Let q be an infinitely differentiable function of period t. Then the spectrum of Hill's operator Q = -d2/dx 2 +q(x) in the class of functions of period 2 is a discrete series -.:~.~ < 20 < 21 <)o~ < 23 < 24 <... < '~2i-1 ~ )~2 iT ~'v. Let the number of simple eigenvalues be 2n+ 1 < oc. Borg El] proved that n=0 if and only if q is constant. Hochstadt [21] proved that n= 1 if and only if q = c + 2p with a constant c and a Weierstrassian elliptic function p. Lax [29] notes that n=m if ~ q=4k2K2m(m+l)snZ(2Kx, k). The present paper studies the case n< oo, continuing investigations of Borg Eli, Buslaev and Faddeev [2], Dikii [3, 4], Flaschka [10], Gardner et al. [12], Gelfand [13], Gelfand and Levitan [14], Hochstadt [21], and Lax[28-30] in various directions. The content may be summed up in the statement that q is an abelian function; in fact, from the present standpoint, the whole subject appears as a part of the classical function theory of the hyperetliptic irrationality f(~) = IS-(~-,~o) (:~-;,1)...(,~-,~2,).The case n = oo requires the development of the theory of abelian and theta functions for infinite genus; this will be reported upon in another place. Some of the results have been obtained independently by Novikov [34], Dubrovin and Novikov [6] and A. R. Its and V.B. Matveev [22].