John G. Carlisle (1835-1910) resigned from the Senate in 1893 to become President Cleveland's Secretary of the Treasury. As Secretary he was faced with declining Treasury gold reserves, a trend begun during the administration of his predecessor, Secretary Charles Foster. Shortly after he took office in 1893, there occurred a severe nationwide panic. Carlisle attributed the financial ills of the country to the over issue of government notes based on silver, and demanded their withdrawal and a return to a gold standard.
The Sherman Silver Purchase Act was repealed in 1893, and the Secretary of the Treasury was relieved from his obligation to buy silver. Carlisle then began to retire the Sherman silver notes. (Final provision for their retirement was made in the Gold Standard Act of 1900, which returned the country to a currency based on gold.) The Panic of 1893 also set the stage for the introduction of an income tax that same year, to provide the government with steady revenue. The tax was declared unconstitutional and repealed in 1895, and the revenue problem continued. (The tax was finally made constitutional by the ratification of the Sixteenth Amendment and reintroduced permanently in 1913.) Carlisle resigned at the end of Cleveland's term in 1897.
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