As a congressman, Howell Cobb (1815-1865) had supported the presidential campaign of James Buchanan, and the victorious Buchanan appointed him Secretary of the Treasury in 1857. Like his predecessor, Secretary James Guthrie, Cobb felt that the accumulating surplus in the treasury vaults was causing stringency in the money market. To relieve this, he introduced surplus funds into circulation by buying back government bonds from commercial banks, which had purchased them as investments.
When a panic hit in 1857, the Treasury was in the embarrassing situation of having empty coffers, and it had to rely for the first time on commercial banks to buy federal bonds and relieve the crisis. The Manly crisis had past by in 1858, but recovery had not yet set in when the threat of secession of the Southern states caused another business disturbance. Customs receipts began falling off as the Southern states refused to cooperate in the collection of duties, and the deficit grew. Cobb recommended higher tariffs in order to raise much needed revenue but Congress ignored his suggestions. It was not until 1860, Cobb's last year in office, that Congress passed a bill to raise revenue through higher tariffs. When Abraham Lincoln was elected President in 1860, Cobb, a Southerner, believing that this justified secession, resigned from the cabinet urging his native state of Georgia to leave the Union.
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