Hugh McCulloch
Encyclopedia
Hugh McCulloch was an American
statesman who served two non-consecutive terms as U.S. Treasury Secretary, serving under three presidents.
, he was educated at Bowdoin College
, studied law in Boston
, and in 1833 began practicing law at Fort Wayne, Indiana
. He was cashier and manager of the Fort Wayne branch of the state chartered Bank of Indiana
and President of the larger organization from 1835 to 1857, and president of its successor, the private owned Bank of Indiana from 1857 to 1863. Notwithstanding his early opposition to the "National Banking Act of 1862", he was selected by Salmon P. Chase
to be the first Comptroller of the Currency in 1863. During McCulloch's 22 months in office, 868 national banks were chartered and no failures occurred. As the first Comptroller, McCulloch recommended major changes in the banking law and the resulting National Banking Act of 1864
remains the foundation of the national banking system.
On March 9, 1865, McCulloch was appointed as the 27th Secretary of the Treasury by President
Abraham Lincoln
. His appointment was largely due to his influence with existing state banks. On the morning of Lincoln's assassination
, newly appointed McCulloch remarked "I never saw Mr. Lincoln so cheerful and happy." He continued to serve in the Presidential Cabinet of Andrew Johnson
until the close of his administration in 1869.
Immediately confronted with inflation
caused by the government's wartime issue of greenbacks, he recommended their retirement and a return to the gold standard
. In McCulloch's first annual report, issued on December 4, 1865, he strongly urged the retirement of the legal tenders or greenback
s as a preliminary to the resumption of specie
payments. However this would have reduced the supply of currency and was unpopular during the period of postwar reconstruction and westward expansion.
In accordance with this suggestion an act was passed, on March 12, 1866, authorizing the retirement of not more than $10,000,000 in six months and not more than $4,000,000 per month thereafter. This act met with strong opposition and was repealed on the February 4, 1868, after only $48,000,000 had been retired. The battle over its revival raged for the next fifty years. McCulloch was also disappointed by the decision of the United States Supreme Court upholding the constitutionality of the legal tenders.
During his tenure, McCulloch maintained a policy of reducing the federal war debt and the careful reintroduction of federal taxation
in the South.
Soon after the close of his term of office McCulloch went to England
, and spent six years (1870–1876) as a member of the banking firm of Jay Cooke
, McCulloch & Co.
From October 1884 until the close of President Chester A. Arthur
's term of office in March 1885 he was again secretary of the treasury, the 36th in the line. During his six months in office at that time, he continued his fight for currency backed by gold, warning that the coinage of silver, used by then as backing for currency, should be halted.
He died at his home, Holly Hill in Prince George's County, Maryland
, near Washington, D.C.
in 1895 and is buried in Rock Creek Cemetery in D.C. McCulloch Hall, a residence hall at Harvard Business School
, was named in his honor.
The U.S. Revenue Cutter Service
and its successor, the U.S. Coast Guard
, each named cutters after McCulloch. Revenue Cutter McCulloch served under George Dewey
in the Battle of Manila
during the Spanish-American War
, and Coast Guard Cutter McCulloch served in World War II
and the Vietnam War
.
The chief authority for the life of McCulloch is his own book, Men and Measures of Half a Century (New York, 1888). McCulloch was the last surviving member of the Lincoln cabinet.
. In 1833 the bank was established in response the closure of the Second Bank of the United States
. Indiana was still a wilderness and no eastern
bank was willing take charge of the fledgling state bank. McCulloch was one of the few prominent businessmen in the young state, and although he had no banking experience, he was appointed because he was the most qualified person willing to take the position.
He ran the bank with great efficiency making it one of the most stable in the nation. He remained president until the bank was closed in 1859 and the bank's notes were exchanged for federal notes from the new national bank. He then went on to become president of the Second Bank of Indiana, where he remained until 1865.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
statesman who served two non-consecutive terms as U.S. Treasury Secretary, serving under three presidents.
Biography
Born at Kennebunk, MaineKennebunk, Maine
Kennebunk is a town in York County, Maine, United States. The population was 1,075 people at the 2000 census. Including Kennebunkport , the population totals 14,196 people...
, he was educated at Bowdoin College
Bowdoin College
Bowdoin College , founded in 1794, is an elite private liberal arts college located in the coastal Maine town of Brunswick, Maine. As of 2011, U.S. News and World Report ranks Bowdoin 6th among liberal arts colleges in the United States. At times, it was ranked as high as 4th in the country. It is...
, studied law in Boston
Boston
Boston is the capital of and largest city in Massachusetts, and is one of the oldest cities in the United States. The largest city in New England, Boston is regarded as the unofficial "Capital of New England" for its economic and cultural impact on the entire New England region. The city proper had...
, and in 1833 began practicing law at Fort Wayne, Indiana
Fort Wayne, Indiana
Fort Wayne is a city in the US state of Indiana and the county seat of Allen County. The population was 253,691 at the 2010 Census making it the 74th largest city in the United States and the second largest in Indiana...
. He was cashier and manager of the Fort Wayne branch of the state chartered Bank of Indiana
Bank of Indiana
The state Bank of Indiana was a government chartered banking institution established in 1833 in response to the state's shortage of capital caused by the closure of the Second Bank of the United States by the administration of President Andrew Jackson...
and President of the larger organization from 1835 to 1857, and president of its successor, the private owned Bank of Indiana from 1857 to 1863. Notwithstanding his early opposition to the "National Banking Act of 1862", he was selected by Salmon P. Chase
Salmon P. Chase
Salmon Portland Chase was an American politician and jurist who served as U.S. Senator from Ohio and the 23rd Governor of Ohio; as U.S. Treasury Secretary under President Abraham Lincoln; and as the sixth Chief Justice of the United States Supreme Court.Chase was one of the most prominent members...
to be the first Comptroller of the Currency in 1863. During McCulloch's 22 months in office, 868 national banks were chartered and no failures occurred. As the first Comptroller, McCulloch recommended major changes in the banking law and the resulting National Banking Act of 1864
National Banking Act
The National Banking Acts of 1863 and 1864 were two United States federal laws that established a system of national charters for banks, and created the United States National Banking System. They encouraged development of a national currency backed by bank holdings of U.S...
remains the foundation of the national banking system.
On March 9, 1865, McCulloch was appointed as the 27th Secretary of the Treasury by President
President of the United States
The President of the United States of America is the head of state and head of government of the United States. The president leads the executive branch of the federal government and is the commander-in-chief of the United States Armed Forces....
Abraham Lincoln
Abraham Lincoln
Abraham Lincoln was the 16th President of the United States, serving from March 1861 until his assassination in April 1865. He successfully led his country through a great constitutional, military and moral crisis – the American Civil War – preserving the Union, while ending slavery, and...
. His appointment was largely due to his influence with existing state banks. On the morning of Lincoln's assassination
Abraham Lincoln assassination
The assassination of United States President Abraham Lincoln took place on Good Friday, April 14, 1865, as the American Civil War was drawing to a close. The assassination occurred five days after the commanding General of the Army of Northern Virginia, Robert E. Lee, and his battered Army of...
, newly appointed McCulloch remarked "I never saw Mr. Lincoln so cheerful and happy." He continued to serve in the Presidential Cabinet of Andrew Johnson
Andrew Johnson
Andrew Johnson was the 17th President of the United States . As Vice-President of the United States in 1865, he succeeded Abraham Lincoln following the latter's assassination. Johnson then presided over the initial and contentious Reconstruction era of the United States following the American...
until the close of his administration in 1869.
Immediately confronted with inflation
Inflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
caused by the government's wartime issue of greenbacks, he recommended their retirement and a return to the gold standard
Gold standard
The gold standard is a monetary system in which the standard economic unit of account is a fixed mass of gold. There are distinct kinds of gold standard...
. In McCulloch's first annual report, issued on December 4, 1865, he strongly urged the retirement of the legal tenders or greenback
United States Note
A United States Note, also known as a Legal Tender Note, is a type of paper money that was issued from 1862 to 1971 in the U.S. Having been current for over 100 years, they were issued for longer than any other form of U.S. paper money. They were known popularly as "greenbacks" in their heyday, a...
s as a preliminary to the resumption of specie
Money
Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally in the past,...
payments. However this would have reduced the supply of currency and was unpopular during the period of postwar reconstruction and westward expansion.
During his tenure, McCulloch maintained a policy of reducing the federal war debt and the careful reintroduction of federal taxation
Taxation in the United States
The United States is a federal republic with autonomous state and local governments. Taxes are imposed in the United States at each of these levels. These include taxes on income, property, sales, imports, payroll, estates and gifts, as well as various fees.Taxes are imposed on net income of...
in the South.
Soon after the close of his term of office McCulloch went to England
England
England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...
, and spent six years (1870–1876) as a member of the banking firm of Jay Cooke
Jay Cooke
Jay Cooke was an American financier. Cooke and his firm Jay Cooke & Company were most notable for their role in financing the Union's war effort during the American Civil War...
, McCulloch & Co.
From October 1884 until the close of President Chester A. Arthur
Chester A. Arthur
Chester Alan Arthur was the 21st President of the United States . Becoming President after the assassination of President James A. Garfield, Arthur struggled to overcome suspicions of his beginnings as a politician from the New York City Republican machine, succeeding at that task by embracing...
's term of office in March 1885 he was again secretary of the treasury, the 36th in the line. During his six months in office at that time, he continued his fight for currency backed by gold, warning that the coinage of silver, used by then as backing for currency, should be halted.
He died at his home, Holly Hill in Prince George's County, Maryland
Prince George's County, Maryland
Prince George's County is a county located in the U.S. state of Maryland, immediately north, east, and south of Washington, DC. As of 2010, it has a population of 863,420 and is the wealthiest African-American majority county in the nation....
, near Washington, D.C.
Washington, D.C.
Washington, D.C., formally the District of Columbia and commonly referred to as Washington, "the District", or simply D.C., is the capital of the United States. On July 16, 1790, the United States Congress approved the creation of a permanent national capital as permitted by the U.S. Constitution....
in 1895 and is buried in Rock Creek Cemetery in D.C. McCulloch Hall, a residence hall at Harvard Business School
Harvard Business School
Harvard Business School is the graduate business school of Harvard University in Boston, Massachusetts, United States and is widely recognized as one of the top business schools in the world. The school offers the world's largest full-time MBA program, doctoral programs, and many executive...
, was named in his honor.
The U.S. Revenue Cutter Service
United States Revenue Cutter Service
The United States Revenue Cutter Service was established by Secretary of the Treasury Alexander Hamilton in 1790 as an armed maritime law enforcement service. Throughout its entire existence the Revenue Cutter Service operated under the authority of the United States Department of the Treasury...
and its successor, the U.S. Coast Guard
United States Coast Guard
The United States Coast Guard is a branch of the United States Armed Forces and one of the seven U.S. uniformed services. The Coast Guard is a maritime, military, multi-mission service unique among the military branches for having a maritime law enforcement mission and a federal regulatory agency...
, each named cutters after McCulloch. Revenue Cutter McCulloch served under George Dewey
George Dewey
George Dewey was an admiral of the United States Navy. He is best known for his victory at the Battle of Manila Bay during the Spanish-American War...
in the Battle of Manila
Battle of Manila
- Land battles :* Battle of Manila - Spanish forces and their various allies drove out the ruling Muslim elite and founded the capital city of the Philippines* Battle of Manila - A British victory in the Seven Years' War* Battle of Manila - U.S...
during the Spanish-American War
Spanish-American War
The Spanish–American War was a conflict in 1898 between Spain and the United States, effectively the result of American intervention in the ongoing Cuban War of Independence...
, and Coast Guard Cutter McCulloch served in World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
and the Vietnam War
Vietnam War
The Vietnam War was a Cold War-era military conflict that occurred in Vietnam, Laos, and Cambodia from 1 November 1955 to the fall of Saigon on 30 April 1975. This war followed the First Indochina War and was fought between North Vietnam, supported by its communist allies, and the government of...
.
The chief authority for the life of McCulloch is his own book, Men and Measures of Half a Century (New York, 1888). McCulloch was the last surviving member of the Lincoln cabinet.
Bank of Indiana
McCulloch began his banking career as the President of the Bank of IndianaBank of Indiana
The state Bank of Indiana was a government chartered banking institution established in 1833 in response to the state's shortage of capital caused by the closure of the Second Bank of the United States by the administration of President Andrew Jackson...
. In 1833 the bank was established in response the closure of the Second Bank of the United States
Second Bank of the United States
The Second Bank of the United States was chartered in 1816, five years after the First Bank of the United States lost its own charter. The Second Bank of the United States was initially headquartered in Carpenters' Hall, Philadelphia, the same as the First Bank, and had branches throughout the...
. Indiana was still a wilderness and no eastern
Eastern United States
The Eastern United States, the American East, or simply the East is traditionally defined as the states east of the Mississippi River. The first two tiers of states west of the Mississippi have traditionally been considered part of the West, but can be included in the East today; usually in...
bank was willing take charge of the fledgling state bank. McCulloch was one of the few prominent businessmen in the young state, and although he had no banking experience, he was appointed because he was the most qualified person willing to take the position.
He ran the bank with great efficiency making it one of the most stable in the nation. He remained president until the bank was closed in 1859 and the bank's notes were exchanged for federal notes from the new national bank. He then went on to become president of the Second Bank of Indiana, where he remained until 1865.