United States Department of the Treasury

Revolutionary Period

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

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.^[11]

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."^[12] Hamilton foresaw the development of industry and trade in the United States, suggesting that government revenues be based upon customs duties.^[12] His sound financial policies also inspired investment in the Bank of the United States, which acted as the government's fiscal agent.

2003 Reorganization

Treasury Building

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).

Effective March 1, 2003, the Federal Law Enforcement Training Center, the United States Customs Service, and the United States Secret Service were transferred to the newly created Department of Homeland Security ("DHS").

Basic functions

The basic functions of the Department of the Treasury mainly include:^[13]

• Producing all currency and coinage of the U.S.;
• Collecting taxes, duties and money paid to and due to the U.S.;
• Paying all bills of the U.S.;
• Managing the federal finances;
• Managing government accounts and the United States public debt;
• Supervising national banks and thrift institutions;
• Advising on domestic and international financial, monetary, economic, trade and tax policy (fiscal policy being the sum of these);
• Enforcing federal finance and tax laws;
• Investigating and prosecuting tax evaders;
• Publishing statistical reports.

With respect to the estimation of revenues for the executive branch, Treasury serves a purpose parallel to that of the Office of Management and Budget for the estimation of spending for the executive branch, the Joint Committee on Taxation for the estimation of revenues for Congress, and the Congressional Budget Office for the estimation of spending for Congress.

From 1830 until 1901, responsibility for overseeing weights and measures was carried out by the Office of Standard Weights and Measures under the auspices of the Treasury Department.^[14] After 1901, responsibility was assigned to the agency that subsequently became known as the National Institute of Standards and Technology.

Organization of the U.S. Dept. of the Treasury.

The Office of Foreign Assets Control and the main branch of the Treasury Department Federal Credit Union are located in the Freedman's Bank Building in Washington, D.C.

Structure

Seal on United States Department of the Treasury on the Building

• Secretary of the Treasury^[15]
  • Deputy Secretary of the Treasury
    • Treasurer of the United States
      • Bureau of Engraving and Printing
      • United States Mint
    • Under Secretary for Domestic Finance^[16]
      • Assistant Secretary for Financial Institutions
        • Office of Financial Institutions
      • Assistant Secretary for Financial Markets
        • Office of Financial Markets
      • Fiscal Assistant Secretary
        • Office of Fiscal Service
        • Bureau of the Fiscal Service
      • Assistant Secretary for Financial Stability
        • Office of Financial Stability
    • Under Secretary for International Affairs^[17]
      • Assistant Secretary for International Markets and Development
      • Assistant Secretary for International Affairs
      • Office of Environment and Energy^[18]
    • Under Secretary for Terrorism and Financial Intelligence (Office of Terrorism and Financial Intelligence)^[19]
      • Assistant Secretary for Terrorist Financing
        • Office of Terrorist Financing and Financial Crimes
      • Assistant Secretary for Intelligence and Analysis
        • Office of Intelligence and Analysis
      • Financial Crimes Enforcement Network
      • Office of Foreign Assets Control
      • Treasury Executive Office for Asset Forfeiture
    • Assistant Secretary for Management / Chief Financial Officer / Performance Improvement Officer
    • Assistant Secretary for Economic Policy
    • Assistant Secretary for Legislative Affairs
    • Assistant Secretary for Public Affairs/Director of policy planning
    • Assistant Secretary for Tax Policy
      • Alcohol and Tobacco Tax and Trade Bureau
    • Commissioner of Internal Revenue
      • Internal Revenue Service
    • Office of the Comptroller of the Currency
    • Office of the General Counsel
    • Office of the Inspector General
    • Treasury Inspector General for Tax Administration (TIGTA)

Bureaus

Budget and staffing

The Treasury Department was authorized a budget for Fiscal Year 2015 of $22.6 billion. The budget authorization is broken down as follows:^[20]