What is the 'U.S. Treasury'

The U.S. Treasury, created in 1789, is the government department responsible for issuing all Treasury bonds, notes and bills. Among the government departments operating under the U.S. Treasury umbrella are the Internal Revenue Service (IRS), the U.S. Mint, the Bureau of the Public Debt, and the Alcohol and Tobacco Tax Bureau.

Key functions of the U.S. Treasury include printing bills, postage and Federal Reserve notes, minting coins, collecting taxes, enforcing tax laws, managing all government accounts and debt issues, and overseeing U.S. banks in cooperation with the Federal Reserve. The secretary of the Treasury is responsible for international monetary and financial policy, including foreign exchange intervention.


The U.S. Treasury is the Cabinet-level department responsible for promoting economic growth and security. It was established by the First Congress of the United States, which convened in New York on March 4, 1789, following the ratification of the Constitution. The secretary of the Treasury is nominated by the president and must be confirmed by the U.S. Senate.


The U.S. Constitution was ratified in 1789, replacing the Articles of Confederation, under which the U.S. had functioned during and immediately following the American Revolution. The Constitution provided for a much stronger federal government, and the establishment of a centralized Treasury Department was an important part of that. Alexander Hamilton was the first secretary of the Treasury and served until 1795. Among his major accomplishments while he was secretary of the Treasury were the federal government's assumption of the states' debts related to the American Revolution, provisions for the payment of war bonds and the institution of a system for the collection of federal taxes.

Internal Revenue Service

In 1862, President Abraham Lincoln created the position of commissioner of internal revenue and implemented an income tax to pay for the Civil War. That tax was repealed in 1872, but the office lived on. The income tax as it exists now began with the 1913 ratification of the 16th Amendment to the U.S. Constitution, and the IRS assumed responsibility for collection and enforcement.

Treasury Bills and Bonds

Borrowing by the Treasury is done through the issuance of shorter-term notes, called bills, and longer-term bonds. The bonds have a maturity of as long as 30 years. Treasury bonds are backed by the full faith and credit of the U.S. government, and as such are popular investments by governments, companies and individuals worldwide. The global market for the instruments was an estimated $12.9 billion at the end of 2015.

The Federal Reserve Bank buys and sells the bills and bonds to control the country's money supply and manage interest rates.

  1. Treasury Direct

    Treasury Direct is the online platform through which investors ...
  2. Government Security

    A government security is a bond (or debt obligation) issued by ...
  3. United States Treasury Money Mutual ...

    A United States Treasury money mutual fund is a mutual fund that ...
  4. Treasury Offering

    The issuance of an additional class of security already existing ...
  5. Treasury International Capital ...

    Select groups of capital which are monitored with regards to ...
  6. Treasury Index

    An index based on the auctions of U.S. Treasury bills, or on ...
Related Articles
  1. Insights

    What Are the Duties of the Treasury Secretary?

    The Secretary of the Treasury is one of the most powerful positions in the U.S. federal government.
  2. Investing

    The Treasury And The Federal Reserve

    Find out how these two agencies create policies to manage the economy and keep it on an even keel.
  3. Investing

    A Look At National Debt And Government Bonds

    Learn the functions of the U.S. Treasury, and find out how and why it issues debt.
  4. Investing

    The Importance Of U.S. Treasury Rates

    U.S. Treasury bond interest rates affect more than just bondholders! It impacts the day to day lives of all consumers.
  5. Investing

    Buy Treasuries Directly From The Fed

    If you want government securities, go straight to the source. We'll show you how.
  6. Financial Advisor

    Top 4 Treasurys ETFs (SHY, IEI)

    Learn about the specifics of the top four U.S. Treasury ETFs and how investors can buy ETFs that invest in bonds along the yield curve.
  7. Investing

    Long-Term Treasury Bond ETFs Are Attracting Assets in 2016 (TLT, TLH)

    Discover five exchange-traded funds that invest in U.S. Treasury long-term bonds and experienced large year-to-date capital inflows as of March 4, 2016.
  8. Investing

    Why America's Big Creditors Are Selling Treasuries

    Foreign investors are paring their holdings amid uncertainty about Trump’s policies
  9. Investing

    TLT: iShares Barclays 20+ Year Treasury Bond ETF

    Learn about the iShares 20+ Year Treasury Bond ETF (TLT). TLT is a very liquid ETF with low costs that allow investors to gain exposure to treasuries.
  10. Investing

    5 Government Bond ETFs Popular in 2016 (SHY, IEF)

    Discover how the five most popular government bond ETFs can provide access to Treasuries with short-, intermediate- and long-term exposure.
  1. How are Treasury bills (T-bills) taxed?

    Read about how the Internal Revenue Service collects taxes on Treasury bills (T-bills) purchased from the United States government ... Read Answer >>
  2. Which economic factors impact treasury yields?

    Discover the economic factors that impact Treasury yields. Treasury yields are the benchmark yield for the rest of the world, ... Read Answer >>
  3. What are the differences between a treasury bond and a treasury note and a treasury ...

    Understand the types of securities the government issues and learn the difference between Treasury notes, Treasury bonds ... Read Answer >>
  4. What is the difference between the Daily Treasury Long-Term Rates and the Daily Treasury ...

    Find out more about the daily Treasury long-term rates, daily Treasury yield curve rates and the difference between these ... Read Answer >>
  5. How is the interest rate on a treasury bond determined?

    Explore the difference between interest rates and bond coupons, what determines current yield on debt instruments, and why ... Read Answer >>
Hot Definitions
  1. Standard Deviation

    A measure of the dispersion of a set of data from its mean, calculated as the square root of the variance. The more spread ...
  2. Entrepreneur

    An Entrepreneur is an individual who founds and runs a small business and assumes all the risk and reward of the venture. ...
  3. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
  4. Perfect Competition

    Pure or perfect competition is a theoretical market structure in which a number of criteria such as perfect information and ...
  5. Compound Interest

    Compound Interest is interest calculated on the initial principal and also on the accumulated interest of previous periods ...
  6. Income Statement

    A financial statement that measures a company's financial performance over a specific accounting period. Financial performance ...
Trading Center