necessities that justify a renewal of the appropriations there is likely to be en- gendered an indifference concerning such matters. Under the practice in Iowa it has come about that unless Boards of Trustees take special pride in pointing out the particular benefits or advantages of past appropriations the attention of the legislature is usually directed to and wholly absorbed by the new expenditures desired by institutions. Not the least significant fact about this development in the finance of Iowa is that it reverses the practice of the national governments of practically all modern democratic states. We set apart permanent appropriations for our institutions to the amount of nearly two thirds of our entire state budget while we provide for all the salary lists of the executive and judicial branches by biennial appropriations, all terminable March 81, the date of the expiration of the appropriation period. In the national budget of Great Britian and of our Federal Government the practice is the opposite. In England about a third of the expenditures are “permanent” and these relate to payments of principal and interest on the public debt, the civil list (viz. crown or court and the royalties) pensions, salaries, and allowances to certain independent officers, courts, etc. as to which there is no dispute or liklihood of dispute. All other appropriations are annual and termin- ate with the fiscal year and it requires a new vote to renew the grants. In general the same is true in the practice of our national government. All appropriations are construed as annual “unless a contrary intention is expressed in the act. ’ ’ There are a number of permanent appropriations but relativelv they constitute but a small part of our total national outlays. In France practically all ap- propriations are renewed annually.* In our national finance, as in the British budget, the grounds for permanent appropriations seem to be that the particular expenditures *See Adam’s Finance pp 153-162; and Bastable’s Public Finance (2nd Ed. ) pp 698-704. 47 are not matters for discussion, as for example the interest on the debt or the salaries of judges when once provided for, “where nothing is left to executive officers for examination or inquiry except to identify the party or to comply with some specific duty” under an act; and the legislature is interested, therefore, not in the particular items but in the aggregate amount that it has been, or will be, necessary to ex- pend. All appropriations for temporary purposes or for officers or undertakings as to which the policy of the state is not settled and opinions vary as to the advisability of outlays therefor, all such are provided for by annual grants of funds. The reasons urged in favor of permanent appropriations for an in- stitution may be summed up in one phrase : h’ixity or definiteness of in- come. Those in charge of an institution or of any undertaking requir- ing expenditures throughout a series of years, desire to know, and must needs know, what funds they can count upon so they can make the proper apportionment of their funds. The outlays must be made with due regard to the future needs as well as to present demands. Governor Jno. H. Gear in his first Inaugural address stated succinctly the argument for permanent appropriations in urging such provision for the state University. “Its revenues, ” said Gov. Gear, “are not equal to its requirements, and it is compelled to come before the general as- semoly at each session as a suppliant for pecuniary aid. The uncertainty of the amount of the appropriations at the hands of the General Assembly renders it impossible for the board of regents to make any definite and comprehensive plan that would under more favorable pecuniary conditions enable them year by year to develop the University to its largest degree of usefulness. A permanent ap- propriation of a certain sum annually — even if it be of small amount — would accomplish this object. ”(p 10) The legislature has adopted the policy urged by Governors Car- penter and Gear, not only for the University but for practically all of the state’s institutions; yet no one can say that their anticipations have been fulfilled.* There has been no lessening in the demands regularly pressed on the legislature by the friends of the University or of the other schools. Nor from the very nature of the case, is there likely to be any cessation or decrease of such demands. Anyone who has observed the development of schools, colleges and universities in late years will have noted the re- markable expansion that has taken place in their work and the in- creased demands made upon such institutions. It is improbable that these will lessen materially but rather will increase for many years *The following excerpts from two official papers relative to one of the state’s institutions are instructive: “The committee(of investi- gation) justly censure the practice of using funds of the state institu- tions for paying lobby representatives to secure legislative appropria- tions. ” Gov. Wm. Larrabee’s Message, 1890, p. 21. “In one instance at least a management employed members of the Board, at considerable expense to the state, to attend assembly sessions to prevent the state from enacting what was termed “hostile Legislation.” Healey investigating Committee Report, 1898, p 66, 48 to como ; and those in charge will be constantly appealing to the legis- lature for increased appropriations. But granting that we have reached the largest appropriations that will be asked for by our institutions it is very questionable whether the policy of relieving the authorities of our institutions from the necessity of coming before the legislature and explaining their work and needs in order to secure needed funds is wise or not. When this view is analysed it will be found that it subverts the true relation which institutions bear, or should bear, to the state and to the legislature which is responsible to the people for the conduct of the state’s business. Our state government is organized for the purpose of transacting the business that the people of the commonwealth deem necessary to be undertaken by the agents of the state. This business should be conducted in accordance with the best business practice. Now the legislature, which is the Board of Directors in charge of the people’s corporate business, can not properly discharge its duties or manage the state’s afPairs with success unless its members receive and can command regularly and at any time thoroughgoing and complete in- formation respecting the work and needs of the public service from the state’s agents. Our state institutions constitute a part of the state’s business. The authorites in charge are agents of the state in carrying out the policies determined upon by the legislature. They do not represent corporations independent of the states nor should they be so considered. As the heads of departments or divisions in the business of a railroad or large business corporation are expected to report annually to the Board of Managers or to the Directors as to the expenses of management and the results of policies pursued so should those at the^head of our institutions be expected to report and to set out the results of a period’s work so as to justify future outlays. Not to require those charged with the superintendence of outlays under appropriation acts not only to present at each legislative session the results of their expenditures but to explain them orally to the com- mittees as a necessary preliminary to the renewal, as well as the increase, of appropriations is unbusinesslike. No corporation can conduct its business successfully unless the Directors require the heads of divisions to keep them constantly well informed as to the nature of their operations and the reasons for pursuing the policies adopted. And it is the highest business wisdom to compel them to justify their course annually before they are given renewed authority to continue their expenditures. Failure to insist upon the personal responsibility of the heads of our institutions and their personal as- sistance to the appropriation committees at each session from which permanent appropriations relieve them is very unwise for many reasons, chief among which is that it tends to promote laxity in ad- ministration and laxity In appropriations. There is no serious pressure of legislative work in our General Assembly such as would justify Iowa’s radical departure from the traditional practice of Great Britain and the United States. The 49 greatest number of bills introduced in the House never exceeded 700 and in the Senate never above 500 in the entire history of the state. So that there is time enough for the most thorough going examination of the financial needs of the institutions. It will be said doubtless that as a matter of fact the legislature does not give the time and consideration to the institutions and their needs that should be given and furthermore it is not probable that there will be any marked improvement in these respects. Con- sequently the authorities and friends of the institutions are forced to secure as much as possible of their grants in permanent form so as to insure continuity of their work and policies. No one who is familiar with our legislative piocedure, the delays and annoyances, the polit- ical wire pulling and maneuvers, and the disagreeable conditions that frequently confront the authorties of our institutions can deny the force of this contention. But it must be conceded, on a moment’s reflection that to give up to this tendency and continue the policy and augment the number and aggregate of our permanent appropriations because of such legislative indifference and negligence we do not cor- rect this undesirable condition in our legislative practice. We simply increase the evils. We manifestly cannot create a sense of legislative responsibility respecting appropriations and encourage a sharp scrutiny of the state’s budget by taking away the very necessity for legislative consideration of our institutional expenditures. Our present policy in fact authorizes and sanctions indifference to such matters by the members of the legislature because the appropriations remain in force whether they pay any attention to them or not and unless the state treasury is em- barrassed for funds and there is some popular complaint about the amount of the expenditures we may rest reasonably sure that but little serious inspection will be made of the institution expenditures. It is only by the opposite course that the people can develop and maintain a proper sense of responsibility on the part of their repre- sentatives in the legislature for the use they make of their money contributed to the state. If all appropriations were known to terminate irrevocably at the conclusion of an appropriation period, coterminate practically with the life of the legislature, and it were necessary that each and all grants be renewed biennially the legislature would be compelled to devote more attention to the state’s outlays, and the real needs of the public service. The appropriation committees would inquire more particularly into the necessity for, or into the desirability of appropri- ations and the heads and trustees of institutions would be required to justify the use (o which had been put an appropriation previously made and to show sufficient cause for its continuance. This, it seems to the present writer, is simply tee common sense rule of ordinary business practice. Such is the policy of our Congress and of the British parliament with the bulk of the appropriations in their vast national budgets, compared with which Iowa’s biennial budget is but a bagatelle. The reversal of this traditional practice of Democratic 50 states here in Iowa has not been for the best. The 1 gislatnre deeds away its proper and its most important power and abdicates its most important function — that of constant control and supervision of the expenditures of the people’s money. The law of biology that disuse of functions induces atrophy and decay of muscular power and capacity is just as true in the affairs of government and finance. Another very important phase in the legislative practice in mak- ing permanent appropriations that should not be overlooked is the fact that the legislature in authorizing appropriations that continue beyond the term of its own existence usurps the perogatives of suc- ceeding assemblies. Under Iowa’s constitution each assembly, al- though limited in its powers by that instrument, is practically sov- ereign in its jurisdiction so far as concerns taxation and the appropri- ation of revenue. Permanent appropriations are within the power of any assembly. Yet so far as relates to the offices and departments of the civil service and the current support of the institutions of the state such permanent appropriations can be abrogated at any time by assemblies which follow. But it is not so clear that it is within the range of legislative powers to annul appropriations under which con- tracts have been entered into, say for buildings. Permanent appro- priations, therefore, besides being un tf^ise for reasons already given, trench very seriously upon the rights of the future assemblies. Even if in law they do not infringe the jurisdiction of succeeding legisla- tures they do in fact for they hamper and embarrass freedom of legis- lative action very decidedly. A permanent grant or an appropriation extended over several years, such as the special tax levies for the ed- ucational institutions, give the grantees or beneficiaries the color of a claim to a contract in pursuance of which they enter into agree- ments and undertake plans that they insist it would be unjust to dis- turb or render impossible. With the weight of this presumption thus in the favor of such appropriations subsequent legislatures are loath to disturb things so established or undertakings entered into. Hence the desire of those concerned to secure permanent grants : and hence the undesirability of such a financial practice from the standpoint of legislative and popular control of the state’s expenditures. The growth of this practice in Iowa’s finance has not taken place without some objection. For more than a decade prior to 1878 a permanent and fixed annual appropriation was strenuously urged on behalf of the University but the legislature was averse.* When opposition was overcome in 1878 a minority of the Senate committee on Appropriations declared pointedly that the institution had “no such prior claim upon the funds of the state, as to entitle it to a first lien upon the treasury for all future time, and it is neither wise nor necessary for this General Assembly to bind the people of the state to pay an annual sum to this institution regardless of its necessities, and of tne ability of the state to contribute to its support, *See in particular the discussion in the House in 1870, for instance the remarks of Messrs Mills, Teale and Cutts, March 1, as reported in the Legislative Supplement of the Des Moines Bulletin, No. 25. 51 and such action would be a departure from the settled policy of the state.” (S. J. p 392.) The objections to special tax levies seem to have been deemed more important ; for although this form of appro- priation was urged for the University as early as 1866, it was not until thirty years later that a special tax was authorized. Respecting this policy the Report of the Investigating Committee in 1898 expresses disapproval in explicit terms. “The precedent of creating tax levies for state institutions” it says, “should not be followed, as it gives, under present managements and conditions, a discretion in expenditures that detracts too much from legislative powers and functions. The precedent of one legislature making appropriations for a period longer than two years and which are to be expended after the succeeding legislature convenes, cannot meet the sanction of him who is cognizant of the uncertainties, dan- gers, and abuses of thus anticipating the needs and revenues of the future by indirectly effecting the legislation of another general assembly.” (pp 67-68. ) (6) THE DISPOSAL OF UNEXPENDED BALANCES. One of the vexed questions in public finance, or rather one of the perplexing problems in the actual financial practice of states, is the disposal of unexpended or unused balances of appropriations. The legislature cannot always forsee the exact amount of money that will be necessary to accomplish a particular purpose. The appropriations in the majority of cases are necessarily based on estimates that ap- proximate the actual amount required. When the object sought is attained there may be something left over. There immediately arises the question with the financial officers of the state , what shall be done with this remnant, so to speak. Shall such unexpended appropriations be turned back into the treasury, or be charged off the Auditor’s and Treasurer’s books as no longer available? Or shall this balance continue to be a part of the available funds of an institution or department? Again if a fund is not used at all within a reasonable time, say two years after the expiration of the life of the legislature authorizing it, or is only partially used, shall those entitled to the appropriation be permitted to draw on the fund until it is exhausted regardless of the lapse of time? In other words shall the bookkeeping of the state be cumbered with a large and constantly increasing assortment of odds and ends of unexpended balances of appropriations with the host of varying an- noyances and controversies which they inevitably engender or shall there be a definite and stated appropriation period at the expiration of which all unexpended appropriations lapse the balances to be charged off and new grants made necessary if the same are deemed essential to the public service? These questions will doubtless appear to many to involve nothing more than mere technical problems in the routine of the state’s book- keeping and of no particular consequence, therefore, in the matter of legislative control and supervision of the budget. The contrary, how- 52 ever, is true. Of but little less importance, so far as relates to popu- lar control of public expenditures, is this matter of the disposal of unexpended balances. The practice in the finance of Iowa as regards them has been variable, and not always in accordance with the sound principles of safe finance. During the first twenty years of the state’s history the appropri- ation acts in but few instances recognized the possibility that there might be a portion of the funds that would not be needed. They were all specific, irrevocable and unconditional grants. In the Omnibus appropriation act of 1851 a paragraph granting $1,000 for the Peni- tentiary contained the clause “or so much as may be needed for such purposes.’’ (ch. XCI. ) But prior to 1860 there is no other similar provision affecting institutional appropriations. In 1860 the appro- priation for the Blind Asylum at Vinton contains such a clause (ch. 89. ) From that time forward the occurence of this limitation be- comes more frequent until the words “or so much thereof as may be necessary’’ are almost invariably present in the acts. In the appropriation for the penitentiary in 1864 the legislature not only recognized the probability of a surplus or balance that wculd be unused but authorized that “said surplus may be used for the completion of any one “or all’’ of the items mentioned in the act. (ch. 71) A similar provision was contained in the appropriation for the Agricultural College in 1868, a surplus under any clause giving a grant could be utilized to make up a deficiency in any other grant (ch. 81). From 1870 forward the appropriations for the Hospital at Mt. Pleasant contained such provisions very frequently (see ch. 96, 1870, ch. 126, 1876, ch. 86, 1882, and ch. 108, 1884) and now and then in the appropriations for other institutions. In the first report of the Board of Control it is urged that the Board be given general author- ity to expend unused balances for any purpose deemed necessary for an institution (p 84) and their recommendation was incorporated in the Act of 1900 making provision for the extraordinary expenditures for the institution under their jurisdiction, (ch. 150). It was not until 1876 in the general appropriation for salaries and clerical expenses of the state officers that the disposal of undrawn balances of appropriations by charging them off the books of the Auditor and Treasurer of State, or as the phrase is “covered back into the treasury” was formally required by law. (ch. 142, 1876.) But it is very likely that the enactment simply gave legal sanction to what had been the custom of the state accounting officers for years prior thereto. In 1882 in an appropriation for the Blind Asylum it was the .first time formally ordered that any undrawn or unused balances should be turned back into the treasury. (Laws ch. 6.) But aside from this one instance there appears to have been no definite provision concerning the disposal of undrawn or unused balances of institutional appropriations prior to the Act of 1900 to be discussed later. From the very nature of the case notwithstanding the subject of unused balanoes was unnoticed in the statutes it protruded itself persistently in the practical financial operations of the state. Nearly all of the support funds of the institutions were limited to certain amounts per capita per month or quarter “or so much thereof as may be necessary.” For the most part both heads of institutions and the Auditor of State regarded these as annual rather t)mn monthly or quarterly appropriations, (see Attorney Generals Opinions 1899 p 83)and the Auditor was accustomed to charge off his book all amounts undrawn at the end of the general biennial appropriation period viz : March 31 of the years of the legislative session, although there was no specific warrant of law for his so doing. Controversies now and then arose but the institution authorities soon got into the habit of drawing out the entire amount allowable per quarter so that there would be little or no balance to charge off. (See Report of Healey Committee 1898 p 13) The most annoying differences would arise over the balances of specific, extraordinary appropriations that continued partially undrawn for years, the amounts being carried by the Audi- tor until he Would conclude that there would be no call for it and charge the amount off only to have some one years afterwards come forward with a peremptory demand lor the appropriation. When the Code of 1897 took effect and again when the Board of Control Act became operative there ensued several disagreements tha exhibited the perplexities attendant upon the disposition of unex pended balances when the law fails to give clear directions. Under the new Code, in force October 1, 1897, it was held by the Attorney General that undrawn appropriations limited to “so much thereof as was necessary” for the Agricultural College lapsed on that date, the Code creating a new annual appropriation period beginning with that date. (Opinion of Atty. Gen. 1898 p 369). The next legis- lature reappropriated the balances (ch. 164, 1898.) An extremely ani- mated controversy arose between the Secretary of the University and the Auditor over the latter’s refusal to allow the undrawn balance to be disbursed following the Attorney General’s ruling in the former case (see Brief, Nov. 1. 1900, and Notes of the Secretary of the Uni- versity April 29, 1901. ) Much, perhaps all of the controversy in all of these instances was due to the simple oversight in making provision for the transition to the new Code and not probably to any intention to cut off the institutions affected bv the recodification. When the Board of Control Act became operative July 1, 1898 there was a radical change in the method of disbursing funds. All funds or balances thereof in the hands of the local treasurers were transferr- ed to the Treasurer of State at Des Moines who thereafter acted as the treasurer for all of the institutions under the Board. The question of the disposal of balances Immediately protruded itself. The situ- ation was complicated by the fact that while the Treasurer of State acted in a aual capacitv the former appropriations for support contin- ued unchanged and disbursements thereof occurred monthly subsequent to the auditing of institution bills and not prior as was formerly the case with most of the institutions. As Treasurer of the Institutions 54 he was subject to the directions of the Board but before he could comply he had as Treasurer of State to pass upon or rather to deter- mine, whether he would honor warrants of the Auditor drawn to meet the bills certified to by the Board. At the outset it was assumed that the appropriations for support, although they were each to be reckoned upon the average monthly or quarterly attendance at the institutions were in effect annual appro- priations. The Board of Control took the fiscal year beginning July 1, 1898 when its responsibility began, as the annual period. The Auditor’s office took the year beginning with the Code, Oct. 1, 1897. The Treasurer inclined to the former, at least so made the entries in his books. At the close of the fiscal biennum ending June 30, 1899 there were undrawn balances in the support funds asrgregating |119, 384.69, (see Treasurers Report, 1899 p LXIV) due to the efficient and economical administration of the Board in the purchase and use of supplies. As all of the support funds were appropriable only to such an extent as were “necessary” the Treasurer began in due course to charge off such balances ; but he soon learned that the Board of Con- trol had not done so and furthermore did not concede such disposal to be proper or permissible. It was also shown that the College for the Blind at Vinton and the School for the Deaf and Dumb at Council Bluffs would be subject to serious and incalculable embarrassment if he refused to honor warrants drawn on such balances as the Board had to the credit of those institutions. The Auditor’s office agreed with the Treasurer although no balances had actually been charged off by him. The Treasurer appealed to the Attorney General for a ruling so that the books of the three departments could be harmonized but before this was rendered the legislature convened. The Treasurer notified the Board that while he held the law to be clear and that, even if there was no express warrant for charging off the balances, they were nevertheless unavailable for the institution, he woul4 on his own financial responsibility honor warrants on such balances until the adjournment of the Assembly in the hope that the legislature would either reappropriate the balances or otherwise make permanent provision respecting the duties of the accounting officers respecting their disposal. A bill was drawn by a member of the Board giving it complete control over balances and introduced. Late in the session the writer at the suggestion of the chainnan of the Senate commitree on Appropriations, drafted a bill nroviding for a general appropriation period of two years, giving all boards or insti- tutional authorities absolute power over all balances during such period, but requiring that all balances unexpended at its conclusion March 31, should be charged off subject to unpaid bills due but not present at the time. For specific extraordinary appropriations two years additional were given. Owing to the lateness of the session and the opposition of the Board of Control the bill was not formally presented or pressed for consideration although its principle and plan were quite generally approved by members with whom it was can„ vassed.* The present law was passed giving the Board of Control unlimited and perpetual power over the disposal of unexpended balances. (Oh. 3 ) This matter has been presented in such detail in order that the nature of the problem may be fuLly appreciated and the significance of the question realized. For, in the writer’s opinion the practice in Iowa has not conformed with the best financial policy and the law of 1900 giving away perpetual control of the balances to our great ad- ministrative board is not merely unwise, it is a dangerous departure from the true course of constitutional government and democratic control of public expenditares. Various investigations prior to"^1898 in nearly each case developed the fact that the authorities of the institutions were far from scrupu- lous in the use of funds for purposes other than those specified by law and they were not averse to using balances for any purpose deemed urgent. The practice was productive of many evils not the least of which was disrespect for legislative directions as to the purposes and plans for the expenditure of public funds, and it must be obvious that such was necessarily the result of such a practice. Now while we make it legal and proper lo thus use balances do we act wisely in giving officials absolute and perpetual power to dispose of the balances as they may see fit? It seems to me very questionable. We must not let the brilliant success of our Board of Control and the present widespread confidence of the people in the ability and integrity of the Board blind us to the dangers that result from placing all sorts of power in the hands of administrative agents with little or no restric- tion thereon. Those representing the institutions will contend that to cut off all balances of the support funds at the end of a biennial period would not encourage economy, that it would not permit them to fol- low their present method of expending only so much each month as is actually needed, but would rather induce unnecessary or more generous outlays. Further they contend strenuously that the institu- tions might be embarrassed in the first months of the ensuing period *The data upon which the above sketch, so far as it relates to the disposition of unexpended balances under the present statutes, is based, consists of the letter of the Treasurer of State, Mr. John Herriott, to the Attorney General Mr. Milton Remley under date of Dec. 22, 1899, the letter of the Board of Control, by Judge L. G. Kinne,to the Treasurer of State, dated Feb. 17, 1900, the letter of the Treasurer of State to the Board of Control, dated Feb. 19. the draft of the Bill referred to in the text, and the letter of the Board of Con- trol by .Judge Kinue, dated March 20, 1900, to Hon, Warren Garst, the Chairman of the Senate Committee on Appropriations. None of the foregoing have ever appeared in print. It was not for a year and a half afterwards wliile pursuing his investigations in the writing of this study that the writer discov- ed that the provisions which he had included in the bill referred to above were enacted into law by Congress in 1870 and in 1874 and now govern the Treasury Departments. See Holies Financial History of the United States, 1861-1865, pp 528-513. 56 if prices should suddenly go up or by reason of some unforseen con- tingeny the supplies of an institution should be cut off. The first objection, it seems to me, is without substance. Two years of complete control over balances allows ample time for the exercise of wise discretion and economy in the expenditure of funds. If authorities can not or will not be as economical as possible or to state it differently, keep down expenses to the lowest level compat- ible with efficiency in a period of two years, they can not or will not be so if they are given a longer or unlimited control over the disposal of balances. The second objection fails to consider, (1) that for two years in- stitutional authorities can only use up to the limit of their maxi- mum allowance for support and no more, and they can draw all of this at any time:(2) that if on account of failure of crops or of a sudden rise in prices there is a prospect of a shortage of supplies in the first months following the termination of the appropriation period they can make larger purchases in anticipation of such a contingency in the closing month of the expiring period: (3) that the legislature is in session at the time and if the prospective embarrassment is brought to the attention of that body provision can be made for meeting it: and (4) that the Code provides (sec. 186) for the incurring of an indebtedness by the authorities of our institutions when the support funds are insufficient and the inmates are in immanent danger of suffering in consequence. It is not possible under the plan here urged for the institutions to suffer any embarrassment to which they are not subjected under our present method of unlimited adminis- trative control of unused balances. With respect to balances of extraordinary appropriations, if not used within four years from the date available, they ought on gener- al principles to be charged oft* the books of the state. The legislature should not for reasons apparent, sanction appropriations the need for which is not immediate, that is within at least two years. Circum- stances may interfere so as to render impracticable or unwise their expenditure but if four years elapse before use is made of the grant it is manifest that the appropriation should not have been made. Where they are charged off and the object is deemed important or urgent they can easily be re-appropriated. But it is assuredly not conducive to careful a,ppropriations and lucid budget estimates to let balances of useless funds pile up to the obstruction of clear statements and the confusion of the members of the legislature not familiar with previous legislation. There should be the same clear cut periods and sharp seperation of the appropriations of such periods in dealing with the state’s finance that prevail in the financial practice of our great industrial corpora- tions. The state’s business and bookeeping should be brought square to a base line, so to speak, every year or so, and a fresh start and a new balance sheet taken so that all concerned, the administration and the tax paying public as well as the legislature, may know exactly the precise condition of all funds and the prospects for income and outgo 57 or the period taken, and this is not assured when the legisalture permits balances to cumber the state’s ledgers year in an year out. Under most, if not all, constitutional governments except the Ameri- can states the fiscal period is only for one year*. The books are closed, the balances in due course are charged otf, and if needed again they are reappropriated. This is the practice of our national government and of the governments of Great Britain and France. As was pointed out in discussing the advisability of permanent ppropriations the legsilature should review thoroughly and in detail the state’s expenditures at each regular legislative session. It should know not only what has been spent but exactly what may thereafter be expended under existing appropriations. Now there is nothing that is so likely to be over looked, or if noticed their import- ance underrated, as unexpended balances. The estimates may be seriously perverted by their presence. If they are reckoned as prob- able expenditures and are not drawn for a great length of time they may bring about a large surplus in the treasury. On the other hand if they are not included in the estimates the treasury may be embarrassed by demands for their disbursement at times when fund are low. But of more importance is the fact that the legislature in giving over such permanent control to administrative officers increases the op- portunity for laxity in making appropriations. When we permit a board to use an unexpended balance for another purpose or object we in effect increase the appropriation for the second object or we may make a new one outright. It may happen, as it has frequently in our congressional finance, that the legislature will be under the im- pression that a grant is only for a certian sum as set out in a proposed act when in fact there may be two or three times the amount author- izzed because sundry miscelaneous balances may be bunched and also used for the furtherance of the same object. Such elasticity in leg- slative provisions does not encourage legislative responsibility for expenditures or secure greater administrative care and accounability in the application of public funds. The experience of American states has very generally tended to biennial fiscal periods as well as biennial legislative and administra- tive terms, and it is generally conceded that under present conditions and tendencies biennial sessions of the legislature are preferable to annual. *Speaking of the length of fiscal periods Professor Bastable uses the following language : “Some of the smaller German States have biennial or even (as in Hesse) triennial budgets, an ire possible system in any country with active constitutional life, and one which will be adandoned as the popular element becomes stronger. ’ ’ ) I .S.