Its resources are in small part derived from fees for special services rendered to individuals of the community. Such are fees for registration of deeds and mortgages, and of the same nature, though for convenience of collection paid in a different way, is the revenue from sale of postage stamps and stamped envelopes. Revenue may come from pay for certain special privileges or franchises established by license or patent. These are supposed to be not so much in payment for special service as for sharing in responsibility and cost of protection. Another source of revenue is in the shape of money penalty, or fine, for minor trespasses upon good order. Such revenues are accidental, and diminish as the government becomes more perfect. Under peculiar circumstances of opposition by citizens or bodies of citizens to the general order, government confiscates property used in such opposition. A good illustration of this is connected with smuggling, where the introducer of foreign goods opposes government in its revenue laws by fraud or violence, and suffers the confiscation of goods so introduced.
None of the foregoing sources of revenue, unless it be the license, and this is sometimes a mere method of taxation, can serve to any great extent the purposes of government. All government expenditures for general welfare must finally be met by some system of distributing the burden over all the people. This method of distribution is called taxation. The principal revenue is raised by taxation of possessors and producers of wealth, in anticipation of current public needs.
If for any reason government expenditures exceed its revenues, the government, like any individual, becomes a borrower. It may borrow by contract to pay at some future time for construction of buildings or machinery, or by issue of scrip in the shape of promises to pay at some definite or indefinite time in the future, or more distinctly still by sale of bonds, which are definite certificates of indebtedness, negotiated like the notes of individuals in great banking centers. Yet all of these are only methods of postponing the taxation which must support the government in its necessary machinery. Government can live upon credit in the same way, and only in the same way, that individuals can. The economic reasons for such credit must be the same as in individual experience.