There were two significant birthday celebrations on Sept. 2 and both are 230 years old. One partier is the Department of the Treasury. Congress established the Treasury as the second federal agency after the State Department (July 27, 1789). These were two of the first acts taken by the first Congress at the request of newly inaugurated first President George Washington on behalf of the United States of America, a newly conceived constitutional nation––all brand new, still in the wrapper. It was important that we were able to conduct business with foreign countries and establish a monetary system for dealing with money exchanges with those countries, both debt and lending––mostly debt at that point.
The other birthday belongs to political strife, conflict, and discord. After the U.S. Constitution was ratified on June 21, 1788 and George Washington took on the office of President of the United States by unanimous consent on April 30, 1789, he remains the only president to garner 100% of the electoral votes. He also became the only president not representing a political party. With no opposition there was no fodder for debate. The U.S. was dealing with the aftermath of the Revolutionary War and trying desperately to launch a new democracy. There was little time or interest in political division or contradictory discourse.
The State Department was established first, and for the most part over the last 230 years, we’ve held the position that our politics stops at “the water’s edge.” Ergo, by exclusively dealing with foreign policy, there was no political posturing coming from that agency.
However, when the Treasury got rolling, so did American political debate. Harmony in U.S. politics lasted less than 15 months.
President Washington wanted Robert Morris, who had been the Superintendent of Finances under the Articles of Confederation and the person who kept American finances afloat during the war, to be Treasury Secretary. Morris declined (being perhaps the first to use the excuse of wanting to “spend more time with my family”) and recommended Washington appoint Alexander Hamilton. Hamilton was a trusted aide to Washington during the war, so on Sept. 11, just nine days after establishing the department, he did.
By 1790 Hamilton had proposed the Bank of the United States. Hamilton wanted financial order and clarity to facilitate the new country’s position in a world order. He believed this would allow the U.S. to gain the stability to apply for credit around the globe. He also proposed a national Mint to establish common currency and impose federal excise taxes. The national bank was also supposed to loan money for new businesses to citizens. Hamilton then surprised most everyone and suggested all war debt from the states be assumed and paid-off by the federal government and then consolidate that debt in a national bank.
Immediately, Secretary of State Thomas Jefferson and James Madison got their hackles up and opposed the bank supported by Hamilton and John Jay on the grounds that such a bank gave too much power to the central government. The fight over whether the feds should control money or if it should be left to states got the political debate going. The opposing forces argued from the Federalist side that the power to establish the bank was implied in the Constitution and the Democratic-Republican party stood on the fact that the power was not specifically enumerated. Has anyone ever heard that argument used before?
Washington waivered and arguments continued, both pro and con, until the president at long last took Hamilton’s side and signed the bill on Feb. 25, 1791, making
Hamilton’s national bank a reality.
The bank’s 20-year charter came up for renewal in 1811 and the renewal was denied. The Second National Bank was established, but didn’t have the scope of influence desired and initiate by Hamilton. Today, any banks with “National” in their name have a precise meaning. They are chartered and supervised by the Office of the Comptroller of the Currency, an agency within the Treasury Department. The mints are still federally controlled as established by Hamilton’s vision. The Internal Revenue Service is a department under the Treasury purview as is all government debt.
The debate launched by Alexander Hamilton when he proposed a national bank never abated. Today, political disharmony has spread in scope to include every imaginable, and often seemingly unimaginable, topic, as we still argue politics today. When the term “Fake News” is tossed around; when political ideas are dismissed out-of-hand because they are unattainable, untenable, or simply too expensive to consider; or shouted down as “un-American from the rooftops,” blame Hamilton.
George Washington served as an apolitical president. He later sided with Federalists, but the thought of having officials who make decisions divorced from political influence seems, well––unattainable, untenable, and maybe just plain un-American.
Commentator’s note: If you haven’t seen Lin Manuel Miranda’s musical play “Hamilton,” know that it’s a gem and worth the effort.