(1) Receipts from industrial sources in the broad sense include all rents from wealth owned, interest on loans made, and proceeds of sales from enterprises conducted, by the government.  In feudal times, these were mostly obtained in the form of rents from the private domains of kings and nobles.  In many early and medieval states these sources of receipts were adequate to the need of government; then they decreased in many countries, both relatively and absolutely, because of the sale of publicly owned wealth (lands and mines) and with the recent extension of the functions of government have again increased very rapidly.  Now industrial revenues come not only from the rents of forests, mines, docks, lands, and buildings, but from profits in the operation of industrial enterprises such as waterworks, railways, mines, and factories, and from interest on funds deposited in banks or otherwise invested.  At present the industrial revenues of the aggregate governments of the United States (national, state, and municipal) amount to about a fifth of all revenue receipts.  Since the middle of the nineteenth century the number and variety of the industrial enterprises undertaken by governments has been steadily increasing, and this increase has been most marked in the cities.  The change in this respect in the United States, great as it has been, has been proceeding more slowly than in the European countries.

In 1913 the receipts of this nature (earnings of departments and of public service enterprises) were nearly $500,000,000.  The larger part of this sum comes to the national government ($288,000,000), mostly from the post-office department.  Most of the remainder comes to the minor divisions ($176,000,000), and but little to the states.  The total “earnings” (this means here receipts, not profits) of public service enterprises in incorporated places were $120,000,000.

Sec. 6. #Governmental receipts from loans.# The funds to invest in these commercial undertakings are originally obtained in nearly all cases from public loans.  Almost every unit or division of government may become a borrower to provide for its citizens at once certain needed advantages and improvements when the funds are not at hand and immediate taxation is deemed too heavy a burden.[2]

The indebtedness (less funds available for payment of debt) of the aggregate governments of the United States in 1913 was: 

Nation  .................................  $1,028,000,000
States  .................................     346,000,000
Minor divisions .........................   3,476,000,000
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Total   .................................. $4,850,000,000

The larger part of nearly every national debt has been incurred for purposes of war and preparation for war, while nearly all public debt other than national has been created for the purpose of peaceful social and industrial development.  The debts of the American states have partly been made necessary to meet deficits