All politics are local. That is what President Martin Van Buren wanted congress to remember in 1837. In that year, he proposed his independent treasury system, and his opponents were claiming that recent elections showed that the will of the people were against his fiscal plans of the National Treasury.
"Local elections for State officers have, however, been held in several of the States, at which the expediency of the plan proposed by the Executive has been. more or less discussed. You will, I am confident, yield to their results the respect due to every expression of the public voice. Desiring, however, to arrive at truth and a just view of the subject in all its bearings, you will at the same time remember that questions of far deeper and more immediate local interest than the fiscal plans of the National Treasury were involved in those elections." - Martin Van Buren 1837
In the 1837 House of Representative race, National Republicans had a net gain of 25 seats. Jacksonian Democrats were still in the majority, but the elections were a sure sign that voters wanted a change. On the minds of many voters was the outgoing president's war on the National bank. After Jackson refused to recognize the Second National Bank of the United States, the U.S. treasury was transferred to state banks and in his final days, he and congress redistributed a federal surplus of $37 million from the federal treasury to the states. Following this, increased government spending resulted in the Treasury withdrawing $9 million from the state banks, causing several of them to fail, contributing to what is known as the panic of 1837. Jackson's war on the bank which helped him gain reelection in 1833 was now weighing heavy on the new Martin Van Buren administration and the Democrats and was opening the door to victory for the recently formed Whig party who supported a strong national bank.
To make matters worse, 11 months into Van Buren's first term, the Whig party wiped out the Democrats in New York state. In the New York state Assembly, the Whig party took 101 seats to the Democrat's 27 seats in the state Assembly. Contemporary history blames this loss on the Panic of 1837. On May 10, of that year panicked investors and a bank run caused the New York city banks to run out of gold and silver and immediately suspend specie payments. Then as now, many blamed this turn of events and the political fallout on both the Jackson and the Van Buren administration's plan to destroy the state banks and their failure to recharter the Second Bank of the United States. President Van Buren, offered a different explanation. In his first State of the Union address, just one month after the New York election, Van Buren reminded Congress "that questions of far deeper and more immediate local interest than the fiscal plans of the National Treasury were involved in those elections". According to Van Buren, it was not the will of the people to turn over the US Treasury to private banks, but rather it was the will of the state legislatures. After all, these private state banks owed their own corporate existence to the will of the state legislatures. In other words, it was not the will of the people to shut down the state banks, but the will of the Whig party, any talk of political winds on the side of a national bank was fake news.
"those States more than one hundred and sixty millions of bank capital, of which large portions were subject to actual forfeiture, other large portions upheld only by special and limited legislative indulgences, and most of it, if not all, to a greater or less extent dependent for a continuance of its corporate existence upon the will of the State legislatures to be then chosen" - Martin Van Buren 1837
President Martin Van Buren refused to let the elections get him down. He was ready to work with Congress and push forward a proposal that would be a compromise that would maintain central control of the US Treasury without re-establishing the Bank of the United States. In his first year, Van Buren proposed to establish an independent treasury system that would discontinue the use of the powerful state banks and replace it with an agency of public officers to manage the U.S. Treasury. The federal government's deposits would be deposited in a series of sub treasuries. In Van Buren's mind there were three options to managing the US Treasury. One, rechartering of the Second Bank of the United States, two, the revival with modifications of depositing the moneys in private state banks, and three establish an independent treasury system. Van Buren proposed the third, but such a compromise was a tough sell. It narrowly passed in the house by a vote of 25-23 in October, and further consideration was postponed in the House by a vote of 120 to 107. The Whig party wanted nothing less than a rechartering of the Bank of the United States, members of Van Buren's own party continued to support the private state banks, and still some Democrats distrusted all banks. The lines were drawn, and President Van Buren had a long hard path to victory ahead. The day was December 5th, 1837, and President Martin Van Buren shared these words on the subject in his State of the Union Address regarding his proposal of an independent treasury system.
"Your attention was at the last session invited to the necessity of additional legislative provisions in respect to the collection, safe-keeping, and transfer of the public money. No law having been then matured, and not understanding the proceedings of Congress as intended to be final, it becomes my duty again to bring the subject to your notice.
On that occasion three modes of performing this branch of the public service were presented for consideration. These were, the creation of a national bank; the revival, with modifications, of the deposit system established by the act of the 23d of June, 1836, permitting the use of the public moneys by the banks; and the discontinuance of the use of such institutions for the purposes referred to, with suitable provisions for their accomplishment through the agency of public officers. Considering the opinions of both Houses of Congress on the first two propositions as expressed in the negative, in which I entirely concur, it is unnecessary for me again in to recur to them. In respect to the last, you have had an opportunity since your adjournment not only to test still further the expediency of the measure by the continued practical operation of such parts of it as are now in force, but also to discover what should ever be sought for and regarded with the utmost deference--the opinions and wishes of the people.
The national will is the supreme law of the Republic, and on all subjects within the limits of his constitutional powers should be faithfully obeyed by the public servant. Since the measure in question was submitted to your consideration most of you have enjoyed the advantage of personal communication with your constituents. For one State only has an election been held for the Federal Government; but the early day at which it took place deprived the measure under consideration of much of the support it might otherwise have derived from the result. Local elections for State officers have, however, been held in several of the States, at which the expediency of the plan proposed by the Executive has been. more or less discussed. You will, I am confident, yield to their results the respect due to every expression of the public voice. Desiring, however, to arrive at truth and a just view of the subject in all its bearings, you will at the same time remember that questions of far deeper and more immediate local interest than the fiscal plans of the National Treasury were involved in those elections. Above all, we can not overlook the striking fact that there were at the time in those States more than one hundred and sixty millions of bank capital, of which large portions were subject to actual forfeiture, other large portions upheld only by special and limited legislative indulgences, and most of it, if not all, to a greater or less extent dependent for a continuance of its corporate existence upon the will of the State legislatures to be then chosen. Apprised of this circumstance, you will judge whether it is not most probable that the peculiar condition of that vast interest in these respects, the extent to which it has been spread through all the ramifications of society, its direct connection with the then pending elections, and the feelings it was calculated to infuse into the canvass have exercised a far greater influence over the result than any which could possibly have been produced by a conflict of opinion in respect to a question in the administration of the General Government more remote and far less important in its bearings upon that interest.
I have found no reason to change my own opinion as to the expediency of adopting the system proposed, being perfectly satisfied that there will be neither stability nor safety either in the fiscal affairs of the Government or in the pecuniary transactions of individuals and corporations so long as a connection exists between them which, like the past, offers such strong inducements to make them the subjects of political agitation. Indeed, I am more than ever convinced of the dangers to which the free and unbiased exercise of political opinion--the only sure foundation and safeguard of republican government--would be exposed by any further increase of the already overgrown influence of corporate authorities. I can not, therefore, consistently with my views of duty, advise a renewal of a connection which circumstances have dissolved."
Resources
“First Annual Message.” First Annual Message | The American Presidency Project, 5 Dec. 1837, www.presidency.ucsb.edu/documents/first-annual-message-4
Martin Van Buren - The independent treasury, https://www.presidentprofiles.com/Washington-Johnson/Martin-Van-Buren-The-independent-treasury.html
MARTIN VAN BUREN: DOMESTIC AFFAIRS, https://millercenter.org/president/vanburen/domestic-affairs
No comments:
Post a Comment