The Committee on Finance is one of the original committees established in the Senate. First created in 1815 as a select committee and known as the Committee on Finance and an [sic] Uniform National Currency, it was formed to alleviate economic issues arising from the War of 1812. On December 10, 1816 the Senate officially created the Committee on Finance as a standing committee. Originally, the Committee had power over tariffs, taxation, banking and currency issues and appropriations. Under this authority the committee played an influential role in the most heated topics of the era; including numerous tariffs issues and the Bank War. The committee was also influential in the creation of the Department of Interior in 1849. Under the Chairmanship of William Pitt Fessenden, the committee played a decisive role during the Civil War. Appropriating all funds for the war effort as well as raising enough funds to finance the war through tariffs and the nation's first income tax. Additionally, the committee produced the Legal Tender Act of 1862, the nation's first reliance on paper currency.
In 1865 the House of Representatives created an Appropriations Committee to relieve the burden from the Committee on Ways and Means. The Senate followed this example by forming the Appropriations Committee in 1867.
Despite the loss of one of its signature duties the committee continued to play a prominent role in the major issues of the nation. The committee was at the center of the debate over the silver question in the latter half of the 19th Century. Passage of the Bland-Allison Act and the Sherman Silver Purchase Act were attempts to remedy the demand for silver, though the silver cause would eventually fail by the end of the century. The committee also continued to play a role in the debate over income taxes. The repeal of the Civil War income taxes in the 1870s would eventually be raised in 1894 with the passage of a new income tax law. The Supreme Court's decision in Pollack v. Farmers' Loan and Trust Company ruled the income tax as unconstitutional, since it was not based on apportionment. The fight for an income tax finally culminated with the Payne-Aldrich Tariff Act of 1909. In order to pass the new tariff Senate leaders, including Chairman Nelson Aldrich, allowed for a Constitutional Amendment to be passed. Four years later the 16th Amendment was officially ratified and in 1913 the nation's first peacetime income tax was instituted.
