First Lord of the Treasury

“ By the Constitution of the United States it is provided that "no money shall be drawn from the Treasury but in consequence of appropriations made by law." A public treasury was undoubtedly contemplated and intended to be created, in which the public money should be kept from the period of collection until needed for public uses. In the collection and disbursement of the public money no agencies have ever been employed by law except such as were appointed by the Government, directly responsible to it and under its control. ”

“ There need be no fear that we can not pay our current expenses with such money as we have. There is now in the Treasury a comfortable surplus of more than $63,000,000, but it is not in gold, and therefore does not meet our difficulty. ”

“ In the present state of legislation the only pretense of any existing executive power to restore at this time any part of our surplus revenues to the people by its expenditure consists in the supposition that the Secretary of the Treasury may enter the market and purchase the bonds of the Government not yet due, at a rate of premium to be agreed upon. ”

“ Erected upon the vital springs of national prosperity, wielding the mysterious power of the purse, the final arbiter in the disputes of every other office, a good fairy or a perverse devil, as ‘My Lords’ may choose, to every imaginative Secretary of State, the Treasury occupies in the polity of the United Kingdom a central and superior position. No school of thought is so strong or so enduring as that founded on the great traditions of Gladstonian and Peelite finance. Reckless Ministers are protected against themselves, violent Ministers are tamed, timid Ministers are supported and nursed. ”

“ Now is the time to ask the proprietors themselves and ascertain whether in starting a bank they ever had the intention of letting it work to the detriment of their country? The public Treasury is the heart of the State—did they ever wish, do they to-day wish to strike it with a dagger? ”

“ I can not doubt that such a treasury as was contemplated by the Constitution should be independent of all banking corporations. The money of the people should be kept in the Treasury of the people created by law, and be in the custody of agents of the people chosen by themselves according to the forms of the Constitution—agents who are directly responsible to the Government, who are under adequate bonds and oaths, and who are subject to severe punishments for any embezzlement, private use, or misapplication of the public funds, and for any failure in other respects to perform their duties. ”

“ It should provide a perfect way of obtaining money to move the crops, and furnish an all-sufficient means of preventing or breaking panics. It should make the money of the United States still more current and acceptable in all parts of the world. This would make the nation greater in the eyes of other nations, and give the United States Treasury a proper command of the commerce and finances of the world, within ten years after being put into operation. ”

“ The late disastrous monetary revulsion may have one good effect should it cause both the Government and the people to return to the practice of a wise and judicious economy both in public and private expenditures.
An overflowing Treasury has led to habits of prodigality and extravagance in our legislation. It has induced Congress to make large appropriations to objects for which they never would have provided had it been necessary to raise the amount of revenue required to meet them by increased taxation or by loans. ”

“ Under the system of sales, matured as it has been by experience, and adapted to the exigencies of the times, the lands will continue as they have become, an abundant source of revenue; and when the pledge of them to the public creditor shall have been redeemed by the entire discharge of the national debt, the swelling tide of wealth with which they replenish the common Treasury may be made to reflow in unfailing streams of improvement from the Atlantic to the Pacific Ocean. ”

“ There is no doubt whatever about the imperative necessity of our relieving the United States Treasury from the load it is now carrying, and placing the United States Government in the same position precisely that every state and municipality is in, so far as its credit is concerned; for the treasury of the Government, when filling its normal and proper functions, is no more fit to carry on the banking business than a man who may be wealthy in land, but has no cash assets ”

“ Others may regret that the exigencies of the country were not promptly met by taxation,—or that at the beginning a different system was not organized by the Treasury, through which the national securities might have found a readier market,—or that the national credit was not sustained, at the period of bank suspension, by the resolute redemption of the Government securities in coin at any present sacrifice. ”

“ For many years the banks of this country have conducted a persistent agitation for the abolition of the Independent Treasury system. It has been their contention that the Independent Treasury was an archaic and inefficient system of administering the finances of the nation ”

“ Other departments had to face a not less searching examination, and the Navy and Colonial Office estimates were the subject of prolonged and animated correspondence. There was, of course, nothing unhealthy, or even unusual, in all this. It is the business of the Treasury to canvass all proposals which involve expenditure and to compel those who bring them forward to show, not merely that they are necessary and desirable, but that they are more necessary and more desirable than other necessary and desirable projects. ”

“ The public Treasury, which should only exist as a conduit conveying the people's tribute to its legitimate objects of expenditure, becomes a hoarding place for money needlessly withdrawn from trade and the people's use, thus crippling our national energies, suspending our country's development, preventing investment in productive enterprise, threatening financial disturbance, and inviting schemes of public plunder. ”

“ Never before did men suffer such a penalty for having befriended an embarrassed state. To this injustice and cruelty the magistracy winked. But, in addition to this, the coin was debased to such an extent, that seventy-two millions of livres were thus added to the treasury. Yet even these gains were not enough to satisfy a profligate government. There still continued a constant pressure. The national debt had increased even to fifteen hundred millions of livres, or almost seventy millions sterling—equivalent to what would now be equal to at least one thousand millions of dollars. ”

“ The national system will create a reliable and permanent influence in support of the national credit and protect the people against losses in the use of paper money. Whether or not any further legislation is advisable for the suppression of State-bank issues, it will be for Congress to determine. It seems quite clear that the Treasury can not be satisfactorily conducted unless the Government can exercise a restraining power over the bank-note circulation of the country. ”

“ The most vigilant money dealer will readily perceive that not only will his interest be secure on such a pledge, but that a debt of $18,000,000 or $20,000,000 would by the surplus of sales over and above the payment of the interest be extinguished within any reasonable time fixed for its redemption. To relieve the Treasury from its embarrassments and to aid in meeting its requisitions until time is allowed for any new tariff of duties to become available, it would seem to be necessary to fund a debt approaching to $15,000,000 ”

“ The local accumulations of the revenue have already enabled the Treasury to meet the public engagements in the local currency of most of the States, and it is expected that the same cause will produce the same effect throughout the Union; but for the interests of the community at large, as well as for the purposes of the Treasury, it is essential that the nation should possess a currency of equal value, credit, and use wherever it may circulate. ”

“ The condition in which our Treasury may be placed by a persistence in our present course is a matter of concern to every patriotic citizen who does not desire his Government to pay in silver such of its obligations as should be paid in gold. Nor should our condition be such as to oblige us, in a prudent management of our affairs, to discontinue the calling in and payment of interest-bearing obligations which we have the right now to discharge, and thus avoid the payment of further interest thereon. ”

“ He took the treasury at a period when it was little more than a great national bank of discount, with rates varying from day to day; the coin standard a commodity of speculation on Wall street; the credit of the government a football in the markets of the world; and our bonds begging favor of European capitalists. He leaves it what it ought to be—a treasury pure and simple, making no discounts, offering no concessions, asking no favors ”

“ And while the functions of our National Treasury should be few and simple, and while its best condition would be reached, I believe, by its entire disconnection with private business interests, yet when, by a perversion of its purposes, it idly holds money uselessly subtracted from the channels of trade, there seems to be reason for the claim that some legitimate means should be devised by the Government to restore in an emergency, without waste or extravagance, such money to its place among the people. ”

“ There should be no scheme accepted as satisfactory by which the burdens of the people are only apparently removed. Extravagant appropriations of public money, with all their demoralizing consequences, should not be tolerated, either as a means of relieving the Treasury of its present surplus or as furnishing pretext for resisting a proper reduction in tariff rates. ”

“ Under existing legislation it is in the power of the Treasury Department to maintain that essential condition of national finance as well as of commercial prosperity—the parity in use of the coined dollars and their paper representatives. The assurance that these powers would be freely and unhesitatingly used has done much to produce and sustain the present favorable business conditions. ”

“ Financial measures, of various kinds, for borrowing money to supply the wants of the treasury, beyond the receipts from taxation and the sales of the public lands, have been adopted by the government since the United States became an independent nation. Subscriptions for a loan of twelve millions of dollars were, on the 4th of August, 1790, directed to be opened at the treasury, to be made payable in certificates issued for the debt according to their specie value. ”

“ Should it be adopted, the Treasury, aided by the ample resources of the country, will be able to discharge punctually every pecuniary obligation. For the future all that is needed will be that caution and forbearance in appropriations which the diminution of the revenue requires and which the complete accomplishment or great forwardness of many expensive national undertakings renders equally consistent with prudence and patriotic liberality. ”

“ We have, through the Department of Finance and the Central Bank, launched a Treasury Bills Program designed to provide the National Treasury with funds during seasonal lags in revenue collections and at the same time to establish a private market for short-term treasury bills. These securities serve as a standard or benchmark for private investors as they are auctioned competi­tively and traded freely in the open market. ”

“ Such a condition has heretofore in times of surplus revenue led the Government to restore currency to the people by the purchase of its unmatured bonds at a large premium and by a large increase of its deposits in national banks, and we easily remember that the abuse of Treasury accumulation has furnished a most persuasive argument in favor of legislation radically reducing our tariff taxation. ”

“ No borrowing should run athwart the borrowings of the Federal Treasury, and no fundamental industrial values should anywhere be unnecessarily impaired. In the hands of many thousands of small investors in the country, as well as in national banks, in insurance companies, in savings banks, in trust companies, in financial agencies of every kind, railway securities--the sum total of which runs up to some ten or eleven thousand millions, constitute a vital part of the structure of credit, and the unquestioned solidity of that structure must be maintained. ”