On September 2, 1789, President George Washington approved the act establishing the United States Department of the Treasury. The new department faced one of the young republic’s most urgent problems: how to turn the debts, competing claims, and weak credit left by the Revolutionary War into a workable national financial system. The law created the office of the secretary of the Treasury and laid the institutional foundation for managing the federal government’s finances.
Nine days later, on September 11, the Senate confirmed Alexander Hamilton as the nation’s first secretary of the Treasury. Hamilton inherited a government burdened by war debt and lacking the reliable public credit needed to borrow, trade, and operate effectively. His task was not simply to balance accounts; it was to persuade Americans and foreign creditors that the United States would honor its obligations.
Congress directed Hamilton on September 21, 1789, to prepare a plan for supporting public credit. He delivered his First Report on Public Credit in January 1790, proposing that the federal government fund its debts at full value and assume outstanding state Revolutionary War debts. The proposal became a defining part of Hamilton’s broader program for a stronger national economy, alongside later measures including the creation of a national bank, a federal mint, and more systematic federal revenue collection.
Those policies also intensified the country’s emerging political divide. Hamilton and the Federalists favored a vigorous national government and a financial system tied to federal authority. Thomas Jefferson and his Republican allies feared that the program concentrated too much power in the hands of the central government and financial elites. Their clash helped shape the first American party system.
A final note on the imagery: the Treasury seal is not the eagle emblem found in the Great Seal of the United States. Its central symbols are scales, a key, and thirteen stars, while the eagle imagery on the dollar bill comes from the Great Seal. The Treasury seal began appearing on U.S. currency during the Civil War—not at the department’s founding.
Image: “Eagle and Treasury Seal” from 1921 via Wikimedia Commons, public domain
