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The 1898 Treaty of Paris created new, US territories whose residents remain liminal members of the American polity. Puerto Rico, the closest and most populous territory, is the most obvious example, despite three recent federal task forces (2005, 2007, 2011) ostensibly settling its political and constitutional status. This paper traces the legal and congressional developments of Puerto Rico and makes three points: (1) the US territories effectively remain colonies, subject to the plenary power of the US government, contrary to the premise of a federal republic; (2) they have remained dependencies, especially because of national security, as with Puerto Rico in the early 20th century and Guam since WWII; (3) the spatial discrimination against the US territories—whose citizens enjoy the full privileges of US citizenship should they reside in one of the states—amounts to ethnic and racial discrimination, notwithstanding the Supreme Court’s efforts to obscure this reality.