that the cities are handicapped in raising sufficient revenue to meet their expenses. The purpose of such restrictions is to prevent extravagance and wastefulness, and the history of many of our cities proves that they have, in general, served a good purpose. _Sources of Municipal Taxation._--The principal source of income for city, as for state and county, purposes is the general property tax, though cities are usually allowed to levy a great variety of other taxes, such as taxes on certain trades and businesses. Street peddlers are in many cases required to pay license fees. Before the liquor traffic was prohibited, many cities derived a large portion of their income from license taxes on saloons. Some cities receive a considerable income from franchises granted to public corporations. Thus Chicago receives a large percentage of the earnings of some of the street railways, the amount aggregating more than $1,500,000 a year. In many cities the expense of public improvements, particularly street paving and the laying of sidewalks, is met by what are called "special assessments," that is, assessments laid upon the owners of the property benefited, in proportion to the benefits received from the improvement. _Municipal Expenditures._--Appropriations are in most cities made by the city council subject to certain rules and restrictions prescribed by state law. In New York city, however, the budget is prepared by a board of estimate and apportionment composed of a few high city officers, and in a few other cities the preparation of the budget is intrusted to other authorities than the city council. To secure accuracy and honesty in the expenditure of city funds, provision is commonly made for auditing the accounts of financial officials, and in a few states like Ohio, Indiana, and Iowa, provision is made by law for state inspection and audit of municipal accounts by state examiners. This plan has proved very effective. In one state, these inspectors found that municipal officials had misappropriated more than $500,000, over half of which was recovered and turned into the proper treasuries. In a number of cities where the commission form of government has been adopted provision is made for monthly financial statements which must be published in the local newspapers, and for annual examinations of city accounts by expert accountants.