We will illustrate this principle in a few of its applications: ACCOUNTING The accounting system of any organization, public or private, is useful in proportion to the definiteness of its analyses or classifications, according to what is most important to be known. Thus, in New York State, the statutes authorize boards of supervisors to allow claims on the basis: (1) of specific amounts imposed by state law, such as the stated salaries of judges, (2) of amounts fixed by the board of supervisors under authority of law. In at least one county (Westchester) it was formerly the custom to lump a great variety of claims under the second heading--under the title “county audited bills”--a procedure which was satisfactory enough perhaps, if to know the _authority_ for payment were the only information desired. By such a system it was impossible to tell the cost of running any county office or department without actually tracing each voucher back to its source. Thus, it was found that, in the year 1907 the budget authorization for the superintendent of the poor was $17,485.61, while the expenditures shown by the treasurer’s report were $108,906.58 and the actual cost of the office, when proper additions were made from the “county audited bills,” was $118,464.33. Discrepancies of an equally serious nature were revealed in the case of most of the other offices. The accounting system through its inexact classifications gave information which was useful in protecting the treasurer but which was practically without value as a description of what the county’s departments were doing and how economically they were doing it. Exact classification is also essential to the last degree in the making of the budget, to the end that actual experience in the way of revenues received and funds disbursed may be made the reliable basis of future activities. In a well-ordered system of state supervision of local accounts the classifications will be made by a state official who will have the power to enforce compliance upon the part of the fiscal officer in each county. So that in time each county will have the inestimable advantage of being able to compare its finances with those of other similar units. A proper accounting system will proceed so far in its analysis as to provide a large amount of data concerning the cost of _units_ of service rendered and materials consumed. Among other things, it will reveal at any and all times precisely what is the condition of the county’s assets both in the shape of funds and of investments; it will show how much the county actually owes and is to owe at any future date. THE BUDGET