The Department of Treasury is a cabinet department within the United States Executive Branch. It is managed by a secretary that is appointed by the president. The Department of Treasury was formed in 1789. The department’s mission is to improve, regulate and provide reports to Congress on the United States’ revenue, expenditures and public credit.
After Washington’s election, the First Federal Congress debated whether to have the Treasury controlled by a board or one secretary. Congress determined that a secretary should be appointed by the president. On September 11, 1789, the Senate confirmed Alexander Hamilton as the first secretary of the Treasury.
Hamilton wanted to create a prosperous economy. He introduced a financial program that included creating a consolidated national debt (as opposed to individual state debts), federal excise taxes to service the debt, and a national bank. Based on the Bank of England, the Bank of the United States would act as a central place for taxes, transfers, banknotes, and currency to be held and regulated. In addition, the bank would allow the young nation to provide more financial services and programs to promote business as well as have resources in the case of an economic or national emergency. Hamilton proposed the National Bank, which was formally introduced in Congress as the Bank Bill of 1791.
The Bank Bill faced widespread opposition, from Thomas Jefferson then secretary of state, and James Madison. Madison wrote to President Washington expressing his opposition because it provided power to the federal government not mentioned specifically in the Constitution. Washington would not support the Bank Bill until Hamilton responded to the arguments of Jefferson and Madison. Hamilton grounded authority for the bank in the “necessary and proper” clause of Article I, Section 8 of the Constitution.” Washington sided with Hamilton’s argument and signed the Bank Bill into law on February 25, 1791.
The debate over the National Bank ultimately fractured the government into the first political parties, the Democratic-Republicans led by Jefferson and Madison and the Federalist led by Hamilton. Despite this and later controversies, the Department of Treasury has played a vital role in ensuring the financial stability of the United States.
Source: Department of the Treasury
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