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: