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POWERS AND DUTIES OF THE SEPARATE HOUSES.
I. IMPEACHMENT.
Article II, Section 4. _The President, Vice-President and all civil
officers of the United States, shall be removed from office on
impeachment for, and conviction of, treason, bribery, or other high
crimes and misdemeanors._
Article I, Section 2, Clause 5. _The House of Representatives shall ...
have the sole power of impeachment._
Section 3, Clause 6. _The Senate shall have the sole power to try all
impeachments. When sitting for that purpose, they shall be on oath or
affirmation. When the President of the United States is tried, the Chief
Justice shall preside; and no person shall be convicted without the
concurrence of two-thirds of the members present._
Section 3, Clause 7. _Judgment in cases of impeachment shall not extend
further than to removal from office and disqualification to hold and
enjoy any office of honor, trust, or profit under the United States; but
the party convicted shall nevertheless be liable and subject to
indictment, trial, judgment, and punishment according to law._
There have been but seven impeachment trials in the history of our
government. Section 4 of Article II declares who may be impeached. The
expression "civil officer" does not include military and naval officers.
They are subject to trial by court-martial. Members of Congress may not
be impeached, since the Constitution authorizes each house to bring to
trial and punish its own members. Clause 5 of Section 2, and Clauses 6
and 7 of Section 3, Article I, give the method of procedure against an
officer who may be charged with "treason, bribery, or other high crimes
and misdemeanors." The articles of impeachment preferred by the House of
Representatives correspond to the indictment in a criminal trial. The
manner of conducting an impeachment trial, in the Senate, resembles also
a trial by jury.[19] That the "Chief Justice shall preside" during the
trial of the President of the United States is a wise provision, because
it is easy to presume that a Vice-President might be personally
interested in the conviction of a President.
[Footnote 19: See "Government in State and Nation," p. 159.]
II. THE QUORUM, JOURNAL, AND FREEDOM OF SPEECH.
Determination of Membership and Quorums.--Section 5, Clause 1.
_Each house shall be the judge of the elections, returns, and
qualifications of its own members, and a majority of each shall
constitute a quorum to do business; but a smaller number may adjourn
from day to day, and may be authorized to compel the attendance of
absent members, in such manner and under such penalties as each house
may provide._
In 1900 the right of a senator to a seat in the Senate was challenged by
the citizens of his State on the ground that his election was secured
through bribery and corruption. In a memorial of the citizens forwarded
by the governor, the matter formally came before the Senate. The case
was referred to the Committee on Privileges and Elections, which
unanimously reported, after careful deliberation, that the senator was
not duly and legally elected by the legislature of his State. The
committee found that he had obtained through illegal and corrupt
practices more than eight votes which would otherwise have been cast
against him and changed the result. Before a vote was taken in the
Senate on this resolution the senator resigned his seat.
In the House the name of the person possessing the certificate of
election signed by the governor of his State is entered on the roll of
the House, but the seat may still be contested. Many cases of contested
elections are considered by each new House. There were thirty-two seats
contested in the 54th Congress. Such cases are referred to the Committee
on Elections, which hears the testimony, and presents it to the House
for final decision. Each of the cases when presented to the House
consumes from two to five days which might otherwise be used for the
purposes of legislation. The law provides that no more than $2000 shall
be paid either of the contestants for expenses, but even then, it is
estimated, these contests cost the government, all told, $40,000
annually. When the decision is rendered by the House, the vote is, in
most cases, strictly on party lines, regardless of the testimony. In
view of these facts, it has been suggested that the Supreme Court decide
all contested elections.
How a Quorum is Secured.--If it appears, upon the count of the
speaker, or upon the roll-call of the House, that a majority is not
present, business must be suspended until a quorum is secured. Fifteen
members, including the speaker, may be authorized to compel the
attendance of absent members. This is accomplished as follows: the doors
of the House are closed, the roll is called, and absentees noted. The
sergeant-at-arms, when directed by the majority of those present, sends
for, arrests, and brings into the House those members who have not
sufficient excuse for absence. When a quorum is secured, business is
resumed.
Rules and Discipline.--Section 5, Clause 2. _Each house may
determine the rules of its proceedings, punish its members for
disorderly behavior, and, with the concurrence of two-thirds, expel a
member._
The Journal.--Section 5, Clause 3. _Each house shall keep a journal
of its proceedings and from time to time publish the same, excepting
such parts as may in their judgment require secrecy; and the yeas and
nays of the members of either house on any question shall, at the desire
of one-fifth of those present, be entered on the journal._
Our Knowledge of Congressional Proceedings.--As citizens in a
republican government, it is our duty to keep informed on the problems
which our representatives are called upon to solve. Means of gaining
information are not wanting. The public galleries of both houses are
usually open to visitors. The official record of the proceedings of
Congress is made known to the public through the Journal, which is read
at the opening of each day's session. Reports of the debates do not
appear in the Journal, but are published each day in the _Congressional
Record_.
Another means of keeping constituents informed on the position of their
representatives is through the recording in the Journal of the vote of
each member when demanded by one-fifth of those present. In voting by
the "yeas and nays," the clerk calls the roll of members and places
after each name, "yea," "nay," "not voting," or "absent." The Senate
rules specify this as the only method of voting. (Other methods of
voting in the House are indicated on page 77.)
Power to Adjourn.--Section 5, Clause 4. _Neither house, during the
session of Congress, shall, without the consent of the other, adjourn
for more than three days, nor to any other place than that in which the
two houses shall be sitting._
If there is a disagreement between the two houses with respect to the
time of adjournment, the President may adjourn them to such a time as he
thinks proper. This right has never yet been exercised.
Compensation and Freedom from Arrest.--Section 6, Clause 1. _The
senators and representatives shall receive a compensation for their
services, to be ascertained by law, and paid out of the treasury of the
United States. They shall in all cases, except treason, felony, and
breach of the peace, be privileged from arrest during their attendance
at the sessions of their respective houses, and going to and returning
from the same; and for any speech or debate in either house, they shall
not be questioned in any other place._
Should the members of Congress be paid a salary, or should the office be
regarded as exclusively one of honor? These questions were discussed at
length in the Constitutional Convention. Some of the delegates favored
the English custom, by which members of Parliament receive no salary. It
was finally concluded to adopt the provisions as given, in order that
men of ability, though poor, might become members of the National
Legislature.
By a law of 1789 the compensation of senators and representatives
was fixed at six dollars per day and thirty cents for every mile
traveled, by the most direct route, in going to and returning from
the seat of government. Prior to 1873 this amount was changed
several times by act of Congress. The compensation then agreed upon
and until 1907 was $5000 per year, with mileage of twenty cents,
and $125 per annum for stationery. The speaker received $8000 a
year and mileage. The president _pro tempore_ received the same
amount while acting as president of the Senate.
To many people $5000 seemed a large salary, but the great expense
of living in Washington renders the salary quite inadequate.
Members have been known to pay more than their salaries for
house-rent alone. Accordingly, in 1907, the salary of senators and
representatives was increased to $7500 and that of the speaker and
president _pro tempore_ of the Senate to $12,000.
To Hold Other Offices. Disqualification.--Section 6, Clause 2. _No
senator or representative shall, during the time for which he is
elected, be appointed to any civil office under the authority of the
United States which shall have been created, or the emoluments whereof
shall have been increased, during such time; and no person holding any
office under the United States shall be a member of either house during
his continuance in office._
The purpose of this provision seems to have been to remove the
temptation on the part of Congressmen to create offices, or to increase
the emoluments of those already existing, in order to profit by such
legislation. The exclusion of United States officials from seats in
Congress was due to the desire of appeasing State jealousy, which
asserted that the National government would in this way secure an undue
influence over the State governments. It is advocated, with good reason,
that members of the Cabinet should be privileged to take part in the
discussion of measures in Congress which pertain to their own
departments. Alexander Hamilton asked for this privilege. It was refused
because of the belief that he would exert too great influence over the
members. The precedent thus established has always been retained.
But since executive officers are often invited to present their views
before committees of Congress, they may, in this way, exert great
influence upon legislation.
CHAPTER IX.
HOW LAWS ARE MADE BY CONGRESS.
Methods of Procedure Developed by Custom.--Very little can be
learned directly from the Constitution concerning the actual methods
employed in the enactment of laws by Congress. In both houses the ways
in which business is conducted have been developed by custom; and they
have changed from time to time according to circumstances. These methods
of procedure are different from those in use when the government was
new. The principal reason for this is found in the growth of the amount
of business that Congress must consider; this, in turn, has been caused
by the growth of population and wealth, and by the expansion of business
relations throughout this country and with other nations.
I. _The Committee System._--An understanding of this system is necessary
in order that we may follow the steps taken in the making of laws. Two
facts made the committee system necessary in the houses of Congress. (1)
The number of members, especially in the House of Representatives, is so
large that business cannot be transacted quickly by the entire body. (2)
The number of bills introduced is so very great that it is impossible
for either house to consider all of them; hence it is necessary that
committees shall examine the bills and decide which are worthy of
consideration.
In the long session of the 61st Congress more than 33,000 bills
were introduced into the House. The number of committees in the
House was 61, the membership varying from 5 to 19. The most
important House committees are those on Ways and Means (which has
charge of all bills for raising revenue), Appropriations, Banking
and Currency, Foreign Affairs, and Military Affairs. In the Senate
of the 61st Congress there were 72 standing committees. The number
of members on a committee was in most cases 9 or 11. A few of the
Senate committees are those on Finance (corresponding to the
Committee on Ways and Means in the House), Agriculture, Commerce,
and Foreign Relations.
Both in the House and in the Senate every member is on some
committee, and some members have places on several committees. In
both houses the committees are elected. The chairman and a majority
of the members of each committee are from the members of the party
that has a majority in the house.
Steps in the Progress of a Bill.--(1) The first step in the
progress of a bill is its _introduction_. This is done in the House by
merely placing the bill in a basket on the clerk's desk. In the Senate
the member introducing a bill rises and asks leave to introduce it.
(2) The bill is next _referred_ to a committee.
(3) If the committee decides that the bill should go further they
_report it_ back to the house.
The house will in a great majority of cases pass or reject it according
to the committee's recommendation. Few bills are debated in either
house, and in the most of these cases the discussion has no influence
upon the fate of the bill--it is meant merely to be heard or to be
printed. Hence, it is in that intermediate stage between the reference
of the bill to a committee and the report on it that the real work of
legislation is accomplished.
The Power of Committees over Bills.--A committee may exercise the
utmost freedom with respect to the bills referred to it. The greater
number of bills receive no consideration whatever from the committees;
these may never be reported if the committees see fit to ignore them.
Other bills are amended by the committees, or new bills are substituted
for them. Such is the power intrusted to Congressional committees.
However, if a majority of the house wishes, it may take up for
discussion a bill which one of its committees has decided not to report
back.
Many of the important committees have separate rooms where their
meetings are held. Here the members may confer in secret, or they
may hold public hearings; i.e., persons are invited to give
testimony or to make arguments. Frequently the majority members of
a committee hold separate meetings, determine their policy, and
then adhere to it regardless of the wishes of the minority members.
The latter may present a separate report called the _minority
report_ of the committee.
Consideration of Bills.--(4) In the next step, the bill is brought
before the house for consideration. How is it determined which bills
shall be thus favored? In some measure this depends upon the importance
and the merits of the bill; but it depends more upon the skill and
influence of the member (generally the chairman of the committee
reporting the bill) who is particularly interested in seeing it enacted
into law. In the House of Representatives this important matter is most
often decided by the Committee on Rules, which is composed of ten
members, six being of the party that has a majority in the House. In
most cases this committee decides which bills shall be considered, and
how much time shall be given to the discussion of each one. So it is
necessary for the chairman of a committee to make a previous arrangement
with the speaker to be recognized before he can bring up his bill. But
on Wednesday of each week the chairmen of committees may call up their
bills in the order in which they secure recognition. And the Committee
on Rules does not control the bills which the House takes out of the
hands of committees.
II. _The Power of the Speaker._--The speaker is the executive officer
who sees that the decisions of the Committee on Rules are carried out.
In most important matters it is necessary for a member to make an
arrangement with the speaker in order to secure recognition when he
wishes to address the House.
In exercising the power of _recognition_, the speaker will, of course,
give both the sides a fair opportunity to debate upon important
measures. He will not permit members to make motions or lengthy speeches
merely for the sake of delaying some action to which they are opposed.
Such actions are called _obstructive tactics_, or _filibustering_.
The Lobby, Log-rolling, and Patronage.--Not all the bills that
come before Congress are passed or rejected because they are wise
or unwise. The influences that determine the course of legislation
at Washington are very numerous and complicated. Some of these
influences are to a greater or less extent legitimate, and others
are totally bad. The _lobby_, in its broadest sense, is composed of
all those persons who go to Washington in order to exert pressure
upon Congressmen in favor of or against certain measures. Some of
the best laws and some of the worst are enacted through the
influence of the lobbyist. _Log-rolling_ is an important influence
in determining legislation; a member votes for the pet measure of
his fellow Congressman on condition that the latter will vote for
the bill in which he is particularly interested. Political
_patronage_ is a great factor in determining votes in Congress; the
power of members to recommend appointments, and the influences
exerted in their favor by the appointees, often determine the
question of their continuance in office. Consequently, there is a
great temptation to use patronage in exchange for votes. The use of
money directly in _bribery_ is difficult of detection, but other
favors and privileges of money value are no less effective in the
purchase of the votes of those members who are so unscrupulous as
to be open to such influences.
Debate in Congress.--It is now apparent that many other things
besides the arguments used in debate determine which bills shall pass
and which shall fail. In the House the time for debate is strictly
limited, on account of the amount of business. The chairman of the
committee reporting a bill generally has one hour in which to urge the
passage of his measure; for a portion of the time he may _yield the
floor_ to other members, both friends and opponents of the bill. Of
course, much more than one hour is given to debate on important bills.
Many of the speeches which are printed in the _Congressional Record_
have not been delivered; but they are intended for circulation among the
constituents of representatives, and for use as campaign documents. Many
of the speeches that are actually delivered receive scant attention; the
lack of interest in them is made evident by the noise and confusion
that very often prevail during sessions of the House.
Senate Procedure.--In the Senate debate is not limited. Senators
are expected to regard each other's rights with respect to the amount of
time and attention they may demand; yet a bill may be "talked to death"
in the Senate. As a result, the Senate is less business-like in its
procedure than the House, and some means of checking unlimited
discussion have often been proposed for it.
Conference Committees.--A bill which has passed one house must be
sent to the other. Here it is introduced and goes through the stages
above described. If one house amends a bill which has already passed the
other, it must be returned for re-passage to the house where it
originated. This is a frequent cause of conflict between the two houses,
and each tries to insist on its rights.
When such a dispute cannot be easily adjusted, a _conference committee_
must be appointed. This is composed of members from each house, and they
endeavor to arrange a compromise which will be acceptable to both
houses. Generally their decision is ratified without question, but
sometimes even this method of settlement fails.
Methods of Voting.--There are three methods of voting in Congress.
(1) Members respond "aye" or "no" by acclamation. (2) If a _division_ is
called for, a rising vote is taken and the members are counted. In the
House the counting is done by two tellers, who stand near the speaker's
desk, while the members pass between them in single file, first those
voting in the affirmative, and afterward those opposing the motion. (3)
When the "yeas and nays" are called for, or whenever the rules of either
house require them, the roll is called and each member votes as he
responds to his name. This vote is entered on the Journal.
After the roll-call is completed, the presiding officer announces
the _pairs_. Members who belong to different political parties may
agree that they shall be recorded on opposite sides of party
questions, whether they are present or not. Or pairs may be
arranged for particular votes only. This device enables a member to
be absent from his seat without feeling that his vote is needed.
The President's Power in Law-Making.--A bill which has received a
majority vote in both houses is next sent to the President.
Article 1, Section 7, Clause 2. _Every bill which shall have passed the
House of Representatives and the Senate shall, before it become a law,
be presented to the President of the United States; if he approve he
shall sign it, but if not he shall return it, with his objections, to
that house in which it shall have originated, who shall enter the
objections at large on their journal and proceed to reconsider it. If
after such reconsideration two-thirds of that house shall agree to pass
the bill, it shall be sent, together with the objections, to the other
house, by which it shall likewise be reconsidered, and if approved by
two-thirds of that house it shall become a law. But in all such cases
the votes of both houses shall be determined by yeas and nays, and the
names of the persons voting for and against the bill shall be entered
on the journal of each house respectively. If any bill shall not be
returned by the President within ten days (Sundays excepted) after it
shall have been presented to him, the same shall be a law, in like
manner as if he had signed it, unless the Congress by their adjournment
prevent its return, in which case it shall not be a law._
There are then three ways in which a bill may become a law. (1) It may
pass by majority vote in both houses and be signed by the President. (2)
It may, after being vetoed by the President, be passed by two-thirds
vote in both houses. (3) It will become a law if the President neither
signs nor vetoes it within ten days, unless these are at the end of the
session.
The framers of the Constitution intended that the veto power should be a
check, though not an absolute one, upon hasty or unwise legislation. The
President may cause a bill to fail by neither signing nor vetoing it
during the last ten days of a session. The term _pocket veto_ has been
applied to this method of defeating bills.
SUPPLEMENTARY QUESTIONS AND REFERENCES.
1. Copies of the Congressional Record and the Congressional Directory
furnish interesting illustrations of the topics treated in this chapter.
2. What difference is there in the granting of recognition in the Senate
and House? Harrison, This Country of Ours, 45-48.
3. How are obstructive tactics carried on? Alton, Among the Law-makers,
Chapter 20.
4. Reinsch, Young Citizen's Reader, 198-213. Marriott, Uncle Sam's
Business, 8-16.
CHAPTER X.
SOME IMPORTANT POWERS OF CONGRESS.
I. NATIONAL FINANCES.
The Power of Taxation.--When we speak of the finances of a country,
we mean its revenues and expenditures. Revenues have their origin
chiefly[20] in taxation, and the power vested in Congress by virtue of
which taxes are imposed and collected is found in the following clause:
Article I, Section 8, Clause 1. _The Congress shall have power to lay
and collect taxes, duties, imposts and excises, to pay the debts and
provide for the common defense and general welfare of the United States;
but all duties, imposts and excises shall be uniform throughout the
United States._
[Footnote 20: Considerable sums are derived by our National government
from the sale of public lands. See Chapter on Territories and Public
Lands.]
Duties on Imports.--The two forms of taxes relied upon by the
United States for its revenues are (1) duties and (2) excises.[21] A
duty is a tax levied upon goods that are imported into the United
States.[22] The merchant doing business in New York, for example, cannot
obtain possession of the goods he has imported until the officers of the
custom-house at that port have examined the _invoice_, or the list of
articles in each package, with their prices; and the officers may
examine the goods, also, to see if they correspond in amount and quality
to the statements of the invoice. The importer then pays to the
collector of the port of New York the amount of the duty levied on his
importation.
[Footnote 21: The terms _duties_ and _imposts_ have nearly the same
meaning.]
[Footnote 22: Duties on exports are prohibited in Section 9, Clause 5,
of Article I: _No tax or duty shall be laid on articles exported from
any State_.]
Kinds of Duties.--These are of two kinds. (1) _Specific_
duties are fixed amounts levied on certain units of measurement of
commodities, as the pound, yard, or gallon. Under the tariff law of
1909 the duty on tin-plate was one and two-tenths cents for each
pound. (2) _Ad valorem_ duties are levied at a certain rate per
cent on the value of the articles taxed. The law of 1909 laid a
duty of 60 per cent on lace manufactures.
On some articles both kinds of duties are levied. Under the law
just mentioned, the duties on carpets and rugs were 10 cents per
square foot and 40 per cent _ad valorem_ in addition.
Passengers on steamships coming from foreign countries are required
to declare what dutiable goods they have among their baggage, each
person being allowed to enter $100 worth of goods free of duty.
Upon landing, their baggage is examined; trunks and valises are
opened, and in suspected cases the persons of travelers are
searched for concealed dutiable goods. The temptation to
undervaluation and to smuggling, in order to escape this form of
taxation, is so great that constant vigilance is necessary at
custom-houses and along the borders of the United States to prevent
these frauds. Special agents and revenue cutters are employed to
detect violations of the law.
Tariff Laws.--A _tariff_ is the list of the rates of duties fixed
by law. An importer of foreign goods must consider the amount of the
duties he has paid as part of the cost of the goods when he sells them.
If a higher price is caused in this way, less of such goods will be
imported and the production of the goods in this country will be
encouraged. Consequently, high rates of duties may have a decided
influence upon the industries of a country. When the rates of duties are
so fixed as to bring about this result, we have a _protective_ tariff;
i.e., one under which persons can produce in this country certain
articles which otherwise they could not produce, because of their
cheapness when imported from a foreign country. The duties are made so
high that it is not profitable to import the articles. When rates of
duties are fixed primarily with the object of raising revenue, and
without regard to their effect upon the industries of the country, we
have a _tariff for revenue_. This kind of tariff is generally meant when
the term _free trade_ is used. Articles on which no duties are imposed
are said to be on the _free list_. There is no country which fails to
collect duties on some of its importations.
Reciprocity Agreements.--The United States has entered into
_reciprocity treaties_ with various countries for securing the
reduction of tariff rates. Each country agrees to admit certain
products of the other country at reduced rates, or free of duty.
These are generally commodities in the production of which there is
little or no competition between the parties to the treaty.
Internal Revenue Taxes.--Excises are taxes laid upon the
manufacture and sale of certain products within the country. At the
present time these _internal revenue_ taxes are levied by the National
government upon liquors,[23] tobacco, snuff, opium, oleomargarine,
filled cheese, mixed flour, and playing cards. The greater number of
these taxes are paid by the purchase of stamps, which must be affixed,
in the proper denominations, to the articles taxed. When the packages
are broken, the stamps must be destroyed so that they cannot be used
again.
[Footnote 23: Taxes are levied, not only upon the liquors themselves,
but upon the business of brewing and rectifying; of selling by wholesale
and by retail; of manufacturing stills; and upon the stills themselves.
A list of these taxes may be obtained from the collector of any internal
revenue district.]
War Taxes.--Because taxes of this kind are so easily
collected, the government has extended them to a great number of
articles when it suddenly needed a large revenue, as in the War of
1812, the Civil War, and the Spanish War of 1898. The law of 1898
increased the taxes on liquors and tobacco, and imposed new taxes
on (1) proprietary articles, and (2) documents. Under the first
heading fall patent medicines and compounds of various kinds.
Documentary taxes[24] were imposed upon legal papers, such as
deeds, mortgages, etc., and also upon bank checks and drafts,
telegraph and telephone messages, and express receipts. Under this
law the internal revenue receipts rose from $170,000,000 in 1898,
to $273,000,000 in 1899. Congress has repealed these special war
taxes.
[Footnote 24: These were exactly like those imposed by Parliament
in the Stamp Act of 1765.]
Corporation Tax.--In 1909 Congress levied a tax upon
corporations. Every corporation doing interstate business is
required to report its earnings and its expenses. The difference
between these amounts is its _net earnings_. The law requires the
payment of one per cent of the net earnings that are in excess of
$5000.
Rules for Levying Taxes.--The Constitution contains three rules by
which Congress must be guided in the levying of taxes. We have seen,
Article I, Section 8, Clause 1, that _duties, imposts and excises must
be uniform throughout the United States_; that is, the same rates must
prevail everywhere. Another provision, Article I, Section 2, Clause 3,
is that _representatives and direct taxes shall be apportioned among
the several States ... according to their respective numbers_.[25]
[Footnote 25: See also Article 1, Section 9, Clause 4: _No capitation,
or other direct, tax shall be laid unless in proportion to the census or
enumeration hereinbefore directed to be taken._]
The third provision is the Sixteenth Amendment, which became a part of
the Constitution in February, 1913: Article 16. _The Congress shall have
power to lay and collect taxes on incomes, from whatever source derived,
without apportionment among the several States, and without regard to
any census or enumeration._
We have, therefore, the following classification:--
I. Direct | persons,[26]| Must be apportioned among
taxes, | lands, | the States according to
levied on | | population.
II. Indirect | duties, | Must be uniform throughout
taxes | imposts, | the United States.
| excises, |
| income |
| taxes. |
[Footnote 26: These are _poll taxes_. Such a tax was levied on slaves in
1798 and 1813.]
So far, we have discussed the indirect taxes only, for at present the
United States levies no direct taxes. In our previous history, however,
the government has imposed all the kinds of taxes mentioned in the
outline above. In levying a direct tax, Congress must determine the
total amount to be raised (as $2,000,000 in 1798, and $20,000,000 in
1861), and then apportion this amount among the States, according to
their population.
The bills introduced into Congress which provide for taxation are
called "bills for raising revenue." They must originate in the House of
Representatives (Article I, Section 7, Clause 1). The Committee on Ways
and Means frames these bills. In the Senate such bills are referred to
the Committee on Finance, and here the bills may be amended.
The Appropriation of Money.--Appropriation bills are those which
provide for the expenditure of the government's funds, and these bills
are in charge of the committee on appropriations in each house.
Below is a list of the principal items in the revenues and
appropriations for the year ending June 30, 1910.
REVENUES.
Duties $333,000,000
Internal revenue 290,000,000
Miscellaneous 52,000,000
-----------
Total $675,000,000
EXPENDITURES.
War Department $156,000,000
Navy Department 123,000,000
Indian Bureau 18,000,000
Pensions 160,000,000
Interest on public debt 21,000,000
Civil list and miscellaneous 180,000,000
-----------
Total $659,000,000
The Power to Borrow Money.--We have now seen how money is provided
for the government under ordinary circumstances. In extraordinary cases
this revenue is not sufficient; accordingly, Congress has been given
power by Article 1, Section 8, Clause 2, _To borrow money on the credit
of the United States_.
Money is borrowed in most cases by the sale of bonds. These are of the
same nature as the promissory notes by which individuals obtain loans.
National bonds state the promise of the United States to pay a certain
amount, at a stated time, with interest. A "registered" bond contains
the name of the owner, and this is a matter of record at the Treasury
Department. When this bond is sold, the record must be changed. "Coupon"
bonds are usually payable to bearer; they have attached to them a number
of coupons equal to the number of interest payments due during the term
of the bond. Each of these is cut off as the payment becomes due, and
can be cashed at any bank.
Bonds are bought and sold on the market, and their prices are
quoted in the daily papers. When the bonds fall due, they are
_redeemed_ by the government at their face value, or "at par." On
the market all United States bonds are now selling "at a premium."
Issues of bonds were made in 1898, the rate of interest being 3 per
cent, and in 1900, the rate being 2 per cent. The Public Debt
Statement issued monthly by the Treasury Department gives the
divisions of the bonded debt and the amount outstanding. On
December 1, 1910, the amount of the interest-bearing debt was
$913,000,000.
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