FRANKING-FRANKLIN, SELF-CONSTITUTED STATE

ice corporations to the use of public streets. | Jersey in 1769, and for Massachusetts in 1770; Under the law these franchises are assessed as while in the discussion which led to the Revoreal estate in order to prevent that deduction lutionary War he was easily the leading figure of debts, such as bonds, from the valuation of on the colonial side. The affair of the Hutchthe corporation, which is allowable in the tax-inson letters, however, weakened his influence; ation of personal property. The valuation of and when, in 1774, the ministry decided to use these special franchises is determined by the force, he returned to America. State Board of Tax Commissioners, but the tax is collected locally and used for local purposes. Transportation and transmission companies with certain exceptions thus pay three franchise taxes; the general corporation tax based on capital stock; the "additional franchise" tax on gross earnings; and the special franchise tax.

In some states the annual license fee which corporations have to pay is called a franchise tax, as, for example, in New Jersey, where the rate is one-tenth of one per cent on capital up to $3,000,000, with decreasing rates for larger amounts.

See ASSESSMENT OF TAXES; CORPORATIONS, TAXES ON; FRANCHISES, FINANCIAL ASPECTS OF; CORPORATION, PUBLIC; TAX, PERSONAL PROPERTY; TAXATION, CONSTITUTIONAL BASIS OF; TAXATION, DOUBLE.

He was at once chosen a delegate to the Continental Congress, presided over the Pennsylvania constitutional convention of 1776, and was a member of the committee which drafted the Declaration of Independence. In September, 1776, he was appointed envoy to France, and signed the treaties of 1778 with that country, and the treaty of 1783 with Great Britain. He returned to America, was for three years president of Pennsylvania, and was an active delegate to the Federal Convention. of 1787. He died at Philadelphia, April 17, See FRANCE, DIPLOMATIC RELATIONS WITH; REVOLUTION, AMERICAN, SIGNIFICANCE OF.

References: John Bigelow, Ed., Benjamin Franklin (1887-88); A. H. Smyth, Ed., Writings of Benjamin Franklin (190507); J. T. Morse, Jr., Benjamin Franklin (rev. ed., 1898); S. G. Fisher, True Benjamin Franklin (1899); John Bigelow, Ed., Complete Works of Benjamin Franklin (1887-88).

W. MACDONALD.

References: C. C. Plehn, Introduction to Public Finance (3d ed., 1909), 280-284; G. S. Coleman, "Special Franchise Taxation" in National Conference on State and Local Taxation, Proceedings, 1907; E. R. A. Seligman, Essays FRANKLIN, SELF-CONSTITUTED STATE. On Taxation (1898), 180-192; H. C. Adams, A convention was held, August 23, 1784, at Finance (1898), 379–381; H. R. Seager, Intro- | Jonesborough, the chief settlement of Washduction to Economics (3d ed., 1905), 559-560, ington County, now Tennessee, for the purpose 568. DAVIS R. DEWEY.

FRANKING. The members of Congress and officials of the United States of free transmission of mail matter, limited at present to matters relating to official business. O. C. H.

of forming an independent state. There were in it representatives of three mountain counprivilege enjoyed by| ties—Washington, Sullivan, and Greene. These counties were within the territory which the North Carolina general assembly had, in April, 1784, ceded to Congress, but which Congress had not accepted. The convention elected John Sevier as its president. It decided to form an FRANKLIN, BENJAMIN. Benjamin Frank-association of the three counties, to formulate lin (1706-1790) was born at Boston, January a constitution, and petition Congress to admit 17, 1706. In 1723 he went to Philadelphia, it as a state. A constitutional convention where he eventually acquired a moderate for- was held, in November, 1784, and a provisional tune as printer. In 1728 he established the constitution was adopted, subject to future Pennsylvania Gazette, and in 1732 published ratification. The provisional constitution was, the first number of Poor Richard's Almanac. however, put into immediate force, and a genFrom 1736 to 1750 he was clerk of the as-eral assembly was elected. The assembly met sembly, postmaster of Philadelphia in 1737, | early in 1785. It elected John Sevier governor, and from 1753 to 1774 one of the two deputy created a regular superior court and local postmasters-general for North America. At the Albany congress of 1754 he submitted a plan of colonial union, which, however, was not accepted by either the colonies or the Crown.

courts, appointed judges and magistrates, levied taxes, and enacted a number of laws. A new constitutional convention met in November, 1785, adopted a permanent constitution, which was practically that of North CarFrom 1757 to 1762 he was in England, as olina, and adopted the name of Franklin. Conthe representative of Pennsylvania in its congress would not recognize them as independent troversy with the Penns. Returning to Pennsylvania, he was defeated in 1764 as a candidate for the assembly, but was presently appointed colonial agent, and returned to England, where he remained until 1775. He was appointed agent for Georgia in 1768, for New

of North Carolina, and North Carolina would not accept their independence. The state of Franklin continued, however, to be in actual fact independent, though North Carolina provided for more efficient judicial and military government for these counties, and though the

FRATERNAL INSURANCE-FRAUD ORDERS OF THE POSTAL SERVICE

citizens of Franklin were greatly divided among themselves. The last session of the assembly was held in September, 1787. The term of office of its members expired on March 1, 1788, and the people were not willing to elect a new assembly. There could, therefore, be no governor; and when Sevier's term expired, on March 1, 1788, the state of Franklin expired. See TENNESSEE. References: J. G. M. Ramsey, Annals of Tennessee (1853), 282-445; T. Roosevelt, Winning of the West (1894), 159C. L. R.

182.

to pass through the mails has repeatedly been questioned. In 1836 efforts were made to exclude abolition mail. About 1890 began the exclusion of lottery tickets from the mails; and the power of the Government to make such exclusion was affirmed by the courts. Recently the question has been raised in respect to the power which Congress has conferred upon the Postmaster General by act of Sept. 19, 1890, to prohibit by means of so-called "Fraud Orders" the use of the mails by persons believed to be conducting a fraudulent business.

This question is one of especial interest on FRATERNAL INSURANCE. The term cov- account of the greatly increased activity of ers sick, death and out-of-work benefits, paid the Postmaster General in respect to the matby numerous societies, lodges, orders and ter, who, in addition to depriving such concerns brotherhoods in the United States (see ORDERS, of the use of the mails, has taken energetic FRATERNAL) organized along lines similar to steps for the prosecution, criminally, of offendthose of the friendly societies of Great Britain, ers, through the Department of Justice. Thus whose insurance features are carefully super- the Postmaster General in his Annual Report vised by the British Government. The Insur- for 1910 states that: "During the last few ance Year Book gives for 1911 figures for 497 months the principal officers of 34 corporations, fraternal orders with insurance in force of the companies, and firms have been placed under arface value of $9,562,511,910, being an increase rest by post-office inspectors for swindling the of 642 million in the past year and 72 per public by this method. In 46 additional cases cent or nearly three-fourths as much as all individuals have been arrested for conducting insurance in force with old line companies. similar schemes to defraud. It is estimated Over five million persons, not all wage-earners, that the 80 important cases recently brought were interested parties. The total expendi- to a head represent swindling operations that tures of all fraternal societies for death bene- have filched from the American people in less fits chiefly, since their foundation (1868) to than a decade fully a hundred million dollars. 1905 has been nearly 800 million dollars, and, As the work of investigation proceeded it befor sick benefits, 312 millions. Administration came apparent that schemes for swindling of these funds depends largely on unpaid help through the mails were vastly more numerous and is low in cost (8.4 per cent of receipts as and extensive than had been supposed. Many compared with 18.3 per cent for ordinary in- of these fraudulent enterprises proved to be surance corporations). Fraternal societies as far-reaching in their ramifications as the until recently have opposed state regulation and postal service itself. Not only have they have paid little attention to actuarial costs. swindled many thousands of credulous people Most of them are said to carry too much risk out of money foolishly invested, but to a large for the premiums charged. Through coöpera- extent they have shaken confidence in legitition of the National Fraternal Congress, the mate enterprises. The stamping out of these Associated Fraternities of America, and the frauds is therefore as important to capitalists National Convention of Insurance Commission- engaged in lawful business undertakings as it ers, a uniform bill for regulation and control is to investors. Their prevention will undoubtof these societies has been enacted in 12 states edly save to the American people millions of and is likely to make further progress. dollars annually. The department's former See INSURANCE AND SOCIAL WELFARE; ORDERS, practice of issuing fraud orders in such cases FRATERNAL. References: C. R. Henderson, In- proved ineffective. While by that method the dustrial Insurance in the U. S. (1909), Statis-offending concern was deprived of the use of tics of Fraternal Societies (1905). the mails it was a simple matter for its promoters to organize under a new name and thus evade the law. In the present crusade the department's plan has been to secure the arrest, conviction, and imprisonment of the swindlers themselves. This method, which is proving to be most effective, will be continued until the fraudulent use of the mails is brought to an end."

S. McC. L.

FRAUD OF '76. The decision of the Electoral Commission of 1877 which by a partisan vote of 8 to 7 decided all cases of disputed returns in favor of Hayes, the Republican candidate thus stigmatized by the Democratic press and in the Democratic platform of 1880. See ELECTORAL COMMISSION OF 1877.

O. C. H.

FRAUD ORDERS OF THE POSTAL SERVICE. The power of Congress and the executive to determine what matter shall be allowed

The constitutional question here involved is not so much the power of Congress to act in the matter as its authority to delegate power to the Postmaster General to act in specific cases. This power has been definitely affirmed by the Supreme Court of the United States,

FRAUD, PREVENTION OF-FRAUDS, ELECTORAL

notwithstanding the fact that the action of the Postmaster General is made conclusive, no provision being made for a judicial review. This decision is in line with the other decisions of the court which take advanced ground in respect to the conclusiveness of administrative determinations.

spection offices and prohibited their future creation; the prohibition does not apply to inspection of weights and measures, or to sanitary inspection. The state inspection laws have found express recognition in the provisions of the Federal Constitution (Art. 1, Sec. X, 2) (see INSPECTION AS A FUNCTION OF

See FRAUD, PREVENTION OF; GAMBLING; GOVERNMENT). POSTAL SYSTEM OF THE UNITED STATES.

References: W. W. Willoughby, Constitutional Law (1910), ch. lxiv; "Fraud Orders Issued by the Post Office Authorities" in New York Evening Post, April 25, 1905; Edgar D. Crumpacker, "Speech on the Post-Office Appropriation Bill" in Cong. Record, February 19, 1907, reprinted in P. F. Reinsch, Readings on American Federal Government (1909).

W. F. WILLOUGHBY.

The principal constitutional question that has arisen in connection with the prevention of frauds, is whether the likelihood of fraudulent practices justifies the absolute prohibition of some otherwise useful business. In connection with the oleomargarine legislation the Supreme Court of the United States answered this question in the affirmative, and the Court of Appeals of New York in the negative (127 U. S. 678; 99 N. Y. 377). But while the Supreme Court sustained the prohibition under FRAUD, PREVENTION OF. Fraud is dealt the Fourteenth Amendment, it held the prohiwith by the law either civilly by granting or bition invalid for purposes of interstate withholding remedies, or criminally (as a rule commerce (171 U. S. 1), whereas the only in cases specified by statute), or by pre- power of the states was conceded to exclude ventive measures intended to render its com- oleomargarine made in imitation of, and not mission more difficult or to facilitate its de- merely as a substitute for, butter (155 U. S. tection. The prevention of fraud is an exercise 461). The New York view is also borne out of the police power (see), and it may be ex-by the fact that the policy of prohibition of ercised by the states even though interstate oleomargarine had to be abandoned in all the commerce is thereby indirectly affected; so the sale of oleomargarine (see) colored in imita- The history of oleomargarine legislation tion of butter may be prohibited, though im- shows that there is a temptation to use the ported from other states and sought to be sold power to prevent fraud as a weapon to supin original packages (see) (Plumley vs. Massa- press competition. The tendency of legislachusetts, 155 U. S. 461). Congress may legis- tion is certainly to multiply measures for the late for the prevention of fraud so far as in- real or avowed purpose of protecting the pubterstate and foreign commerce is concerned, lic from fraud. There is, however, also, an and the Pure Food Law of 1906 serves at least increase in the care with which this legislation in part that purpose (see PURE FOOD). The is framed and consequently in its efficacy, so usual scope of the delegation of an ordinance particularly in the matter of legislation power to cities covers protection against fraud-against adulteration. There is also some tenulent practices, especially in the retail sale of dency to delegate the determination of difficult merchandise and in the rendering of services questions of fact in this connection to adminwhich strangers are apt to call for (innkeep-istrative authorities, a tendency most strikers, cabmen, etc.). ingly illustrated in the federal pure food law of 1906.

The principal field for legislation for the prevention of fraud is found in the business of brokers, agents and depositaries (warehouse [see] and commission men, auctioneers, etc.) and in the sale of commodities, especially of substitutes, imitations and adulterations, bankrupt and fire sales and sales by peddlers or other itinerant dealers.

states.

See BUSINESS, GOVERNMENT RESTRICTION OF;
FRAUD ORDERS; POLICE POWER.

References: E. Freund, Police Power (1904),
272-298; W. W. Thornton, Pure Food and
Drugs (1912).
ERNST FREUND.

FRAUDS, ELECTORAL. An election should Governmental regulation assumes the follow-secure expression of the free choice of each ing forms: the requirement of licenses, of re- voter. Any act that interferes with or preports, of notices, labels and marks indicating vents the effective registration of such inthe character and quality or quantity of mer-dividual expression is an electoral fraud. The chandise; the fixing of standards of weights most common fraud is bribery (see)—the giving and measures and sometimes of the form of packages; and inspection by public officials. Inspection laws were formerly a conspicuous form of trade regulation in the states, especially with reference to goods intended for export, and being connected with burdensome fees, became so unpopular in New York that the constitution of 1846 abrogated the existing in

of money or the promise of office or other reward for voting "right." Employers of labor have often been accused of using undue influence over their employees (see INTIMIDATION). Laws governing registration of voters (see) are intended to prevent false registration, such as the placing of fictitious names on the roll, registration of non-residents or non

FRAUDS ON THE TREASURY-FREE PORTS

citizens, etc. In crowded districts where individual voters cannot all be known to election officers, repeaters are sometimes organized to cast many votes under different names. Forged naturalization papers are issued to cover other fraudulent voting. The machines in New York and Philadelphia are understood to have many thousand illegal votes available at need. Actual voters may be shifted from a "safe" precinct to a "doubtful" one, and where a brief residence is required the letter of the law may be fulfilled. Colonization (see) of voters is practiced when the party has an excess of voters in one precinct and a lack in another. Sometimes Democrats from Kentucky have crossed the Ohio to assist their brethren in Indiana; and Kansas elections in the early days were decided by voters from Missouri.

FRAUDS ON THE TREASURY. Robbery of the Federal Treasury by false accounts is very rare, because of the complicated system of checks and balances, and the practice of holding federal officials responsible for property and funds till they can prove the transfer to other parties or to the Government. The principal Treasury frauds, therefore, are in the collection of taxes, particularly in customs frauds, such as smuggling, undervaluation (see) and fraudulent claims to refunds and drawbacks (see). In recent years, such frauds have run up to the millions. Frauds in the internal revenue consist usually in evading the collection of the tax on the whole or a part of the output. Moonshine whiskey-that is making whiskey in small and remote unlicensed stills, is one form of fraud. Printing or stamping by manufacturers who have not paid the tax is another form. The whiskey frauds (see) of the seventies are a case in point. Postal service is subject to frauds in the performance of contracted service. The Star Route trials (see) of the early eighties showed instances of stealing amounting to one-half a million. State governments are subject to direct embezzlements by treasurers and tax collectors and to frauds in purchase and pay rolls. They usually have ineffective book keeping checks, and are much less likely then the Federal Government to follow up the wrong-doer with prosecution. The actual losses from fraud are hard to estimate. In the federal service, they are a fraction of one per cent. In some corrupt states and cities the public does not get But some actions falling within our defini- the value of more than one dollar out of two tion are not illegal. Such is the organization appropriated for public purposes. See APof a third party or the nomination of a new PRAISAL OF IMPORTED GOODS FOR Duticket. Here also belongs the stealing of an TIES; ASSESSMENT OF TAXES; FINES AS SOURCES election by the "still hunt." That is, the OF REVENUE; FORFEITURE AS A SOURCE OF minority succeeds in convincing the majority | REVENUE; PUBLIC ACCOUNTS; REVENUE, INparty of its harmlessness and then polls a full TERNAL; REVENUE, PUBLIC, COLLECTION OF; vote at the election so late on election day that its opponents cannot get out their voters. Another device is the canard, or hoax, sprung so late in the campaign that its falsity cannot be exposed.

Other sorts of fraud destroy the efficacy of the ballot after it has been cast. The tissue ballot used in the South after reconstruction is famous. Sometimes ballots are altered or the ballot boxes are stuffed before voting begins. False counts and returns may be made, or ballots may be rejected on trivial grounds. Defective ballots may be fraudulently printed, omitting or shifting the position of names of candidates. New political parties are extemporized in city elections, or new nominations are made to deceive certain classes of voters. Most of these acts are misdemeanors or crimes and their commission is constantly being made more difficult, if not entirely prevented, by better election laws.

CORRUPT

See BRIBERY; COLONIZATION;
PRACTICES ACTS; CORRUPTION; INTIMIDATION;
VOTERS, REGISTRATION OF.

References: P. S. Reinsch, Am. Legislatures
(1907), 231-257; C. A. Beard, Am. Gov. and
Politics (1910), 671-2; J. G. Speed, "How
Votes are Bought in New York City" in Har-
per's Weekly, XLIX (1905), 386-388; J. Bryce,
Am. Commonwealth (4th ed., 1910), II, ch.
lxvii; M. Ostrogorski, Democracy and Party
System (1910), 108, 175–179, 211, 346; J. J.
McCook, "Alarming Proportion of Venal Vot-
ers" in Forum, XIV (1892), 1-13; "Venal
Voting" in ibid, 159-177; A. Shaw, "National
Lesson from Adams County" in Review of Re-
views, XLIII (1911), 171-180; C. L. Jones,
Reading on Parties and Elections (1912), 282-
297.
JESSE MACY.

SMUGGLING; STAR ROUTE TRIALS; SUGAR
FRAUDS; TARIFF ADMINISTRATION; WHISKEY
FRAUDS ON THE REVENUE. Reference: J. Mc-
Donald, Secret of the Great Whiskey Ring
(1880).
A. B. H.

FREE DELIVERY. See POSTAL SYSTEM.

FREE PORTS. At the port of Hamburg, Germany, a large area has been set aside, into which foreign materials may be imported free of duty, and, after being manufactured into finished articles, be exported to foreign markets, though the imported materials or manufactured products for the German home market pay the regular duties. Free ports have been established also at Bremen and Copenhagen. While the United States has no so-called free ports, bonded warehouses have been established into which imported goods may enter in bond and from which they may be withdrawn for shipment to bonded warehouses in other collection districts or for reëxportation to foreign

FREE SEEDS-FREE SOIL PARTY

contest in Congress over the "Wilmot Proviso" (see) caused a rapid growth of sectional feeling in the free states. Newspapers, local leaders, party conventions and non-partisan public meetings pledged themselves with rising excitement to support no candidate for the presidency in 1848 who was not opposed to the further extension of slavery. When the Democratic and Whig parties nominated Lewis Cass (see) and Zachary Taylor (see), respectively, and refused to take any ground whatever on the issue of slavery in the new territories, there sprang up an important movement for a new party in which all opposed to the extension of

FREE SEEDS. See SEEDS, PUBLIC DISTRI- slavery might coöperate. At Buffalo, on Au