Originally, stars were added when each state was added to the union, but during the 1800's when the number of states being added was more rapid, it became difficult and expensive to continuously update the flag every time a new state was added. So the decision was made to only add new stars and introduce a new design for the flag once a year - July 4th.
This has rarely been an issue of late, except in 1959. In 1959, both Alaska and Hawaii joined the union (and for naysayers of current American Foreign policy, Alaska was added before oil was discovered). Alaska entered on Jan 3rd; Hawaii not until August 21st. So on July 4th, 1959 a new flag was introduced with 49 stars. It was not until 1960 when the current 50 star design was introduced.
And for those of your wondering about what will happen if they ever made DC a state (Taxation without Representation!) or if Puerto Rico ever decides they want to be a state, instead of a commonwealth/territory/colony/independent republic/whatever its designation really is, designs to exist for flags with more than 50 states:
The 70 star design I am sure was created in case we invade Canada. Guess we should be prepared.
Happy 4th!
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