STATE AND MUNICIPAL FINANCE
( THE STATE
It is not yet 60 years since Iceland achieved financial independence.
By Law of January 2nd 1871 the finances of Iceland were separated
from those of Denmark. It was not, however, till three years later,
or by the constitution of 1874, that Althingi was granted control of
the Icelandic finances, and the first budget (for the financial year
1876) framed and passed by that body dates from 1875. Up to that
vear the management of the finances of Iceland had been in the hands
of the Danish government.
When the finances of Iceland were separated from those of Den-
mark, that country agreed to pay to Iceland an annual grant to be
reduced by a fixed yearly amount until it had come down to 60000
krénur, at which figure it should remain. This grant was looked upon
as a repayment of Icelandic moneys which in course of time had been
swept into the royal treasury. In 1918, when Iceland was acknow-
ledged as an independent State, this grant was discontinued, and Ice-
Jand undertook to pay her share of the Civil List. At the same time
2 million krénur were paid out of the Danish treasury once for all
and made into 2 separate Funds of 1 million krénur each, one man-
aged by the University of Reykjavik, the other by the University of
Copenhagen. The object of both Funds is the same: viz. to further
the intellectual intercourse between Denmark and Iceland; to promote
Icelandic research and science: and to support Icelandic students.’
REVENUE AND EXPENDITURE
The following table shows the distribution of revenue and ex-
penditure: