The Feb. 24, 1907 NYT reports that the 59th Congress (1907-1908) will spend a little more than $1 billion per year - the most to date. In 1907 the economy was estiamted to be approximately $34b, and the federal government was spending approximately 3% of the economy per year. The per-capita cost of the federal government was approximately $12.50 ($268 in 2005 dollars), whereas in 1879-1880 the cost per capita was $7. Today, the per-capita cost for the federal government it is approaching $10,000 (ouch) and federal government spending amounts to appproximately 20% of the nation's economy.

What's driving the run-up in costs in 1907? The military. The largest increase in appropriations was for the navy: in 1897 the navy was appropriated $30m, in 1907 the total was $102m. The story offers that spending on the navy in 1907 was $20m more than the spending during the Spanish-American War of 1898-1899. The largest proportional increase in spending was for fortifications ($24m over two years).

The article does have this to say about the increases in government spending:

If the wealth of the country, rather than its population, is considered, the cost of Government is now at a much less figure on $1,000 per capita [of national income] than ever before in the history of the Republic. The fact that big Congressional appropriations are no longer political issues shows that the people care little for economy in administration so long as there is general prosperity. At the close of each Congress the minority seeks to show that there have been great extravagances in appropriations. The presentation made by the ranking Democrat of the Appropriations Committee receives space in the newspapers, but seldom attracts more than one editorial paragraph in the way of comment. [emphasis added]

I like the use of the word "Republic" - we don't see enough of that word these days.

Note: The Republicans held the majority after the 1906 elections.