The President’s Cabinet: Treasury
This is the fourth in a series of articles on the President’s Cabinet. With the advent of the Department of Government Efficiency (DOGE), it might be time to review the departments that support the President’s ongoing responsibilities to establish justice, ensure domestic tranquility, provide for the common defense, and promote the general welfare of our citizens.
In this article I will cover Treasury, not the Treasury Department. Tradition dictates that we call it Treasury. Its leader is called the Treasury Secretary, who is fifth in line to the President if the President dies or is impeached and removed from office.
When President Washington asked Pennsylvanian Robert Morris in September of 1789 to become the nation’s first Treasury Secretary, he was turned down, but Morris pointed him in the direction of New Yorker Alexander Hamilton — age 33.
A very young Hamilton had been one of Washington’s artillery officers, an aide-de-camp in the Revolution, and a delegate to the Constitutional Convention of 1787.
He helped John Adams and John Jay write the Federalist Papers that supported and explained the reasons for supporting the new Constitution.
He was a wealthy and brilliant financier who founded the Bank of New York. He proved to be a perfect choice as he guided the nation through its infancy to make sure the financial security of our country was established and maintained.
His expertise in finance and banking was unparalleled. It was a sad day when he was shot and killed at age 48 by former Vice President Aaron Burr in a duel in 1804.
Treasury is the finance department of the federal government. It oversees the printing and coining of our money, manages federal finances, collects taxes, and pays our bills. The current Treasury Secretary is Scott Bessent, a South Carolina hedge fund manager who is an expert in global investments and a currency and fixed income specialist.
Various bureaus do 98% of Treasury’s work. They include the Alcohol and Tobacco Tax and Trade Bureau (collects taxes on those products and investigates fraud), Bureau of Engraving and Printing (designs and manufactures our paper currency), Fiscal Service Bureau (promotes integrity and efficiencies in accounting and manages and issues our nation’s bonds and other special securities), the Financial Crimes Enforcement Network (supports law enforcement in finding fraud and abuse), the Inspector General (detects waste, abuse and mismanagement in Treasury), the Inspector General for Tax Administration (detects fraud, waste, and abuse specifically in the IRS), and the Internal Revenue Service (collects taxes).
The Comptroller of the Currency charters and regulates national banks, and the U.S. Mint designs and manufactures our coins, distributes them to the Federal Reserve Banks, and maintains custody of our gold and silver assets. In 2003, because of the 9/11 attack, three of its organizations were moved — the Bureau of Alcohol, Tobacco, Firearms and Explosives to the Justice Department, and U.S. Customs and the Secret Service to the Homeland Security Department.
Originally the Coast Guard was part of Treasury but has since been put under Homeland Security.
If one looks at our paper currency you will find two signatures — those of the Treasury Secretary and the Treasurer of the United States.
The Treasurer works for the Secretary and oversees the U.S. Mint and Engraving and Printing bureaus and is the custodian of our collateral assets. The signatures on the bills mean the currency is a genuine Federal Reserve note backed by the full faith and credit of the United States. We no longer have gold and silver certificates.
When Alexander Hamilton took the reins of Treasury, his first duty was to make sure the U.S. paid its debts and developed a system to maintain its solvency. He proposed a National Bank, and the Congress chartered one for our first 20 years.
The bank allowed those wealthy Americans and nations around the world to trust our country and begin to invest with us. He also encouraged the creation of bonds, where individuals loaned money to our nation knowing they would be guaranteed a fair return.
We currently have an investment structure based on six types of debt certificates — T-bills, T-Notes, Short-term Treasury bonds, Treasury Inflation-Protected Securities (TIPS), Floating Rate Notes (FRNs), and Separate Trading of Registered Interest and Principal Securities (STRIPS).
The largest holder of our debt is the country of China. Japan ranks second. Investors see the investment in our certificates as safe, a good income stream, diverse in their makeup, and hedges to inflation. If the investor is an American, there are also tax advantages because states do not tax income gained from these certificates when they come due.
Because the United States is a republic that leans more toward a capitalistic society, it is important to have a strong Treasury that looks after our assets and manages our money. Hamilton understood this.
As a result, the shortest walk to the White House of any member of the President’s Cabinet happens to be the one of Treasury Secretary. The Secretary’s office is in the building next to the White House at Fifteenth and Pennsylvania Avenue.
Next up — the Department of Defense.
About this series
This is the fourth in a series of columns on the president’s cabinet by Bruce Simmons of Aurora, who worked in the private sector in Washington, D.C., for 25 years before leaving to become a high school humanities teacher. He is retired now and writes novels. Visit his website at bwsimmons.org.