in the primitive or frontier civilization of America crystallized around the county courthouse. As the years passed it was local governmental problems which most intimatety concerned the life of the people. And today with all the expansion which has come in state and Federal governmental service, the counties, towns and other local units are performing a multitude of services, exerting a tremendous power, and imposing an ever-increasing burden of taxation. The local unit has shrunk relatively in size and importance, but it has not as a rule shrunk in the multiplicity of its activity or in the volume of spending. For the past dozen years local units have joined in the general tendency of the Federal and state government in expanding expenditures more rapidly than their capacity to pay.
The total annual cost of local government throughout the Nation increased from about $3,000,000,000 at the end of the World War to about $7,000,000,000 last year. Under actual conditions the cost of local government today cannot be met in many units of the State. The reason is simple. Within three years the income of the Nation has fallen from $90,000,000,000, to less than $50,000,000,000, but the cost of local government had declined hardly at all.
How have these local units--counties, states, towns, districts--been able to maintain this unprecedented level of expenditure in the face of diminished resources with which to pay? The answer is one of the tragedies of local government--borrowed money. Local governments have not only anticipated the future, they have spent it. The second answer is that local governments began to be weaned away from the primitive concept of government and began to lean upon the bigger reservoir--the state. State aid for local roads, state aid for public schools, state aid for public health are but three of the more important fields in which local sup-