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 in perception, 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 his aide-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 same young 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.