CHAPTER XXIX.THE UNITED STATES TREASURY—ITS HISTORY.

The Responsibilities and Duties of the Secretary of the Treasury—“The Most Remarkable Man of His Time”—Three Extraordinary Men—Hamilton Makes an Honest Proposal—How to Pay the National Debt—The New Secretary at Work—Laying the Foundation of Financial Operations—The Mint at Philadelphia—A Little Personal Abuse—The Secretary Borrows Twenty Dollars—Modern Greediness—The Genius Becomes a Lawyer—Burning of Records—Hunting for Blunders and Frauds—The Treasury Building—Treasury Notes go off Nicely—Mr. Crawford Under a Cloud—He Comes out Gloriously—A Little Variety—A Vision of Much Money—Fidgety Times—Lighting the Mariner on His Way—Old Debts Raked Up—Signs of the Times—Under Lincoln—S. P. Chase as Secretary—The National Currency Act—Enormous Increase of the National Debt—Facts and Figures—The Credit of the Government Sustained—President Grant’s Rule—George S. Boutwell made Secretary—Great Expectations—Mr. Boutwell’s Labors, Policy and Success—The Great and Growing Prosperity of the Nation.

After the Declaration of Independence, the first thing that the Continental Congress did was to organize a Treasury Department for the new government of the colonies.

UNITED STATES TREASURY.—WASHINGTON.

Michael Hilligas and George Clymer were appointed Joint-Treasurers of the United Colonies. They were to reside in Philadelphia, and to receive each a salary of five hundred dollars the first year, and to give bonds in the sum of one hundred thousand dollars. The second year their salary was raised to eight hundred dollars each. In a short time George Clymer was sent to Congress as a delegate from Pennsylvania, and Michael Hilligas remainedTreasurer for the Colonies to the close of the Revolution.

In six months after the resignation of Mr. Clymer, a committee of five persons was appointed to assist him to superintend the small Treasury. Three months after, an office was created in which to keep the Treasury accounts. That office was an itinerant, like Congress, following it to whatever place it assembled. Acts were passed for the establishment of a National Mint. Alas! the poor Continentals had no precious ore to coin, and never struck off a dollar or cent. An Auditor General’s office was organized, and John Gibson appointed, with an annual salary of one thousand and sixty-six dollars and sixty-seven cents.

The office of Comptroller of the Treasury was created November 3, 1778, and Jonathan Trumbull, Jr., appointed, with a salary of four thousand dollars. Money was painfully scarce. That made it the more imperative that this poor little empty Treasury should have some supreme responsible head who, by the adroit magic of financial genius, should create a way to fill it, and by some way provide cash for the unprovided-for emergencies which were perpetually imminent. Thus in September, 1781, Congress repealed the act appointing five Commissioners, and in their stead appointed a single supreme “Superintendent of Finance.”

The first high functionary of the Treasury was Robert Morris, of Philadelphia. He had already distinguished himself for his remarkable financial talents as a merchant, and for his devoted patriotism. Besides, he was the intimate friend and confidential adviser of Washington. He was the man for the place and the hour. He kept the creditof the struggling Colonies afloat in their direst moment. He gave from his private fortune without stint, and added thereto the contributions of the infant nation. When even Washington was ready to give up in despair, because he had no money to pay his troops, and the troops were ready to surrender and disband from sheer misery and suffering, Robert Morris applied to “the purser of our allies, the French,” and saved the perishing army and the struggling republic. He proved then, what has been proved so conspicuously since during a still greater struggle, that he who preserves the credit of his country in the hour of its peril is as truly a patriot as he who dies for her sake on the battle-field.

Notwithstanding his benefactions, at the close of the Revolution, the jealousy among foremost men was so great, it was found to be impossible to give to one man the precedence and power in so responsible a place. The claims of the three contending sections were acknowledged by the appointment of three Commissioners: one from the Eastern, one from the Middle, and one from the Southern districts, in the persons of Samuel Osgood, Walter Livingston and Arthur Lee. Robert Morris became a member of the Convention which framed the Constitution of the United States, and concluded his public services to his country as United States Senator.

At the end of three years, the administration of the three Commissioners of Finance had proved so inharmonious and unsuccessful that the country was nearly bankrupt, and the Union of States ready to break into ruins, for lack of money to pay its expenses and hold it together.

The Constitution of the United States went into effectMarch 4, 1789, and Congress went into its first session in the City of New York. Two subjects moved it to its depths at once—the impending bankruptcy of the country, and the location of the National Capital. The prevention of the first depended upon the establishment of the latter. The Nation was impoverished by a long and harassing war, and depressed by an enormous debt which that war had caused. The Nation possessed no statistics indicating the resources of the country, and there was no department organized through which fiscal operations could be carried on.

The strife between the Northern and Southern States, concerning the location of the Capital, made harmonious financial legislation impossible during the opening session of the first Congress. But the committee appointed to organize a system for the collection of the revenue, were equal to its accomplishment. After four months’ deliberation, July 31, 1789, the first important act connected with the Treasury Department was passed, entitled “An act to regulate the collection of the duties imposed by law on the tonnage of ships or vessels, and on goods, wares and merchandise.” September 2, 1789, the fundamental act establishing the Treasury Department was enrolled as a whole, and passed.

The new Department consisted of a Secretary of the Treasury, a Comptroller, an Auditor, a Treasurer, a Registrar, and an assistant to the Secretary of the Treasury. It was decided that the settlement of all public accounts should be in the Treasury Department, making the Secretary of the Treasury the head of the Fiscal Department of the Government, placing him, however, under the authority and requirements of either House of Congress.He superintends the collection and disbursement of the revenue of the United States, from every source derived, except that of the Post Office. He receives the returns of the revenue in general, and reports to Congress all plans of finance, and the final results of his own official action, and that of his subordinates.

The first popular candidate for the position of chief of the Treasury Department was Oliver Wolcott, a son of a signer of the Declaration of Independence, and his own services to his country, both under the Colonial Government and the Union, were acknowledged to have been important. Meanwhile Washington, who was more anxious to find out how he was to get money to pay the public debt, than to find a man to pay it, invited his intimate and tried friend, Robert Morris, to give him the benefit of his advice. In one of their interviews, the great chief groaned out: “What is to be done with this heavy national debt?” “There is but one man,” said the astute financier, “who can help you, and that man is Alexander Hamilton. I am glad that you have given me the opportunity to disclose the extent of the obligation I am under to him.”

In ten days after the establishment of the Treasury Department, Alexander Hamilton was appointed its chief. He was still in the flower of his youth, but had already proved himself, not only in practical action, but in the rarest gifts of pure intellect, to be the most versatile and remarkable man of his time. Of good birth, yet, at twelve years of age, dependent upon his own exertions for support, he bore, at that tender age, the entire responsibility of a large shipping house. He seemed endowed with the quality of intellect which amounts to inspiration—unerring inperception, sure of success. The boy-manager of the shipping house earned his bread in the day time, and in the night wrote articles on commercial matters, equally remarkable for their comprehensiveness and practical knowledge. A native of St. Croix, West Indies, at fourteen he came to the United States; at eighteen, entered Kings, now Columbia College, where he at once attracted attention by his brilliant essays on political subjects. At the beginning of the Revolution, he raised and took command of a company of artillery. The same transcendent intuition which made him supreme as a financier, made him remarkable as a soldier. In Washington’s first interview with him, he made him hisaide-de-camp, and through the entire Revolutionary war, he was called “the right arm” of the Commander-in-chief.

At the close of the war he returned to New York, and stepped at once to the very front of his profession. A more remarkable and interesting group of men probably never discussed and decided the fate of a nation, than Washington, Morris, and Hamilton. Morris, wise, experienced, analytic; Washington, grave, thoughtful, far-seeing, slow to invent, but ready to comprehend, and quick to follow the counsel which his judgment approved; Hamilton, young, impetuous, impassioned, prophetic, yet practical; in comprehension and gifts of creation, the supreme of the three. Never was a nation more blessed than this, in the united quality of the men who decided its financial destiny.

The first official act of Hamilton, as Secretary of the Treasury, was to recommend that the domestic and foreign war debt be paid, dollar for dollar. When the paper containing this recommendation was read before Congress,it thought that the new Secretary of the Treasury had gone mad. How was a nation of less than four millions of people to voluntarily assume a debt of seventy-five millions of dollars! Hamilton thought that this aggregated debt, created for the support of the national cause, should be assumed by the individual States; the outstanding Continental money to be funded at the rate of one dollar in specie for each hundred in paper, and the whole united to make the national resources available for the security of the public creditors.

The long strife in Congress over this great fundamental financial question is a matter of history. There appeared to be no national resources to meet such a demand. There was not money enough in the Treasury to pay current expenses, to say nothing of paying a debt of tens of millions. Probably no body of legislators in the world ever represented wisdom, statesmanship, pertinacity of opinion so tried in the fiery crucible of war, poverty and suffering, as did this first Congress; yet it was left to the untried minister of finance of thirty-three to save the national credit against mighty odds, and to foresee and to foretell the future resources of a vast, consolidated people. This inspiration of enthusiasm and faith, combined with practical administrative force, and a broad financial policy, averted the horrors of national bankruptcy, preserved the credit of the government, and gave to the sufferings of Valley Forge and the surrender at Yorktown their final fruition.

The young financier, bearing his burden alone, seemed to hold in himself the guarantee of future triumph. He gave to the most despairing a security of success when they remembered that, at the age of nineteen, this sameyoung prophet and patriot was the “right hand” of Washington.

The long struggle ended in the adoption of Hamilton’s great financial scheme of funding the domestic debt.

When the government was removed to Philadelphia, the Treasury was established in a plain building in Arch street, two doors east from Sixth. Here Morris, Hamilton and Washington were united in the closest bonds of personal friendship. Then followed, in rapid succession, those great state-papers on finance from Hamilton, whose embodiment into laws fixed the duties on all foreign productions, and taxed with just distinction the home luxuries and necessities of life. From these were evolved in gradual development the entire system of the Treasury Department of the United States. Time has proved how perfect were the plans which sprang without precedent from the brain of Alexander Hamilton.

First, from his suggestions came the act which established the routine by which customs were to be collected. Then came the acts for the levying of taxes and the accumulation of the revenue. Then the imposition on ships and our commercial marine, foreign and domestic. Next, a bank was established for the depository of collected funds, and their distribution throughout the country. Then was needed the crown of the grand financial structure—a legalized institution for the coinage of gold and silver. To accomplish this great design, Hamilton recommended for the adoption of Congress the establishment of a mint for the purposes of national coinage, and the act was passed April 2, 1792, fixing the establishment at the then seat of government, Philadelphia, from whence, through later legislation, it has never been transferred.

While consuming himself for his country, Hamilton was harassed by the abuse of personal and political enemies, and suffering for the adequate means to support his family. While building up the financial system which was to redeem his country, the state of his own finances may be judged by the following letter from him to a personal friend, dated September 30, 1791:

“Dear Sir:—If you can conveniently let me have twenty dollars for a few days, send it by bearer.A. H.”

“Dear Sir:—If you can conveniently let me have twenty dollars for a few days, send it by bearer.

A. H.”

The amount of personal toil he performed for the government was enormous. Talleyrand, who was at this time a refugee in Philadelphia, after his return to France, spoke with admiring enthusiasm of the young American patriot. In speaking of his experience in America, he once said:

“I have seen in that country one of the wonders of the world—a man, who has made the future of the Nation, laboring all night to support his family.”

Nobody believes that any servant of his country should be compelled to this, to-day, yet had not long-sufficed selfishness made them insensible to it, the over-greedy legislator of to-day might learn from the example of Alexander Hamilton a salutary lesson.

After six years of personal service in the Treasury, amid personal and political opposition, greater than has ever assailed any one statesman; after seeing his financial system a part of the governmental policy of his country, Hamilton resigned his office, and resumed the practice of law in the city of New York.

Established in that day of small things, in human judgment it seems impossible that the brain of one man couldhave devised a monetary system that would anticipate all the varied, conflicting and unexpected demands of a country as large and swiftly developed as ours. Yet, with slight modifications, the system of Hamilton has met all exigencies, saved the national credit, and assured the national prosperity through the deepest trials. It paid the national debt of the Revolution, and of 1812, and in the War of the Rebellion, when the governmental expenses of a single day were more than the national income for a whole year in Hamilton’s time, the foresight and genius of this man of thirty-three had suggested ways for the vast accumulation and disbursement. Personally, Hamilton was under middle size, slight, well-proportioned, erect and graceful. His complexion was white and pink, his features mobile, his expression vivacious, his voice musical, his manner cordial, his entire appearance attractive and refined.

Alexander Hamilton was succeeded by Oliver Wolcott, Jr., as Secretary of the Treasury. The great act of Mr. Wolcott’s administration was the revision and completion of the laws relative to the collection of the revenue. He carried out, through his administration, the great fundamental principles of national finance established by Hamilton, and was re-appointed by John Adams.

When, in 1800, the Treasury Department performed its six days’ journey from Philadelphia to Washington, it went into a plain, three-story building, facing Fifteenth street, erected for the Treasury. It was near the unfinished White House, and, like all the first Federal buildings, plain and small. It was so small, when first taken possession of, that it did not even afford sufficient room for the clerical force, then fifty in number. Its cramped space made itnecessary to deposit all the official records brought from Philadelphia in a house known as Sears’ store, and the records, which would now be invaluable, were all consumed.

The first official act of the Treasury Department of national interest, dated at the national capital, directed that the Secretary should make an annual report to Congress of the state of the finances of the nation, containing estimates of the public revenue and expenditure, as well as plans for improving and increasing the revenues. Hamilton had done this voluntarily, and his example, of a Cabinet officer making communications with Congress, was now made imperative by the action of law. May 10, 1800, Samuel Dexter, another signer of the Declaration of Independence, was appointed Secretary of the Treasury in place of Oliver Wolcott. On the election of Jefferson, the foe of the Hamiltonian financial policy, the Washingtonian era of the Federal Government ended, and Mr. Dexter found himself out of harmony with the Government. After the lapse of a year, President Jefferson set the precedent of removal, and, January 26, 1802, appointed Albert Gallatin, Secretary of the Treasury.

Albert Gallatin was born in Geneva, Switzerland, in 1761. After receiving a liberal education, he came to this country at the age of eighteen. He became a tutor in Harvard College, but removing to Philadelphia, then the national capital, rose so high in public esteem that in 1790, at the age of thirty, he was elected to Congress, and afterwards to the Senate. In this body, his reports on matters of finance attracted universal attention, and, as a result, he was made Secretary of the Treasury of the United States. President Jefferson, on handing him hiscommission, said: “Mr. Gallatin, your most important duty will be to examine the accounts, and all the records of your department, in order to discover the blunders and frauds of Hamilton, and to ascertain what changes will be required in the system. This is a most important duty, and will require all your industry and acuteness. To do it thoroughly, you may employ whatever extra service you require.”

Gallatin was an ardent partisan of the President, and declares, himself, that he undertook his task of exposing Hamilton, and bringing his lofty head low, with great zest and thoroughness. But his hunt for “blunders” and venality merged soon into a labor of love. Upon his just and comprehensive mind, Hamilton’s perfect system, day by day, revealed itself. By the time he had mastered its details, and measured its completeness, he was filled with admiration. “In the honest enthusiasm of a truly great mind he went to Mr. Jefferson and said: ‘Mr. President, I have, as you directed, made a thorough examination of the books, accounts and correspondence of my department, from its commencement. I have found,’ said the conscientious Secretary, ‘the most perfect system ever formed. Any change under it would injure it.’ Hamilton made no blunders, committed no frauds; he did nothing wrong.”

Albert Gallatin marked his administration by a series of reports regarding the best method of canceling the national debt, the proper policy of disposing of the public lands, and the legality and necessity of establishing a national bank. Thus, contrary to his original intention, he associated himself with Morris and Hamilton as one of the three founders of the financial policy of the nation.

By the year 1804, the business of the Treasury had so increased, that an effort was made toward the erection of a building, to become the especial depository of the records. An idea may be given of the demands of the infant government and its notions of economy, in the facts that this vaunted fire-proof public building is much smaller than an unpretentious private dwelling of the present time, and that it cost less than the sum of twelve thousand dollars.

Mr. Madison, on his accession to the Presidency, retained Mr. Gallatin at the head of the Treasury.

On March 1, 1809, an act of Congress directed that all warrants drawn on the Treasury by the Secretaries of the different executive departments, should designate the appropriation to which they were charged.

June 18, 1812, war was declared, and Congress was convened in special session, to consider the necessities of the Treasury. Out of the legislation which followed, came our present internal revenue laws. Mr. Gallatin, after having held his office longer than any of his predecessors, resigned, and went on a foreign mission. A period of extreme money depression succeeded his resignation. August 24, 1814, the British troops entered Washington, and, with the Capitol and other public buildings, burned the Treasury. The business of the Treasury, for a considerable time afterwards, was carried on in what was known as “the Seven Buildings,” in the western part of the city.

George N. Campbell, of Tennessee, Mr. Gallatin’s successor, attempted to negotiate a loan of twenty-five millions of dollars, but failed, and resigned his office. The national credit was at its lowest ebb.

When the need of a great man is absolute, Providence usually has one ready for the emergency. He appeared at this crisis, in the person of Alexander J. Dallas, of Pennsylvania. On entering upon his office, as head of the Treasury, he replied to the request of Congress, that he should suggest ways for the restoration of the public credit, in one of the most powerful documents extant in the archives of the Treasury. Mr. Dallas so inspired the faith of the capitalists of the country, that the national credit was at once restored. “The Treasury notes, issued on the universal opinion that they would be a drug in the market, rose to a premium.”

Mr. Monroe made W. H. Crawford, of Georgia, Secretary of the Treasury. Under him, the routine of the Department was improved by the appointment of a second Comptroller and four additional Auditors. Charges of malfeasance were brought against him toward the close of his term of office. They were examined by a committee consisting of John Randolph, Edward Livingston, and Daniel Webster, who pronounced the charges false. President John Quincy Adams recalled Richard Rush, of Pennsylvania, then Minister to England, and made him Secretary of the Treasury.

Under Andrew Jackson’s Presidency, the conservative management of the Treasury Department changed into “the anti-bank period.” His administration was marked by five different Secretaries, and a prevailing state of excitement. The first Secretary of the Treasury, under Jackson, was Samuel D. Ingham, of Pennsylvania, whose trust ended in a violent breaking up of the Cabinet. He was succeeded by William J. Doane, of Pennsylvania, who refused to remove the national deposits from the UnitedStates Bank, and was dethroned by Roger B. Taney, of Maryland. The Senate refused to confirm his appointment, and Levi Woodbury, of New Hampshire, was installed in the office, holding it to the end of Jackson’s administration.

April 1, 1833, the Treasury Building was for the third time destroyed by fire, and a large amount of valuable public documents destroyed. Afterwards, the business of the Department was carried on in a row of brick buildings opposite Willard’s Hotel. At this time the “Agent of the Treasury,” was changed to Solicitor of the Treasury, and a sixth Auditor was created. Jackson’s administration closed with an “apparent plethora of money among the people, and the glorious consummation of paying off the national debt.”

Mr. Woodbury continued at the head of the Treasury, under President Van Buren. It was his fate to be its director “in the times of unparalleled plenty, speculation and extravagance, and two years afterwards, to witness a pecuniary revulsion that had no precedent in financial history.” In 1837, financial ruin dismayed the Nation. Congress was convened by special proclamation, to devise ways and means to relieve the people. Specie payments were suspended, and all business involved in apparent ruin. Binding laws were passed, divorcing the Government from all banking institutions, and a new policy was created for the control of our national finances.

Under Presidents Harrison and Tyler there were five Secretaries of the Treasury: Thomas Ewing, of Ohio; WalterHowardHoward, of Pennsylvania; John C. Spencer, of New York, and George M.BebleBeble, of Kentucky. President Polk made Robert J. Walker the head of the Treasury.He was known as “the apostle of free trade.” His administration was marked by the introduction of the present warehousing system, based upon English precedent; by his reciprocity system between Canada and the United States abolishing all customs and imports, and the establishment of an “Interior Department” upon the old overgrown Land Office, with a Cabinet officer to administer its affairs, under the title of Secretary of the Interior.

The Secretary of the Treasury, under President Taylor, was William M. Meredith, of Pennsylvania; who was succeeded, under President Fillmore, by Thomas Corwin, of Ohio. Secretary Corwin established the present lighthouse department and wrote the instructions regarding light-vessels, beacons and buoys. This beneficent legislation gave over six hundred lights to protect the hitherto neglected mariner on his way.

The Chief of the Treasury under President Pierce, was James Guthrie, of Kentucky. He is remembered as a strict and efficient officer, carrying out in minutiæ, the duties and laws of the department. He discovered outstanding balances against the Treasury, which, if collected, would more than pay the national debt. Of this sum he collected hundreds of millions into the Treasury, and raised the standard of efficiency in the Treasury service by demanding monthly, instead of quarterly reports, from all itsemployés.

Three Secretaries of the Treasury served under James Buchanan—Howell Cobb, of Georgia; Philip F. Thomas, of Maryland; and John A. Dix, of New York. A monetary crisis, almost as severe as that of 1837, marked this administration. The throes of Secession shook the Union to its foundation, and the Secretaries of the Treasury,like all other public servants, were occupied with the “signs of the times,” the swiftly advancing portents of revolution, more than with the mere financial duties of the public Treasury.

Abraham Lincoln began his troubled administration by the appointment of Salmon P. Chase, of Ohio, as Secretary of the Treasury. Never was man asked to help steer the ship of state through more overwhelming breakers. With the dissolution of the Union imminent, the national debt had increased to three times the amount it was at the close of the previous administration. The number of clerks which, in 1861, was three hundred and eighty-three, in 1864 was two thousand. Such a demand was without precedent, and arose from the immense labor of examining accounts, and of preparing and supervising the national currency and securities.

The first important measure of Mr. Chase’s administration was the “Internal Revenue Act,” which, in four years, increased the income of the Government from forty-one millions to three hundred and nine millions. Next came the great “National Currency Act,” which, though severely criticised, and probably not free from defects, nevertheless established a paper currency of equal value in every part of the Union, and was, at least, in keeping with the principles of our Government, and freer from chances of corruption and abuse than any other system yet adopted. It met the awful demand of the hour, and offered the guarantee of redemption, rather than of loss and ruin.

In a single month, the tax upon the income of the Treasury became stupendous. In one day, it paid out for quartermasters’ stores alone, forty-six millions of dollars—morethan were needed to support the entire National Government during the first year of Washington’s administration. In four years, the public debt, from ninety millions, had grown to be two thousand six hundred millions—yet under this mighty demand, with two millions of its sons withdrawn from productive labor, the exports of the country were double what they had ever been before, and the credit of the Government of the United States day by day increased.

When Mr. Chase was appointed Chief Justice by Mr. Lincoln, his high seat in the Treasury was taken by Hon. William Pitt Fessenden, whose brief career as Secretary of the Treasury was marked by a single State paper of great ability. He was succeeded by Hugh McCulloch, of Indiana, who dispensed the duties of his office creditably till the close of Johnson’s administration.

President Grant, upon his accession to the Presidency, chose George S. Boutwell, of Massachusetts, to be Secretary of the Treasury. Mr. Boutwell had already served as Commissioner of Internal Revenue, and now on him devolved the huge task of reducing the high impost and revenue tax created by the war debt, and borne as a mighty burden by the people. He had to lighten the load on the people’s shoulders, and yet keep the national tax high enough to meet the interest, and reduce the amount of the national debt—in fine, he was expected to relieve the Nation, and to pay the national debt at the same time. A more conflicting demand never rested on a Financial Minister. How ably he met it, the “monthly statement” of the perpetual ebb of the war debt, with the constant legislation to reduce all revenue taxation to the luxuries of life, were ample proof.

Before the election of Mr. Boutwell, as United States Senator from Massachusetts, to succeedVice-PresidentVice-PresidentHenry Wilson, the President appointed Judge Richardson, Acting Assistant Secretary, to be Secretary of the Treasury. Judge Richardson stepped from comparative obscurity, and an opposite sphere of labor, to his present high official position. There are many who challenge his claim to it, and his fitness for it. Time may prove one, and disprove the other. As Secretary of the Treasury, his official record is yet to be made—until his administration has been marked by an act of national importance, it is too early to pronounce a verdict.

In the statistics of the Treasury Department, we read the marvellous financial history of our country. In them we trace the material progress of the Nation from its beginning. In the accounts current business of the country, we learn that in the years 1793, ’94, ’95, ’96, the Nation imported productions valued at one hundred and seventy-four millions of dollars. In the years 1866, ’67, ’68, ’69, the United States exported values to the amount of nineteen hundred millions. The value between these sums marks the growth of population, territory, and material resources in the space of seventy years—surely, a narrow span in the life of a nation!

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