Kinds. Amounts in circulation, Nov. 1, 1910.

1. United States notes $341,000,000 2. Gold certificates 836,000,000 3. Silver certificates 483,000,000 4. National bank notes 706,000,000 5. Treasury notes of 1890 3,500,000

The History of United States Notes.--United States notes, or "greenbacks," as they are commonly called, originated during the Civil War. When the government was without specie (i.e., gold and silver money) with which to purchase supplies for the army and pay other expenses, it issued these notes. Each note says on its face, "The United States will pay to bearer $----." Since no time was set for the fulfillment of this promise, and since there was neither gold nor silver in the Treasury with which to redeem the notes, people would naturally hesitate to accept them in payment for goods or salaries. Consequently, Congress made the notes "legal tender";[28] that is, the law compelled creditors to receive this kind of money in payment for debts. The notes pa.s.sed into circulation, therefore, because people were forced to take them; but their value depreciated greatly during the war. In 1879 the government began the redemption of the notes in specie, and since that time they have been worth their face value.

[Footnote 28: Our full legal-tender coins at present are the gold coins, silver dollars, United States notes, and Treasury notes of 1890.

Subsidiary silver coins are legal tender in amounts not greater than $10.00, and the minor coins are legal tender to the amount of twenty-five cents.]

Gold and Silver Certificates.--It is much more convenient to handle paper money than coins. When a person deposits gold or silver coin in the Treasury, he may receive these certificates in exchange.

Consequently, the value of these certificates in circulation represents an equal amount of gold coin and silver dollars stored in the United States Treasury and ready for exchange for the certificates at any time.

National Bank Notes.--The fourth kind of paper money is issued by National banks. These are organized under United States law and subject to control by an officer of the Treasury Department. Like banks that are organized under State law, National banks conduct the ordinary banking operations. That is, they receive deposits, loan money, and buy and sell drafts in the ordinary course of business. In addition, these banks are given the right "to issue notes." In doing this, the bank first buys on the market a certain amount of United States bonds; these it sends to the Treasury at Washington and leaves there on deposit. The bank will then receive from the Treasury "National bank notes" equal in amount to the face value of the bonds deposited. These notes say that "The National Bank of ---- will pay the bearer $----, on demand." Now, the bank may fail, i.e., it may not be able to pay what it owes to its depositors and other creditors. But the holders of National bank notes will not suffer loss. For the Treasury will sell the bonds and thus obtain cash with which it can redeem the notes held by individuals.

The amount of Treasury notes of 1890 is comparatively small, and this kind of money is destined to disappear within a few years.

SUPPLEMENTARY QUESTIONS AND REFERENCES.

1. The tariff schedule in force at the present time may be found in newspaper almanacs. Is this tariff high, low, or moderate in its rate?

2. The Statistical Abstract, published by the Bureau of Statistics of the Treasury Department, gives the list of items upon which duties and internal revenue taxes are collected, and the amounts yielded by each for a series of years; the expenditures of the government, with the chief items; a statement of the National debt; and statistics concerning the money of the United States. See also any newspaper almanac.

3. Why do liquors and tobaccos bear the heaviest excise taxes? What reasons can you give for taxing the other articles mentioned on pp.

82-83?

4. Because our coins contain one-tenth alloy, they are said to be nine-tenths fine. Calculate from the weights of pure metal, given on p.

91, the total weights of the gold and silver dollars.

5. For information concerning the Act of Congress fixing a "standard of weights and measures," see Government in State and Nation, 188-189.

6. The depreciation of the United States notes, referred to on p. 92, is shown graphically in Government in State and Nation, 185.

7. For our money, see Reinsch, Young Citizen's Reader, 101-103; Marriott, Uncle Sam's Business, 97-119; 165-172; Century Book for Young Americans, 121-134.

8. On commerce, read Harrison, This Country of Ours, 65-67.

9. Finances. Harrison, 59-65, and Chapter 12; Marriott, 109-127.

CHAPTER XI.

OTHER GENERAL POWERS OF CONGRESS.

I. POWER OF NATURALIZATION.

Who Are Citizens.--Who are citizens of the United States is always a question of interest. We find it clearly answered in the first clause of the Fourteenth Amendment as follows: _All persons born or naturalized in the United States and subject to the jurisdiction thereof are citizens of the United States, and of the States wherein they reside._

Thus there are two cla.s.ses of citizens: (1) those who are citizens by birth; (2) those who have been naturalized. Children born in this country, though of foreign parentage, and residing here, may be considered American citizens if they choose. According to an Act of Congress, pa.s.sed in 1882, Chinese aliens may not be naturalized; but our Supreme Court has decided that a child born in the United States of Chinese parents is a citizen, if he desires to be. Though born in a foreign country, a child whose father is an American citizen may claim the privilege of American citizenship. Indians who keep their tribal relations are not included under the provisions of this section.

Naturalized Citizens.--The second cla.s.s of citizens are those who are naturalized. That the rules should be uniform by which aliens become citizens, is self-evident. After a brief discussion, the Const.i.tutional Convention provided in Section 8, Clause 4, that _Congress shall have the power to establish a uniform rule of naturalization, and uniform laws on the subject of bankruptcies throughout the United States._

Process of Naturalization.--(1) The foreigner desiring to become a citizen goes before the clerk of any court of record and declares, "upon oath," that it is his intention to become a citizen of the United States, and to renounce all allegiance to the government which has jurisdiction over him. He then receives his "first papers." (2) After he has resided in the United States for five years, providing two years have elapsed since his "declaration of intention," he may secure his certificate of naturalization. He must appear in open court and swear that he will support the Const.i.tution of the United States, and renounce all allegiance to any foreign power. Two witnesses must testify to his term of residence, and declare that he is a man of good moral character.

The applicant must be able to speak the English language. His wife, and those of his children who are under twenty-one years of age, become citizens at the same time. In certain cases Congress has, by a single act, admitted large numbers of aliens to American citizenship, as it did at the time of the purchase of Louisiana, the annexation of Texas, and of Hawaii.

Bankrupt Laws.--It sometimes happens, because of general depression in trade throughout the country, on account of losses, or for other reasons, that business men become heavily involved in debt. They are said to be insolvent. Now, it is but just that such property as they have should be divided in some equitable way among the creditors. A bankrupt law secures such a division, and the debtor is, at the same time, freed from all legal obligation to pay the debts which cannot be met in this way. The first law of Congress on this subject was pa.s.sed in 1802, and repealed in 1803.

Since that time there have been three other bankrupt laws, but the total time during which they have been in force amounts only to some twenty years. The last law, that of 1898, is still in operation.[29]

[Footnote 29: See "Government in State and Nation," p. 193, for a further discussion of bankrupt laws--especially that of 1898.]

Some States have also pa.s.sed insolvency laws. However, these must not in any way conflict with the provisions of the National bankrupt laws.

II. THE POSTAL SYSTEM.

Organization of the Post-office Department.--We can appreciate somewhat the advancement made in the postal service rendered by the government when we read that an Act of Congress in 1782 directed that mail should be carried "at least once in each week from one office to another." Our well-organized postal system, declared recently by the Postmaster-General to be the "greatest business concern" in the world,[30] has been evolved through laws made in carrying out the provision of the Const.i.tution that _Congress shall have power to establish post-offices and post-roads._

[Footnote 30: The total receipts of the Post-office Department for 1910 were $224,128,657.]

As is well known, the Postmaster-General, a member of the President's Cabinet, is at the head of this department of government. One of the chief burdens of the Post-office Department was formerly the appointment of the so-called fourth-cla.s.s postmasters, intrusted to the Fourth a.s.sistant Postmaster-General. Executive orders of Presidents Roosevelt and Taft placed 50,000, or about five-sevenths, of these postmasters in the _cla.s.sified_ service. An order of President Wilson, in 1913, applied the _merit_ system to these offices, by which these postmasters were compelled to demonstrate their fitness for these appointments. This order included all fourth-cla.s.s postmasters except those paying less than $180 a year. The other three cla.s.ses, in which are included those postmasters whose salaries are not less than $1000, are appointed by the President, with the consent of the Senate.

Cla.s.ses of Mail.--Mail matter belongs to one of four cla.s.ses.

In general, the cla.s.ses and rates are as follows: First cla.s.s--letters, two cents an ounce; second cla.s.s--newspapers and periodicals, one cent a pound; third cla.s.s--books, one cent for two ounces; and fourth cla.s.s--merchandise, limited to four-pound packages, one cent an ounce.

Free Delivery.--Among the notable advances in the mail service was the provision for the free distribution of mail in the cities of 10,000 inhabitants, or where the annual postal receipts are $10,000 and above.

Rural Free Delivery.--No innovation in postal methods has been more successful than the free delivery of mails in the country districts. The development of the system, since its establishment in 1897, has been remarkable.[31]

[Footnote 31: According to the report of the superintendent for the year ending June 30, 1910, 41,079 routes had been established. The rural population receiving daily mail service amounted to more than 18,000,000. Two thousand one hundred and twenty-four new rural routes were authorized in 1911, aggregating 51,230 miles in length. President Taft urged a further extension of the system.]

Among the good effects resulting from its extensive introduction may be mentioned the following: (1) Correspondence in the communities affected has increased. (2) The circulation of the daily newspaper and of periodical literature has been greatly enlarged, and interest has grown in public affairs. (3) Good roads have been multiplied, for they are made one of the conditions for the introduction of the service. (4) Because the country districts are brought into daily communication with the centres of population, the tendency to quit the farm for the town has been lessened and thus rural free delivery is helping, in some degree, to solve one of the problems of our social and industrial life.

Postal Savings-Banks.--At various times bills have been before Congress providing for the establishment of postal savings-banks in connection with post-offices. It is proposed that they shall receive small amounts on deposit, paying a low rate of interest, and that the funds secured be invested in government bonds. A law was pa.s.sed in 1910 which provided for the establishment of postal savings-banks. The plan has proved a success.

Some of the Defects in Our Postal System.--(1) For thirty years prior to 1911 there has been an annual deficit of several million dollars. This was caused largely through the transportation of second-cla.s.s matter, so-called periodical publications. But in 1911 there was a postal surplus of nearly $220,000, which was due largely to more business-like methods in management. That this is an unjust drain upon the public funds is clear, when we consider that, in a recent year, the government expended $17,277,783 more than it received for carrying second-cla.s.s mail. (2) Another serious defect has existed in the payment of exorbitant rates to railroad companies for carrying the mails. (3) Some Congressmen abuse the privilege granted them of sending government publications free. (4) The postal system has offered one of the best fields for the manipulation of the spoilsman. Postmasters have been usually appointed on the recommendation of representatives, and, too frequently, the one essential to securing an office is that the applicant must be influential in politics.

Parcels Post.--On January 1, 1913, a far-reaching innovation was put into operation by the Post-office Department. The parcels-post system was used for the first time. Bills providing for such a system had been introduced into Congress, but failed to pa.s.s owing largely to the opposition of express companies and other common carriers.