The history of the Department of the Treasury began in the turmoil of the American Revolution, when the Continental Congress at Philadelphia deliberated the crucial issue of financing a war of independence against Great Britain. The Congress had no power to levy and collect taxes, nor was there a tangible basis for securing funds from foreign investors or governments. The delegates resolved to issue paper money in the form of bills of credit, promising redemption in coin on faith in the revolutionary cause. On June 22, 1775—only a few days after the Battle of Bunker Hill—Congress issued $2 million in bills; on July 25, 28 citizens of Philadelphia were employed by the Congress to sign and number the currency.
On July 29, 1775, the Second Continental Congress assigned the responsibility for the administration of the revolutionary government's finances to joint Continental treasurers George Clymer and Michael Hillegas. The Congress stipulated that each of the colonies contribute to the Continental government's funds. To ensure proper and efficient handling of the growing national debt in the face of weak economic and political ties between the colonies, the Congress, on February 17, 1776, designated a committee of five to superintend the Treasury, settle accounts, and report periodically to the Congress. On April 1, a Treasury Office of Accounts, consisting of an Auditor General and clerks, was established to facilitate the settlement of claims and to keep the public accounts for the government of the United Colonies. With the signing of the Declaration of Independence on July 4, 1776, the newborn republic as a sovereign nation was able to secure loans from abroad.
Despite the infusion of foreign and domestic loans, the united colonies were unable to establish a well-organized agency for financial administration. Michael Hillegas was first called Treasurer of the United States on May 14, 1777. The Treasury Office was reorganized three times between 1778 and 1781. The $241.5 million in paper Continental bills devalued rapidly. By May 1781, the dollar collapsed at a rate of from 500 to 1000 to 1 against hard currency. Protests against the worthless money swept the colonies, giving rise to the expression "not worth a Continental".
Robert Morris was designated Superintendent of Finance in 1781 and restored stability to the nation's finances. Morris, a wealthy colonial merchant, was nicknamed "the Financier" because of his reputation for procuring funds or goods on a moment's notice. His staff included a comptroller, a treasurer, a register, and auditors, who managed the country's finances through 1784, when Morris resigned because of ill health. The treasury board, consisting of three commissioners, continued to oversee the finances of the confederation of former colonies until September 1789.
Hamilton and the Establishment of the Department of the Treasury[edit]
Original seal, dating from before 1968
The First Congress of the United States was called to convene in New York on March 4, 1789, marking the beginning of government under the Constitution. On September 2, 1789, Congress created a permanent institution for the management of government finances:
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That there shall be a Department of Treasury, in which shall be the following officers, namely: a Secretary of the Treasury, to be deemed head of the department; a Comptroller, an Auditor, a Treasurer, a Register, and an Assistant to the Secretary of the Treasury, which assistant shall be appointed by the said Secretary.[12]
Alexander Hamilton took the oath of office as the first Secretary of the Treasury on September 11, 1789. Hamilton had served as George Washington's aide-de-camp during the Revolution and was of great importance in the ratification of the Constitution. Because of his financial and managerial acumen, Hamilton was a logical choice for solving the problem of the new nation's heavy war debt. Hamilton's first official act was to submit a report to Congress in which he laid the foundation for the nation's financial health.
To the surprise of many legislators, he insisted upon federal assumption and dollar-for-dollar repayment of the country's $75 million debt in order to revitalize the public credit: "[T]he debt of the United States was the price of liberty. The faith of America has been repeatedly pledged for it, and with solemnities that give peculiar force to the obligation."[13] Hamilton foresaw the development of industry and trade in the United States, suggesting that government revenues be based upon customs duties.[13] His sound financial policies also inspired investment in the Bank of the United States, which acted as the government's fiscal agent.[citation needed]
The Treasury believes their seal was created by Francis Hopkinson, the Treasurer of Loans. He submitted bills to Congress in 1780 that authorized the design of department seals, including the seal for the Board of Treasury. While it is it not certain that Hopkinson designed the seal, it is very similar to others he's done.[14]
Congress transferred several agencies that had previously been under the aegis of the Treasury department to other departments as a consequence of the September 11, 2001 terrorist attacks. Effective January 24, 2003, the Bureau of Alcohol, Tobacco and Firearms (ATF), which had been a bureau of the Department since 1972, was extensively reorganized under the provisions of the Homeland Security Act of 2002. The law enforcement functions of ATF, including the regulation of legitimate traffic in firearms and explosives, were transferred to the Department of Justice as the Bureau of Alcohol, Tobacco, Firearms, and Explosives (BATFE). The regulatory and tax collection functions of ATF related to legitimate traffic in alcohol and tobacco remained with the Treasury at its new Alcohol and Tobacco Tax and Trade Bureau (TTB).
The Department of the Treasury is organized into two major components: the Departmental offices and the operating bureaus. The Departmental Offices are primarily responsible for the formulation of policy and management of the Department as a whole, while the operating bureaus carry out the specific operations assigned to the Department.
The Alcohol and Tobacco Tax and Trade Bureau (TTB) is responsible for enforcing and administering laws covering the production, use, and distribution of alcohol and tobacco products. TTB also collects excise taxes for firearms and ammunition.
The Bureau of the Fiscal Service was formed from the consolidation of the Financial Management Service and the Bureau of the Public Debt. Its mission is to promote the financial integrity and operational efficiency of the U.S. government through exceptional accounting, financing, collections, payments, and shared services.
The Community Development Financial Institution (CDFI) Fund was created to expand the availability of credit, investment capital, and financial services in distressed urban and rural communities.
The Financial Crimes Enforcement Network (FinCEN) supports law enforcement investigative efforts and fosters interagency and global cooperation against domestic and international financial crimes. It also provides U.S. policy makers with strategic analyses of domestic and worldwide trends and patterns.
The Inspector General
The Inspector General conducts independent audits, investigations and reviews to help the Treasury Department accomplish its mission; improve its programs and operations; promote economy, efficiency and effectiveness; and prevent and detect fraud and abuse.
The Treasury Inspector General for Tax Administration (TIGTA) provides leadership and coordination and recommends policy for activities designed to promote economy, efficiency, and effectiveness in the administration of the internal revenue laws. TIGTA also recommends policies to prevent and detect fraud and abuse in the programs and operations of the IRS and related entities.
The Internal Revenue Service (IRS) is the largest of Treasury's bureaus. It is responsible for determining, assessing, and collecting internal revenue in the United States.
The Office of the Comptroller of the Currency (OCC) charters, regulates, and supervises national banks to ensure a safe, sound, and competitive banking system that supports the citizens, communities, and economy of the United States.
The U.S. Mint designs and manufactures domestic, bullion and foreign coins as well as commemorative medals and other numismatic items. The Mint also distributes U.S. coins to the Federal Reserve banks as well as maintains physical custody and protection of the nation's silver and gold assets.
The Treasury Department was authorized a budget for Fiscal Year 2015 of $22.6 billion. The budget authorization is broken down as follows:[22]
Program
Funding (in millions)
Employees (in FTEs)
Management and Finance
Department Administration
$311
1,320
Office of the Inspector General
$35
213
Inspector General for Tax Administration
$157
837
Special Inspector General for TARP
$34
192
Community Development Financial Institutions Fund
$225
73
Financial Crimes Enforcement Network
$108
346
Alcohol and Tobacco Tax and Trade Bureau
$101
517
Bureau of the Fiscal Services
$348
2,350
Tax Administration
Internal Revenue Service
$12,476
92,009
International Programs
International Programs
$2,610
0
Non-Appropriated Bureaus
Office of Fiscal Stability
$184
86
Small Business Lending Programs
$17
25
State Small Business Credit Initiative
$7
12
Financial Stability Oversight Council
$20
26
Office of Financial Research
$92
249
Bureau of Engraving and Printing
$749
1,944
United States Mint
$3,571
1,874
Office of the Comptroller of the Currency
$1,104
3,997
TOTAL
$22,583
106,080
Freedom of Information Act processing performance[edit]
In the latest Center for Effective Government analysis of the fifteen federal agencies that receive the most Freedom of Information Act FOIA requests, published in 2015 (using 2012 and 2013 data, the most recent years available), the Treasury failed to earn a satisfactory overall grade.[23]
^Terrorism and Financial Intelligence, "About Terrorism and Financial Intelligence". U.S. Dept. of the Treasury. July 2, 2012. Accessed November 11, 2012.
Annual Reports of the Secretary of the Treasury on the State of Finances – These annual reports also contain the reports of the many departments of the Treasury, including the Bureau of the Mint, Bureau of Engraving and Printing, Bureau of Customs, Office of the Comptroller of the Currency, Secret Service, and the Internal Revenue Service.
The United States Department of State (DOS), commonly referred to as the State Department, is a federal executive department responsible for carrying out U.S. foreign policy and international relations. Established in 1789 as the nation's first executive department, its duties include advising the U.S. President, administering the nation's diplomatic missions, negotiating treaties and agreements with foreign entities, and representing the U.S. at the United Nations.
United States Secretary of the Treasury
The secretary of the treasury is the head of the United States Department of the Treasury which is concerned with all financial and monetary matters relating to the federal government, and, until 2003, also included several major federal law enforcement agencies. This position in the federal government of the United States is analogous to the minister of finance in many other countries. The secretary of the treasury is a member of the president's Cabinet, and is nominated by the president of the United States. Nominees for secretary of the treasury undergo a confirmation hearing before the United States Senate Committee on Finance before being voted on by the United States Senate.
Treasurer of the United States
The Treasurer of the United States is an official in the United States Department of the Treasury who was originally charged with the receipt and custody of government funds, though many of these functions have been taken over by different bureaus of the Department. Responsibility for oversight of the Bureau of Engraving and Printing, the United States Mint, and the United States Savings Bonds Division was assigned to the Treasurer in 1981. As of 2002 the Office of the Treasurer underwent a major reorganization. The Treasurer now advises the Director of the Mint, the Director of the Bureau of Engraving and Printing, the Deputy Secretary and the Secretary of the Treasury on matters relating to coinage, currency and the production of other instruments by the United States.
National debt of the United States
The national debt of the United States is the total debt, or unpaid borrowed funds, carried by the Federal Government of the United States, which is measured as the face value of the currently outstanding Treasury securities that have been issued by the Treasury and other federal government agencies. The terms "national deficit" and "national surplus" usually refer to the federal government budget balance from year to year, not the cumulative amount of debt. A deficit year increases the debt, while a surplus year decreases the debt as more money is received than spent.
Finance minister
A finance minister is an executive or cabinet position in charge of one or more of government finances, economic policy and financial regulation. It may also be a junior minister in the finance department, the British Treasury, for example has four junior ministers.
Treasurer of Australia
The Treasurer of Australia is the minister in the Government of Australia responsible for government expenditure and revenue raising. The Treasurer plays a key role in the economic policy of the government. The current holder of the position is Josh Frydenberg, whose term began on 24 August 2018.
Symbols of the United States Department of the Treasury
Symbols of the United States Department of the Treasury include the Flag of the Treasury Department and the U.S. Treasury Seal. The seal actually predates the department itself, having originated with the Board of Treasury during the period of the Articles of Confederation. The seal is used on all U.S. paper currency, and on official Treasury documents.
Bureau of the Public Debt
The Bureau of the Public Debt was an agency within the Fiscal Service of the United States Department of the Treasury. United States Secretary of the Treasury Timothy Geithner directed the Bureau be combined with the Financial Management Service into the single Bureau of the Fiscal Service in 2012.
Early American currency
Early American currency went through several stages of development during the colonial and post-Revolutionary history of the United States. Because few coins were minted in the thirteen colonies that became the United States, foreign coins like the Spanish dollar were widely circulated. Colonial governments sometimes issued paper money to facilitate economic activities. The British Parliament passed Currency Acts in 1751, 1764, and 1773 that regulated colonial paper money.
United States federal budget
The United States federal budget comprises the spending and revenues of the U.S. federal government. The budget is the financial representation of the priorities of the government, reflecting historical debates and competing economic philosophies. The government primarily spends on healthcare, retirement, and defense programs. The non-partisan Congressional Budget Office provides extensive analysis of the budget and its economic effects. It has reported that large budget deficits over the next 30 years are projected to drive federal debt held by the public to unprecedented levels—from 78 percent of gross domestic product (GDP) in 2019 to 144 percent by 2049. The United States has the largest external debt in the world and the 14th largest government debt as % of GDP in the world.
Department of Finance (Philippines)
The Philippines' Department of Finance (DOF) is the executive department of the Philippine government responsible for the formulation, institutionalization and administration of fiscal policies, management of the financial resources of the government, supervision of the revenue operations of all local government units, the review, approval and management of all public sector debt, and the rationalization, privatization and public accountability of corporations and assets owned, controlled or acquired by the government.
History of the United States public debt
The history of the United States public debt started with federal government debt incurred during the American Revolutionary War by the first U.S treasurer, Michael Hillegas, after its formation in 1789. The United States has continuously had a fluctuating public debt since then, except for about a year during 1835–1836. To allow comparisons over the years, public debt is often expressed as a ratio to gross domestic product (GDP). Historically, the United States public debt as a share of GDP has increased during wars and recessions, and subsequently declined.
First Report on the Public Credit
The First Report on the Public Credit was one of four major reports on fiscal and economic policy submitted by American Founding Father and first United States Treasury Secretary Alexander Hamilton on the request of Congress. The report analyzed the financial standing of the United States of America and made recommendations to reorganize the national debt and to establish the public credit. Commissioned by the House of Representatives on September 21, 1789, the Report was presented on January 9, 1790, at the second session of the First US Congress. The 40,000 word document called for full federal payment at face value to holders of government securities ("Redemption") and the national government to assume funding of all state debt ("Assumption") The political stalemate in Congress that ensued led to the Compromise of 1790, locating the permanent US capital on the Potomac River ("Residency").
Secretariat of Finance and Public Credit
The Office for the Treasury and Public Credit is the finance ministry of Mexico. In Mexico the Treasurer of the Republic is the head of the Office for the Treasury and Public Credit, and is a member of the federal executive cabinet and is named to the post by the President of the Republic. Recently, the institution has been promoting a financial inclusion policy and is now a member of the Alliance for Financial Inclusion. This position is analogous to the Secretary of the Treasury in the United States of America or to the finance ministers of other nations.
Proposes and directs the Federal Government’s economic policy as regards finances, tax, spending, income and public debt and statistics, geography and information, in order to ensure quality, equitable, inclusive and sustained economic growth.
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