is one laid directly upon the persons or property of the people. A poll tax, a land or property tax, or a tax upon the income of a person, may be named as illustrating this kind of tax. Taxes upon imported goods, called duties or imposts, and excises or taxes on goods made within the country are examples of indirect taxes. The money paid for license to sell spirituous liquors is also an excise tax.

Although Congress has power to lay direct taxes, it has seldom been exercised. Direct taxes were used to help defray the heavy expenses of the Civil War; but the Treasury has not for many years received any revenue from such sources. As to indirect taxes, the United States has no power to levy duties upon exports.

A tariff is a schedule of taxes; but more specifically a law showing the import tax levied upon each article brought into this country. A system of taxation called the protective tariff has for its object, not only the raising of the money for the expenses of the government, but also the protection of home manufacturers. This system makes the duties high on all kinds of articles which we also manufacture in this country. A system of tariff for revenue takes into consideration only the raising of the amount of money needed to carry on the Government and pay the expenses; protection of home industries is only incidental. Free trade is the admission of all foreign goods free of duty. Reciprocity is a system of mutual concessions by two countries by means of which equal privileges as regards the admission of imports are granted.

The duties levied by the United States combine revenue and protection. The tariff applies to States and Territories alike, but not to the islands recently acquired from Spain. Within the borders of the United States proper there is absolutely free trade.

Duties are collected by government officials stationed in customhouses at the various ports of entry. When a vessel from a foreign country arrives, it is submitted, with its cargo and all papers and invoices, to the inspection of the customs officers. These officials attend to the weighing, measuring, and inspecting of the goods subject to duty. All duties must be paid before the imports can be taken away from the ship, or from the warehouses in which the goods may be temporarily placed.

Public Credit. The power to borrow money authorizes the selling of bonds of the United States, the issue of legaltender paper money, and the establishment of National banks (I 2).

In 1791 the public debt was less than $76,000,000; and until the Civil War it never exceeded $100,000,000, except for a few years immediately after the War of 1812, when it rose to $127,000,000. In 1835 it had decreased to less than $38,000, but rose again gradually to $90,000,000 in 1861. When the great civil strife was over, the debt had been greatly increased, reaching its highest point in 1866 at over $2,773,000,000. On November 1, 1908, the public debt, not including certificates and Treasury notes, was $1,293,657,878. Of this public debt $392,665,653 bears no interest. The greater part of the interest-bearing debt is due to bondholders, and bears the low rate of 2 per cent. interest. The remainder was borrowed partly at 3, and partly at 4 per cent. The task of extinguishing the National debt, which Jefferson was so anxious to accomplish, is no longer regarded as vital to the destinies of our government. No other nation borrows money at so low rates as is possible to the United States, and no other great nation has so small a public debt, the entire amount being $2,637,973,747.

The fourth section of the Fourteenth Amendment (Am. 14) forbids the repudiation of any part of the public debt of the United States. It also makes illegal and void all debts, obligations, and claims incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave.

Commerce. Under the authority given by the Constitution, Congress has power to regulate the commerce of the United States with foreign nations. Nor can one State refuse to admit the products of another State, or levy any duties upon them. Congress has power to prevent unfair discrimination in freight and passenger rates (I 3).

Naturalization.-Congress has provided that a foreigner, unless he belongs to the Mongolian race, may become a citizen on his compliance with certain conditions.

The requirements for naturalization are as follows: Five years' residence in the United States, and one year's residence in the State or Territory where the privilege is sought; two years' preliminary declaration of intention to become a citizen; an oath to support the Constitution; the renouncing of allegiance to any foreign power, and of all titles of nobility. The naturalized citizen is entitled to all the rights of the native-born citizen, except that he can never be President or Vice President (I 4).

Congress has power to extend naturalization by general law to the inhabitants of large sections of country. When by joint resolution Texas was annexed as a full-fledged State in 1845, wholesale naturalization was practiced. A more recent example occurred when by Act of Congress in 1900, all persons who in 1898 were citizens of the Republic of Hawaii, were declared to be citizens of the United States and of the Territory of Hawaii. President Jefferson and the Senate practi

cally did the same thing by treaty when the vast territory of Louisiana was purchased in 1803.

The right to vote is given by the States, and in most of them citizenship is an essential qualification of the voter. Yet in about one fifth of the States foreigners may vote if they have declared their intention to become citizens.

Bankruptcy. A bankrupt is a person who is unable to pay all his just debts. In law, the term is applied to a person who has been judicially declared unable to meet his liabilities. A bankrupt law enables a debtor to be discharged from the payment of his debts upon giving up all property to his creditors. Congress has power to pass laws by which insolvent debtors may settle their affairs. There have been four laws enacted concerning bankruptcy: the first in 1800, repealed in 1803; the second in 1841, repealed in 1843; the third in 1867, repealed in 1878; and the fourth in 1898. Many States have passed bankruptcy laws of their own, but these are always subject to the National law when there is one in force (I 4).

Money. As a consequence of the power conferred on Congress to coin money and to regulate its value, the United States has a uniform currency. The individual States are expressly forbidden to coin money or to make anything but gold and silver a legal tender for debts.

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The place where money is coined is called a mint. Mints have been established in different cities, but those in Philadelphia, New Orleans, and San Francisco are the only ones now in operation. The mints at Carson City and Denver are at present equipped as Assay offices. The principal mint, and the first that was established in this country, is at Philadelphia (I 5).

The right to coin money implies the right to issue paper

money. Such bills, however, are only evidence of a credit, and are but convenient substitutes for money. Paper money is taken by the people only because the Government stands responsible for the various forms of paper money issued. All paper money is made at the Bureau of Engraving at Washington.

The paper money that is nearest to actual money of all the forms issued consists of the gold certificates and the silver certificates, issued on the security of gold and silver deposited as bullion in the Treasury of the United States. They are legal tender for all obligations public or private, except that part of the interest on the public debt which the Government agrees to pay in gold coin.

Another part of the paper money in circulation consists of the bank notes issued by National banks under the sanction of the Government, and secured by United States bonds deposited by such banks with the United States Treasurer at Washington. These notes are not a legal tender for private debts; but they are readily accepted everywhere, since the holders of such National bank notes, were it desirable to do so, could have them redeemed in gold or silver by presenting them at the bank of issue or at the United States Treasury. As a means of protection of the interests of the people, the Government inspects National banks regularly.

Still another part of the money consists of "greenbacks," legal tender notes of the United States, first issued in 1862. They are so named because the devices on the back were printed in green ink to prevent alterations and counterfeits. Like gold coin and silver dollars, they are legal tender for all private debts. At one time the total amount of greenbacks outstanding was $600,000,000. After the resumption of spe