banks may conduct savings departments, the funds of which cannot be withdrawn unless thirty days' notice has been given. The banks, however, may waive the time notice as each case occurs. The member banks may buy approved commercial securities, and, when necessary, these securities will be taken up by the regional reserve banks and the member be paid lawful money. This will relieve the member bank from financial embarrassment at times when money is in great demand, and will put money where most needed.

For the first time in American financial legislation, farming is recognized as a business. Member banks are allowed to purchase farm securities and discount paper for six months which has been issued for agricultural purposes or based on live stock; also, member banks outside the reserve cities are allowed to buy five-year first mortgages on unencumbered and improved farm land to fifty per cent of its market value.

On July 31, 1914, there were seventy-five hundred fortyeight national banks doing business in the United States whose authorized capital was $1,073,734,175, with an outstanding circulation of over $750,000,000 bank notes. All but very few national banks have accepted membership in the new federal reserve plan, which guarantees an enormous capital with which to initiate it. Except for the general observations made, the national banks will go on under very much the same general regulations as before. It will take time to work out the details of the federal reserve system. The possibilities cannot be seen, but the best public opinion seems to be that the plan is sound, and under wise direction will do much to insure financial stability.

LIBRARY REFERENCES

American Year Book 1910, 1912.

Andrews: New Manual of the Constitution, 104–120.

Davenport Outlines of Economic Theory, 224-256.

Dewey Financial History of the United States, chs. III, IV, IX, X.

Ely: Outlines of Economics, rev. ed., chs. XIV, XV.

Fish: The Development of American Nationality, ch. XXVI.
Forman: Advanced Civics, chs. XL, XLI, XLII.

Garner: Government of the United States, ch. XII.
Hinsdale American Government (4th ed.), 198–211.

James and Sanford: Government in State and Nation, ch. XIX. Johnston and Woodburn: American Political History, I, ch. VII; II, ch. XVIII.

Kaye Readings in Civil Government, chs. XIX, XX.

Noyes: Forty Years of American Finance (1865-1907). See index.

Sprague: The Federal Reserve Act of 1913, Quarterly Journal of Economics, February, 1914.

White Money and Banking, 3-38; 148-224; 406-436.

Source Material and Supplementary Aids. - The Congressional Record. Annual report of the secretary of the treasury. Report of the comptroller of the currency. The federal reserve act.

SUGGESTIVE QUESTIONS

1. Discuss briefly the money situation prior to the adoption of the Constitution.

2. How does Congress borrow money?

3. Where are the mints located? How has the value been regulated?

act.

4. What is Gresham's law? How does it affect money?

5. What is meant by "free coinage "?

Define the Bland-Allison

6. What is meant by the gold standard? Subsidiary coinage? Bimetallism?

7. Give the present status of the relation between gold and silver.

8. Define currency.

What gives paper money its value? What

kinds of paper money are in use now?

9. Where do state banks get their authority? What functions have they?

10. Define a national bank. How organized? Capital and directors? How controlled?

11. Define a savings bank. Postal savings bank. Good of, to a community?

12. Wherein is our currency system faulty to-day? How may it be remedied?

QUESTION FOR DEBATE

Resolved, That the Aldrich currency reform plan, or some other one-central-bank system, should be adopted.

CHAPTER XI

NATIONAL LEGISLATIVE PROHIBITIONS AND STATE

LIMITATIONS

Legislative Prohibitions and State Limitations. The government of the United States is one of checks and balances between the nation and the states. It was most earnestly desired that the federal government should be strengthened sufficiently to protect life and property, and promote the general welfare; but it was also desired that it should in no wise endanger the autonomy of the states. The definition of "implied powers" is largely a matter of judgment on the part of Congress and the courts; but some of these powers were deemed sufficiently menacing to the states to be definitely prohibited.

I.

Article I, Section 9, Clause 1. The migration or importation of such persons as any of the States now existing shall think proper to admit shall not be prohibited by the Congress prior to the year one thousand eight hundred and eight, but a tax or duty may be imposed on such importation, not exceeding ten dollars for each person.

The Slave Trade. That the general feeling was averse to the slave traffic is shown by the fact that it was prohibited by a congressional law which took effect January 1, 1808, the earliest date allowed by the Constitution for its prohibition. It is estimated that between the adoption of the Constitution and the year 1808, over three hundred thousand slaves were imported into this country. The federal government had a right to impose a tax of ten dol

lars for each slave imported, but it never exercised this power. This clause is now obsolete, and is of historical interest only.

Slavery Prohibited. The Thirteenth Amendment to the Constitution of the United States, which abolished slavery in every part of the United States and all the territory under its jurisdiction, was ratified December 18, 1865. By this and later amendments, the negro was given the same constitutional rights enjoyed by the white man.

Sec. 9, Clause 2. The privilege of the writ of habeas corpus shall not be suspended unless, when in cases of rebellion or invasion, the public safety may require it.

Writ of Habeas Corpus. A writ is an instrument in writing, issued by authority of law, commanding the person to whom it is directed to do a certain act. Habeas corpus means "you may have the body"; and the writ (once in Latin, now in English) commands the officer to whom it is addressed to bring into court the person whose detention is to be inquired into. The writ of habeas corpus is regarded as the greatest known safeguard against unlawful imprisonment. If a person is imprisoned, he, or his friends, may make application before a competent judge for a writ authorizing the prisoner to be brought before the judge for an investigation of the legality of the imprisonment. The person or persons detaining him will be given an opportunity to show reasons why the person should not be discharged. If, after the evidence is heard, the judge is of the opinion that the accused is not lawfully detained, he will discharge and release him. or innocence of the accused, the truth or charges against him, are not inquired into.

But the guilt falsity of the