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The State Treasurer has always been, and continues to be responsible for all money belonging to the state. In this capacity he is responsible for disbursing funds for all expenses incurred by the state as well as administering the state pension funds, the Capital Investment fund, and the Federal-State Social Security Agreement. Throughout the history of the state the legislature has tasked the State Treasurer with an increasing number of responsibilities and has often modified those same responsibilities in an effort to increase efficiency in the administration of the state’s fiscal policies.
The office of State Treasurer was not created with the 1776 State Constitution. The first reference in Delaware Law to the existence of such a post is found in a 1778 act passed to raise $120,000 for the state by means of general tax. According to the law such taxes were to be paid to a State Treasurer by the County Treasurers after they had received them from local collectors. This law also appointed the state’s first treasurer, Samuel Patterson of New Castle County. Appointments of the early Treasurers were not made on a regular basis, but all appointments were made by an act of the legislature. If the Treasurer was negligent, died, or in some other way vacated his office while the General Assembly was in recess, a successor was appointed by the state’s president or commander-in-chief with the approval of the Privy Council (forerunner of today’s cabinet). To ensure that the first treasurer of the state would perform his duties honestly and ably, the legislature required that he be bound to the state in the amount of 45,000 pounds. Successive treasurers posted bonds in ever increasing amounts.
Early duties of the state treasurers appear to have been primarily concerned with receipts and disbursements of tax monies deposited in a general fund to run the state and included monitoring the efficient and accurate collection of taxes. The treasurer was empowered to take action against those collectors or county treasurers who did not return levied monies. He rendered quarterly and annual accounts of his office to the auditor and submitted a statement of all unpaid balances to the president or commander-in-chief. He also sent Delaware’s quota of the continental taxes to the Board of Treasury of the United States. In 1786, the tax amounted to 23,132 pounds or about $ 370,112.
The importance of the continued existence of a state treasurer to act as custodian of the general fund for state was recognized by the legislators who formalized the position in Article VIII of the 1792 constitution which specifies that the “state treasurer shall be appointed annually by the House of Representatives with the concurrence of the Senate.”
The treasurer’s responsibilities after 1792 broadened with the evolution of Delaware’s statehood. In addition to appointing collectors, certifying them to the auditor, and overseeing the collection of taxes, in 1796 he was made the trustee for the establishment of free schools in Delaware. Monies received for marriage and tavern licenses between 1796-1806 were set aside as part of a fund to establish schools. The state treasurer was named administrator of the fund and as such was to “receive, apply for, and recover…any gift, donation, or bequest for the purpose of establishing schools…in addition to previously designated fees.” Shares in the bank of Delaware, the United States, or Pennsylvania were to be purchased by the treasurer and dividends reinvested in the fund. The treasurer was to present a special rendering of this account to the legislature each year. The treasurer’s role as trustee was repeatedly extended by legislation until 1820. After a two year lapse the fund was re-established in 1822 with the treasurer again designated trustee of the fund. As an additional source of income for the school fund the legislature ordered the treasurer to purchase $500 of stock a year in the Chesapeake and Delaware Canal Company from 1823-1828. Furthermore, the treasurer was ordered to vote the number of shares held by the state for the selection of the president and/or directors of the canal company.
In 1819 the treasurer was directed to collect all tax monies in specie (gold or silver) or in the form of notes on banks redeeming presented notes in specie. The treasurer received additional duties as the state further defined its financial policies. In 1823 the treasurer was directed to deposit all state monies in the Farmer’s Bank of the state of Delaware. A separate account was to be opened in the same bank for the funds accumulating for the establishment of schools. The treasurer alone wrote drafts as directed by the General Assembly on each of these accounts. Other responsibilities that the treasurer assumed by acts of the legislature included submitting records to the auditor and publishing the same before the legislature; appointing and assuming responsibility for the state tax collectors; paying out funds appropriated to various commissions and people; and paying all claims levied against the state. In the early 1860’s the legislature authorized the treasurer to determine whether the state banks could loan the state money to cover expenses. If so he was then to borrow such monies as necessary.
With the arrival of rail transportation in the area the treasurer has specific tasks delegated to him to ensure that the state would receive all income due from taxes levied on the rail companies. In an effort to facilitate internal improvements within the state in the late 1850s the state granted aid to railroad companies to assist them in the construction of rails, etc. Monies were to be raised by lotteries, the receipts of which were to be paid to the state treasurer. The treasurer received bonds and taxes from the railroad companies operating within the state and, upon legislative directive, made alternate tax payment plans for the various railways. The treasurer also attended the sale of any railroad company operating within the state and, after giving notice of his intention, bid for the purchase of same “to the amount of the principal of any debt due to the state.” After 1873, upon determination of tax delinquency, the treasurer was to institute proceedings against the railways in an effort to recoup outstanding debts. In order to protect itself, the state created a guarantee deposit fund which consisted of all monies received from railroads and railways. The fund, known as the Railroad and Railway Guarantee Deposit Fund, accumulated monies made from investments in stocks and bonds authorized by the state and purchased by the state treasurer. The treasurer transferred any monies remaining in the fund, after due time elapsed, for deposit/withdrawal into the general fund of the state to be used as part of the available funds of the state.
In 1860 the state treasurer assumed additional responsibilities in the areas of banking and revenue. With the changes in the state tax laws the treasurer received was monies form shareholders in the national banks, provided a list of shareholders in such banking institutions, assessed a penalty on officers of such institutions who refused or neglected to furnish access to its books, appointed and bonded collectors of the tax, and provided the General Assembly with the names of the banks and railroad and steamship companies in default. The revenue act of 1867 levied various taxes on all persons, associations, businesses, corporations, etc. in the state. The responsibilities of the treasurer under this law were to appoint collectors, to receive financial statements from applicable groups showing their receipts, and to receive the appropriate amounts of taxation. The state treasurer also heard, determined, and corrected and adjusted all assessment appeals.
In the 1860’s the duration of the treasurer’s time in office was limited to not more than two two-year terms within a six-year period. In 1879 the legislature set penalties for misconduct in office on the part of the state treasurer. If caught embezzling, abstracting, or willfully misappropriating funds he was judged guilty of a misdemeanor and, upon conviction, imprisoned for a term of from two to ten years.
The 1883 General Assembly broadened the duties of the treasurer, making it within his domain to issue bonds to raise money for specific projects within the state. The 1883 law stipulated that $75,000 was to be raised by subscriptions to tax exempt bonds. The money was to be used for the purchase of property to be used by the state insane asylum. The treasurer’s records of the bond sales were to show bonds issued, amounts, and dates of redemption.
With the 1897 constitution the position of state treasurer ceased to be an appointive one; the treasurer became an elected official with a two-year term of office. At this time he was also named a member of the Board of Pardons. It was not until an amendment was attached to the constitution in 1980 that the treasurer’s term of office was lengthened from two years to the present four-year term.
The current position of the state treasurer reflects the increasingly complex fiscal responsibilities incurred by the state as it has moved into the late twentieth century. The treasurer continues to be bound to the state “in the penal sum of $125,000” and is legally responsible for all collectors appointed by him in his roles as treasurer and trustee of the school fund. Funds of the state continued to be deposited in separate accounts (general and school) in the Farmers’ State Band until the late 1970’s. With 1981 legislation the state divested itself of its stock/shares in the bank; the treasurer deposited the proceeds of the sales in a special fund or funds. (For further information see the State Banking Commission, RG 1325.)
When the state of Delaware experienced periods of financial crises, the treasurer was authorized to borrow money from the school fund to finance state expenses. In 1909 the General Assembly took specific steps to alleviate the state debt problem. A sinking fund was created, and all monies and securities credited to this account were to be used for the “extinguishment of the public funded debt of the state.” The state treasurer, designated as the commissioner of the sinking fund, was responsible for investing money in “good state, county, and municipal bonds;” reinvesting the interest; keeping records of all transactions which document the “consent and approval of the governor, secretary of state, and auditor of accounts” of his actions; and presenting to the General Assembly an annual accounting of his activities as sinking fund commissioner and the state of the account. In 1951, the sinking fund was liquidated and the treasurer, by order of the General Assembly, transferred all assets into the general fund. As the century progressed and the government played a larger role in the lives of its citizens, the state treasurer assumed ex officio duties as a member of numerous state boards monitoring state expenditures. In 1939 the treasurer was named a full member of the Permanent Budget Commission (RG 1312). In 1963 the Budget Commission (RG 1314) came into existence, and the treasurer again served as, and continues to serve as a full member, meeting quarterly with other commission members to review “anticipated expenditures and revenues and the fiscal affairs” of the agencies provided for in the budget. In order to assist the treasurer with the increasing amount of responsibility given him by the legislature, the 1931 General Assembly gave the treasurer the authority to appoint a deputy state treasurer. This deputy assumes the treasurer’s responsibilities in his absence or when so directed by the state treasurer. If necessary, the treasurer can remove the deputy.
The legislature began to address the monetary needs of unemployed state residents, establishing an unemployment compensation commission in 1937. Employers were required to make contributions to a fund designed to help and protect employees and the state in times of high unemployment. Such monies were administered by the unemployment compensation fund on which the state treasurer served as treasurer and custodian. In 1937, he administered the fund in accord with the directives of the commission. Today responsibility for the administration of the unemployment compensation fund rests with the Department of Labor (RG 1580).
Benefits for state employees were addressed formally in 1963 with the initiation of voluntary payroll deduction plan for savings in state credit unions and/or hospital insurance. The state treasurer, upon written authorization from a state employee, deducts such sums as directed. He also notifies health carriers of subscribers and pays any additional sums as required from non appropriated general fund monies. The treasurer is responsible for clerical administration of all state pension funds, determines eligibility for nondisability retirement pension benefits, and determines the eligibility of paraplegic veterans benefits.
During the years 1970-1974 the financial responsibilities of the state were placed in the Department of Finance (RG 1460). During this time all of the powers, duties, and functions of the state treasurer were transferred to the Division of Treasury within that department. With the 1974 repeal of the statute the office of the state treasurer once again became an independent branch of the state government. At which time the state treasurer assumed many of the duties given to the secretary of finance, between 1970 and 1978 some of which had been his prior to 1970 and some that were new. He has specific duties with respect to the administration of social security for state employees. He may enter into agreements on behalf of the state with the Federal Security Administrator in order to extend federal old age benefits to eligible employees. This fund is kept separate from other funds. The state treasurer is the ex officio treasurer and custodian of the fund, paying all warrants drawn upon it. Other responsibilities accruing to the treasurer as custodian of the fund include making and publishing rules of administration and preparing studies and reports concerning old age and survivors insurance protection.
Among the other functions the state treasurer performs are serving as an ex officio member of the Cash Management Policy Board which establishes policies for the investment of all money belonging to the state; investing such monies, except state pension funds or state deferred compensation funds, as directed by the board; serving as custodian of and administrator of the Capital Investment Fund and investing its monies as directed by the cash management policy board; refunding improperly collected fees; and serving as an ex officio member of the Deferred Compensation Council and clerically administering the program and making authorized payroll deductions for state employees. The state treasurer, acting as one of the issuing officers of bonds and notes of the state, continues to oversee the terms, contents, forms, sales and places of payments of bonds and or notes; issue replacement bonds or revenue notes when necessary; and now prepares, certifies as accurate, and delivers weekly debt statements to the controller general and Delaware Development Office when the General Assembly is in session.
While many responsibilities have been altered or added, the essence of the position of state treasurer; the effective administration of the state of Delaware’s finances through the receipts and disbursements of funds, remains much the same as it was originally established by the 1778 legislation.
1. Dolan, Paul and James R. Soles, Government of Delaware, Newark: University of Delaware Press, 1976, p. 129.
2. 2 D.L., ch. 22b, ss 2.
3. Ibid, ss 6.
4. 2 D.L., ch. 22, ss 11.
6. Ibid, ss 9.
8. 2 D.L., ch. LXXX111, ss. 26; 2 D.L., ch. CCXLV11, ss 7.
9. 2 D.L., ch. 56, ss 17; 2 D.L., ch. 85b, ss 2; 2 D.L., ch. 107, ss 13 & 13; 2 D.L., ch. 138b, ss 12.
10. 1 D.L., 1792 Constitution, article VIII.
11. 1 D.L., ch. 105c, ss 1-5.
12. 6 D.L., ch. 144.
13. 6 D.L., ch. 190, ss 1-5.
14. 5 D.L., ch. 240.
15. 6 D.L., ch. 199.
16. 2 D.L., ch. 198; 10 D.L., ch. 111; 12 D.L., ch. 125, ss. 1.
17. 7 D.L., ch. 204, ss 3; 7 D.L., ch. 214; 12 D.L., ch. 347.
18. 11 D.L., ch. 508, ss 1-4.
19. 14 D.L., ch. 367.
20. Ibid, ch. 40.
21. Ibid, ch. 606.
22. 25 D.L., ch. 51, ss 1-4.
23. 13 D.L., ch. 2.
24. Ibid., ch. 390.
25. Ibid., ch. 116, ss 13 & 14.
26. Ibid., ch. 77.
27. 16 D.L., ch. 153.
28. 17 D.L., Title 2, ch. 458, ss 1-4.
29. 1897 Constitution, Article III, ss 21; Ibid, Article VIII, ss 2.
30. 62 D.L., ch. 273, ss 1 & 2.
31. 3 D.L., ch. 10, ss 4-6; 4 D.L., ch. 122, ss 2 & 3.
32. 63 D.L., ch. 186, ss. 2; 63 D.L., ch. 387, ss 6.
33. 19 D.L., ch. 841; 19 D.L., ch. 868.
34. 25 D.L., ch. 76, ss 3.
35. Ibid., ss 4-7.
36. 48 D.L., ch. 246, ss 1.
37. 19 D.L., ch. 853; 19 D.L., ch. 856.
38. 23 D.L., ch. 82, ss. 1; 20 D.L., ch. 392, ss 51; 24 D.L., ch. 62, ss 1; 27 D.L., ch. 126, ss 4.
39. 42 D.L., ch. 204, ss 1 & 2; 43 D.L., ch. 284; 54 D.L., ch. 29, ss 5.
40. 47 D.L., ch. 1.
41. 16 D.L., ch. 258, ss 9(b); 58 D.L., ch. 143.
42. 54 D.L., ch. 190, ss 1.
43. 57 D.L., ch. 319.
44. 42 D.L., ch. 75, ss 1 & 2; 57 D.L., ch. 319; 62 D.L., ch. 158, ss 2.
45. 57 D.L., ch. 549; ss 8307, 8308.
46. 59 D.L., ch. 378; 61 D.L., ch. 468.
47. 48 D.L., ch. 344, ss 3 (a-2), (b), 6.
48. 48 D.L., ch. 344, ss 6, 7, & 8; 57 D.L., ch. 741; 61 D.L., ch. 468.
49. 48 D.L., ss 8 & 9.
50. 63 D.L., ch. 142, ss 2.
51. 54 D.L., ch. 32; 57 D.L., ch. 582, ss 3; 59 D.L., ch. 378, ss 7.
52. 56 D.L., ch. 144; 57 D.L., ch. 741, ss 34 (b); 59 D.L., ch. 378; 61 D.L., ch. 539.
53. 54 D.L., ch. 124; 60 D.L., ch. 146.
54. 54 D.L., ch. 124; 59 D.L., ch. 378; 57 D.L., ch. 279; 62 D.L., ch. 146; 63 D.L., ch. 142.
sle; March 2, 1989 (rewrite)
Term used for Chief Executive official now called Governor.
Related Topics: Treasurer