Sub-Treasury, the
The United States government first assumed control of its own funds in 1840, the money being deposited in two corporations known as
Banks of the
United States.
Previous to that year public moneys were deposited in various State banks selected by the
Secretary of the Treasury.
The suspension of specie payments in May, 1837 (see
specie circular, the) not only led to a general panic, but shut up a large amount of national government money.
In 1840, when an attempt was made to secure a renewal of the charter of the Bank of the
United States, an attempt was also made to secure the necessary repeal of the independent treasury act. The latter measure passed both Houses, and became a law Aug. 13, 1841.
The next Congress had a sufficient Whig majority in the Senate to overcome the
Democratic majority in the
House, and to defeat any effort to renew the sub-treasury system.
For five years, therefore, after the repeal of the subtreasury act, the treasury was managed practically at the discretion of the
Secretary and without special regulations by law. The election of
James K. Polk brought in a Congress largely Democratic in both branches.
In 1846 a bill was introduced to renew the sub-treasury system.
It passed both Houses, and became a law Aug. 6.
This act was practically the same as that of July 4, 1840, and has since remained in force with but little change.
On Feb. 25, 1863, the act creating a system of national banks became a law. This authorized the
Secretary of the Treasury to make specified depositories of the public moneys, except receipts from customs.
The original sub-treasury acts provided for seven places of deposit-New York,
Boston,
Charleston,
St. Louis, the mints at
Philadelphia and
St. Louis, and the treasury at
Washington, the first four being under the control of assistant treasurers.
The status of the sub-treasury system in 1901 is clearly defined in the prescribed duties of the treasurer of the
United States—viz.: “. . . is charged with the receipt and disbursement of all public moneys that may be deposited in the treasury at
Washington, and the subtreasuries at
Boston,
New York,
Philadelphia,
Baltimore,
Cincinnati,
Chicago,
St. Louis, New Orleans, and
San Francisco, and in the national bank
United States depositories ....”
