When Alexander Dallas (1759 - 1817) was appointed Secretary of the Treasury by President Madison in 1814, he was faced with a bankrupt Treasury depleted by the War of 1812 and with an unstable currency situation caused by the proliferation of commercial banks and their worthless bank notes not backed by specie. In a report to Congress in 1814, Dallas advocated permanent annual revenue to be raised by internal taxes, in addition to the external revenue already derived from Customs duties. He also advised the creation of the Second Bank of the United States to supply financial resources to an embarrassed Treasury and regulate bank note circulation.
Sec. Alexander J. Dallas
The revenue measures elaborated in this report mark the beginning of a conflict between advocates of internal revenue and those of solely external revenue. This conflict continued until the imposition of the income tax in 1913. Excise taxes, established in 1813 as a temporary wartime measure, continued to be collected until 1817. In addition, Congress enacted a high external tariff in 1816 to help pay the war debt. Dallas succeeded in his efforts to establish the Second Bank of the United States, which was chartered by Congress in 1816. He retired that year after the new Bank had been organized.
About the Artist
Freeman Thorp (1844 - 1922) came to Washington, D.C. from Geneva, Ohio in 1861 and became a prolific painter of official portraits. At one time he had his studio in the attic of the Senate wing of the Capitol where he painted a life portrait of President Grant. He also painted life portraits of Presidents Lincoln, Garfield, McKinley, and Cleveland in addition to numerous senators, representatives, and generals. Thorp's portrait of Alexander J. Dallas, executed in 1881, is a copy of an original by Gilbert Stuart now hanging in the Pennsylvania Academy of Fine Arts.