PRESIDENT.--SUB-TREASURY BILL
Van Buren's bearing in the crisis was admirable. Even those who have
treated him with animosity or contempt do not here refuse him high
praise. "In this one question," says Von Holst, "he really evinced
courage, firmness, and statesmanlike insight.... Van Buren bore the
storm bravely. He repelled all reproaches with decision, but with no
bitterness.... Van Buren unquestionably merited well of the country,
because he refused his coöperation, in accordance with the guardianship
principle of the old absolutisms, to accustom the people of the Republic
also to see the government enter as a saving _deus ex machina_ in every
calamity brought about by their own fault and folly.... Van Buren had
won a brilliant victory and placed his countrymen under lasting
obligations to him."[13]
Van Buren met the extra session with a message which marks the zenith of
his political wisdom. It is one of the greatest of American state
papers. With clear, unflinching, and unanswerable logic he faced the
crisis. There was no effort to evade the questions put to him, or to
divert public attention from the true issue. The government could not,
he showed, help people earn their living; but it could refuse to aid the
deception that paper was gold, and the delusion that value could arise
without labor. The masterly argument seems long to a sauntering reader;
but it treated a difficult question which had to be answered by the
multitudes of a democracy many of whom were pinched and excited by
personal distresses and anxiety and who were sure to read it. Few
episodes in our political history give one more exalted appreciation of
the good sense of the American masses, than that, in this stress of
national suffering, a skillful politician should have appealed to them,
not even sweetening the truth, but resisting with direct and painful
sobriety their angry and natural impulses; this, too, when most of the
talented and popular leaders were promoting, rather than reducing or
diverting the heated folly of the time.
Van Buren quietly began by saying that the law required the secretary of
the treasury to deposit public moneys only in banks that paid their
notes in specie. All the banks had stopped such payment. It was obvious
therefore that some other custody of public moneys must be provided, and
it was for this that he had summoned Congress. He then began what was
really an address to the people. He pointed out that the government had
not caused, and that it could not cure, the profound commercial
distemper. Antecedent causes had been stimulated by the enormous
inflations of bank currency and other credits, and among them the many
millions of foreign loans, and the lavish accommodations extended "by
foreign dealers to our merchants." Thence had come the spirit of
reckless speculation, and from that a foreign debt of more than thirty
millions; the extension to traders in the interior of credits for
supplies greatly beyond the wants of the people; the investment of
thirty-nine and a half millions in unproductive public lands; the
creation of debts to an almost countless amount for real estate in
existing or anticipated cities and villages; the expenditure of immense
sums in improvements ruinously improvident; the diversion to other
pursuits of labor that should have gone to agriculture, so that this
first of agricultural countries had imported two millions of dollars
worth of grain in the first six months of 1837; and the rapid growth of
luxurious habits founded too often on merely fancied wealth. These evils
had been aggravated by the great loss of capital in the famous fire at
New York in December, 1835, a loss whose effects, though real, were not
at once apparent because of the shifting and postponement of the burdens
through facilities of credit, by the disturbance which the transfers of
public moneys in the distribution among the States caused, and by
necessities of foreign creditors which made them seek to withdraw specie
from the United States. He pointed out the unprecedented expansion of
credit in Great Britain at the same time, and, with the redundancy of
paper currency[14] there, the rise of adventurous and unwholesome
speculation.
To the demand for a reëstablishment of a national bank, he replied that
quite a contrary thing must be done; that the fiscal concerns of the
government must be separated from those of individuals or corporations;
that to create such a bank would be to disregard the popular will twice
solemnly and unequivocally expressed; that the same motives would
operate on the administrators of a national as on those of state banks;
that the Bank of the United States had not prevented former and similar
embarrassments, and that the Bank of England had but lately failed in
its own land to prevent serious abuses of credit. He knew indeed of loud
and serious complaint because the government did not now aid commercial
exchange. But this was no part of its duty. It was not the province of
government to aid individuals in the transfer of their funds otherwise
than through the facilities of the post-office. As justly might the
government be asked to transport merchandise. These were operations of
trade to be conducted by those who were interested in them. Throughout
Europe domestic as well as foreign exchanges were carried on by private
houses, and often, if not generally, without the assistance of banks.
Our own exchanges ought to be carried on by private enterprise and
competition, without legislative assistance, free from the influence of
political agitation, and from the neglect, partiality, injustice, and
oppression unavoidably attending the interference of government with the
proper concerns of individuals. His own views, Van Buren declared, were
unchanged. Before his election he had distinctly apprised the people
that he would not aid in the reëstablishment of a national bank. His
conviction had been strengthened that such a bank meant a concentrated
money power hostile to the spirit and permanency of our republican
institutions.
He then turned to those state banks which had held government deposits.
At all times they had held some of the federal moneys, and since 1833
they had held the whole. Since that year the utmost security had been
required from them for such moneys; but when lately called upon to pay
the surplus to the States, they had, while curtailing their discounts
and increasing the general distress, been with the other banks fatally
involved in the revulsion. Under these circumstances it was a solemn
duty to inquire whether the evils inherent in any connection between the
government and banks of issue were not such as to require a divorce.
Ought the moneys taken from the people for public uses longer to be
deposited in banks and thence to be loaned for the profit of private
persons? Ought not the collection, safe-keeping, transfer, and
disbursement of public moneys to be managed by public officers? The
public revenues must be limited to public expenses so that there should
be no great surplus. The care of the moneys inevitably accumulated from
time to time would involve expense; but this was a trifling
consideration in so important a matter. Personally it would be agreeable
to him to be free from concern in the custody and disbursement of the
public revenue. Not indeed that he would shrink from a proper official
responsibility, but because he firmly believed the capacity of the
executive for usefulness was in no degree promoted by the possession of
patronage not actually necessary. But he was clear that the connection
of the executive with powerful moneyed institutions, capable of
ministering to the interests of men in points where they were most
accessible to corruption, was more liable to abuse than his
constitutional agency in the appointment and control of the few public
officers required by the proposed plan.
Thus was announced the independent treasury scheme, the divorce of bank
and state, the famous achievement of Van Buren's presidency. He argued
besides elaborately in favor of the specie circular. An individual
could, if he pleased, accept payment in a paper promise or in any other
way as he saw fit. But a public servant should in exchange for public
domain take only what was universally deemed valuable. He ought not to
have a discretion to measure the value of mere promises. The $9,367,200
in the treasury for deposit with the States in October, or rather for a
permanent distribution to them, he desired to retain for federal
necessities. This would doubtless inconvenience States which had relied
on the federal donation; but as the United States needed the money to
meet its own obligations, there was neither justice nor expediency in
generously giving it away. Van Buren here left the defensive with a
menace to the banks that a bankruptcy law for corporations suspending
specie payment might impose a salutary check on the issues of paper
money.
The President finally spoke in words which seem golden to all who share
his view of the ends of government. "Those who look to the action of
this government," he said, "for specific aid to the citizen to relieve
embarrassments arising from losses by revulsions in commerce and credit,
lose sight of the ends for which it was created, and the powers with
which it is clothed. It was established to give security to us all, in
our lawful and honorable pursuits, under the lasting safeguard of
republican institutions. It was not intended to confer special favors on
individuals, or on any classes of them; to create systems of
agriculture, manufactures, or trade; or to engage in them, either
separately or in connection with individual citizens or
organizations.... All communities are apt to look to government for too
much.... We are prone to do so especially at periods of sudden
embarrassment and distress.... The less government interferes with
private pursuits, the better for the general prosperity. It is not its
legitimate object to make men rich, or to repair by direct grants of
money or legislation in favor of particular pursuits, losses not
incurred in the public service." To avoid unnecessary interference with
such pursuits would be far more beneficial than efforts to assist
limited interests, efforts eagerly, but perhaps naturally, sought for
under temporary pressure. Congress and himself, Van Buren closed by
saying, acted for a people to whom the truth, however unpromising, could
always be spoken with safety, and who, in the phrase of which he was
fond, were sure never to desert a public functionary honestly laboring
for the public good.
An angry and almost terrible outburst received this plain, honest, and
wise declaration that the people must repair their own disasters without
paternal help of government; and that, rather than to promote the
extension of credit with public moneys, the crisis ought to afford means
of departing forever from that policy. Most of the able men who to this
generation have seemed the larger statesmen of the day, joined with
passionate declamation in the furious gust of folly. It was a favorite
delusion that government was a separate entity which could help the
people, and not a mere agency, simply using wealth and power which the
people must themselves create. Webster, in a speech at Madison, Indiana,
on June 1, 1837, professed his conscientious convictions that all the
disasters had proceeded from "the measures of the general government in
relation to the currency." He ridiculed the idea that the people had
helped cause them. The people, he thought, had no lesson to learn.
"Over-trading, over-buying, over-selling, over-speculation,
over-production,"--these, he said, were terms he "could not very well
understand." In his speech of December, 1836, on the specie circular, he
had given a leonine laugh at the idea of there being inflation. If he
were asked, he said, what kept up the value of money "in this vast and
sudden expansion and increase of it," he should answer that it was kept
up "by an equally vast and sudden increase in the property of the
country." That this amazing utterance upon the dynamics of national
economy might be clear, he added that the vast and sudden increase was
"in the value of that property intrinsic as well as marketable." No
speculator of the day said a more foolish thing than did this towering
statesman. There were, he admitted, "other minor causes," but they were
"not worth enumerating." "The great and immediate origin of the evil"
was "disturbances in the exchange ... caused by the agency of the
government itself." At the extra session Webster described the shock
caused him by the President's "disregard for the public distress," by
his "exclusive concern for the interest of government and revenue, by
his refusal to prescribe for the sickness and disease of society," by
the separation he would draw "between the interests of the government
and the interests of the people." For his part he would be warm and
generous in his statesmanship. He resisted the bill to suspend the
"deposit" with the States; he would in the coming October pay out the
last installment, stricken though the treasury was. He would again
sweeten the popular palate with government manna, bitter as it had
proved itself to the belly. It was the duty of the government, he said,
to aid in exchanges by establishing a paper currency; he and those with
him preferred the long-tried, well-approved practice of the government
to letting Benton, as he said, "embrace us in his gold and silver arms
and hug us to his hard money breast." As if this were not a time for
soberness over its shameful abuses, credit, and the banks and bank-notes
which aided it were almost apotheosized. At St. Louis in the summer,
Webster, in a speech which he did not include in his collected works,
said that help must come "from the government of the United States, from
thence alone;" adding, "Upon this I risk my political reputation, my
honor, my all.... He who expects to live to see all these twenty-six
States resuming specie payments in regular succession once more, may
expect to see the restoration of the Jews. Never! He will die without
the sight."
John Quincy Adams had told his friends at home that the distribution of
the public moneys among the state banks was the most pernicious cause of
the disaster, although, differing from Webster, he admitted that "the
abuse of credit, especially by the agency of banks," and the
unrestrained pursuit of individual wealth, were the proximate causes of
the disaster, for history had testified
"Peace to corrupt, no less than war to waste."
He would punish suspension of specie payments by a bank with a
forfeiture of its charter and the imprisonment of its president and
officers. A national bank, he said, was "the only practicable expedient
for restoring and maintaining specie payments." In the extra session he
showed that the deposit banks of the South already held more money of
the government than their States would receive, if the last installment
of distribution should be paid, while the Northern banks held far less
of that money than the Northern States were to receive. He denounced as
a Southern measure the proposition to postpone this piece of
recklessness. Should the Northern States hail with shouts of Hosanna
"this evanescence of their funds from their treasuries," or be
"humbugged out of their vested rights by a howl of frenzy against
Nicholas Biddle," or be mystified out of their money and out of their
senses by a Hark follow! against all banks, or by a summons to Doctors'
Commons for a divorce of bank and state?
That skillful political weathercock, Caleb Cushing, told his
constituents at Lowell that private banking was the "shinplaster
system;" and asked whether we wished to have men who, like the
Rothschilds, make "peace or war as they choose, and wield at will the
destiny of empires." The plan of the administration was like that of "a
cowardly master of a sinking ship, to take possession of the long boat
and provisions, cut off, and leave the ship's company and passengers to
their fate." To the plausible cry of separating bank and state he would
answer, "Why not separate court and state ... or law and state ... or
custom-house and state." It was "the new nostrum of political quackery."
Clay delivered a famous speech in the Senate on September 25, 1837. He
was appalled at the heartlessness of the administration. "The people,
the States, and their banks," he said in the favorite cant of the time,
"are left to shift for themselves," as if that were not the very thing
for them to do. We were all, he said,--"people, States, Union,
banks, ... all entitled to the protecting care of a parental
government." He cried out against "a selfish solicitude for the
government itself, but a cold and heartless insensibility to the
sufferings of a bleeding people." The substitution of an exclusive
metallic currency was "forbidden by the principles of eternal justice."
For his part he saw no adequate remedy which did "not comprehend a
national bank as an essential part of it." In banking corporations,
indeed, "the interests of the rich and poor are happily blended;" nor
should we encourage here private bankers, Hopes and Barings and
Rothschilds and Hottinguers, "whose vast overgrown capitals, possessed
by the rich exclusively of the poor, control the destiny of nations."
The bill for the independent treasury was firmly pressed by the
administration. It did not deceive the people with any pretense that
banks and paper money would stand in lieu of industry, economy, and good
sense. The summer elections, then far more numerous than now, had, as
Clay warningly pointed out, gone heavily against Van Buren. The bill
passed the Senate, 26 to 20. In the House it was defeated. Upon the
election of speaker, the administration candidate, James K. Polk, had
had 116 votes to 103 for John Bell. But this very moderate majority was
insecure. A break in the administration ranks was promptly shown by the
defeat, for printers to the House, of Francis P. Blair and his partner,
who in their paper, the "Washington Globe," had firmly supported the
hard money and anti-bank policy. They received only 107 votes, about
fifteen Democrats uniting with the Whigs to defeat them. Van Buren was
unable to educate all his party to his own firm, clear-sighted views.
There was formed a small party of "conservatives," Democrats who took
what seemed, and what for the time was, the popular course. The
independent treasury bill was defeated in the House by 120 to 106.
Van Buren's proposal was carried, however, to postpone the "deposite,"
as it was called, the gift as it was, of the fourth installment of the
surplus. On October 1, Webster and Clay led the seventeen senators who
insisted upon the folly of the national treasury in its destitution
playing the magnificent donor, and further debauching the States with
streams of pretended wealth. Twenty-eight senators voted for the bill;
and in the House it was carried by 118 to 105, John Quincy Adams heading
the negative vote.
The administration further proposed the issue of $10,000,000 in treasury
notes. It was a measure strictly of temporary relief. Gold and silver
had disappeared; bank-notes were discredited. The government, whose gold
and silver the banks would not pay out, was disabled from meeting its
current obligations; and the treasury notes were proposed to meet the
necessity. They were not to be legal tender, but interest-bearing
obligations in denominations not less than $50, to be merely receivable
for all public dues, and thus to gain a credit which would secure their
circulation. This natural and moderate measure was assailed by those who
were lauding a paper currency to the skies. The radical difference was
ignored between a general currency of small as well as large bills,
without intrinsic value, adopted for all time, and a limited and
perfectly secure government loan, to be freely taken or rejected by the
people, in bills of large amounts, to meet a serious but brief
embarrassment. "Who expected," said Webster in the Senate, "that in the
fifth year of the experiment for reforming the currency, and bringing it
to an absolute gold and silver circulation, the Treasury Department
would be found recommending to us a regular emission of paper money?" He
voted, however, for the bill, the only negative votes in the Senate
being given by Clay and four others. In the House it was carried by 127
to 98.
Such was the substantial work of the extra session. To the experience of
that crisis and the wisdom with which it was met may not improbably be
ascribed the hard-money leaven which, thirty or forty years later,
prevented the great disaster of further paper inflation, and brought the
country to a currency which, if not the best, is a currency of coin and
of redeemable paper, whose value, apart from the legal-tender notes
left us by the war and the decision of the Supreme Court, depends upon
the best of securities, coin or government bonds, deposited in the
treasury, and a currency whose amount may therefore safely be left to
the natural operations of trade.
Clay's appeal for a great banking institution, which should accomplish
by magic the results of popular labor and saving, was met by a vote of
the House, 123 to 91, that it was inexpedient to charter a national
bank, many voting against a bank who had already voted against an
independent treasury. The Senate also resolved against a national bank
by 31 to 14, six senators who had voted against an independent treasury
voting also against a bank. The temporary expedient adopted by the
treasury on the suspension of the banks was therefore continued, and
public moneys were kept in the hands of public officers.
Calhoun now rejoined the Democratic party. It was only the year before
he had denounced it as "a powerful faction held together by the hopes of
public plunder;" and early in this very year he had referred to the
removal of the deposits as an act fit for "the days of Pompey or Cæsar,"
and had declared that even a Roman Senate would not have passed the
expunging resolution "until the times of Caligula and Nero." But Van
Buren, Calhoun now said, had been driven to his position; nor would he
leave the position for that reason. He referred to the strict
construction of the powers of the government involved in the divorce of
bank and state. There was no suggestion that Van Buren had become a
convert to nullification. But Calhoun could with consistency support Van
Buren. The independent treasury scheme was plainly far different from
the removal of the deposits from one great bank to many lesser ones. The
reasons for political exasperation had besides disappeared. Van Buren
was chief among the _beati possidentes_, and could not for years be
disturbed. His tact and skill left open no personal feud; he had not yet
conferred the title of Cæsar; no successor to himself was yet named by
any clear designation. Calhoun joined Silas Wright and the other
administration senators; but he still maintained a grim and independent
front.
The extra session ended on October 16. Besides the issuance of
$10,000,000 in treasury notes and the postponement of the distribution
among the States, the only measure adopted for relief was a law
permitting indulgence of payment to importers upon custom-house bonds.
As those payments were to be made in specie, and as specie had left
circulation, it was proper that the United States as a creditor should
exhibit the same leniency which was wise and necessary on the part of
other creditors.
Commercial distress had now materially abated, although many of its
wounds were still deep and unhealed. Before the regular session began in
December, substantial progress was made towards specie payments. The
price of gold in New York, which had ruled at a premium of eight and
seven eighths per cent., had fallen to five. On October 20 the banks of
New York, after waiting until Congress rose, to meet the wishes of the
United States Bank and its associates in Philadelphia, now invited
representatives from all the banks to meet in New York on November 27 to
prepare for specie payment. At this meeting the New York banks proposed
resumption on March 1, 1838, but they were defeated; and a resolution to
resume on July 1 was defeated by the votes of Pennsylvania and all the
New England States except Maine (which was divided), together with New
Jersey, Delaware, Maryland, South Carolina, and Indiana. Virginia, Ohio,
Georgia, North Carolina, Kentucky, and the District of Columbia, with
New York, made the minority. An adjournment was taken to the second
Wednesday in April, the banks being urged meanwhile to prepare for
specie payments.
The fall as well as the summer elections had been most disastrous for
the Democrats. New York, which the year before had given Van Buren
nearly 30,000 plurality, was now overwhelmingly Whig. The Van Buren
party began to be called the Loco-focos, in derision of the fancied
extravagance of their financial doctrines. The Loco-foco or Equal Rights
party proper was originally a division of the Democrats, strongly
anti-monopolist in their opinions, and especially hostile to
banks,--not only government banks but all banks,--which enjoyed the
privileges then long confirmed by special and exclusive charters. In the
fall of 1835 some of the Democratic candidates in New York were
especially obnoxious to the anti-monopolists of the party. When the
meeting to regularly confirm the nominations made in committee was
called at Tammany Hall, the anti-monopolist Democrats sought to capture
the meeting by a rush up the main stairs. The regulars, however, showed
themselves worthy of their regularity by reaching the room up the back
stairs. In a general scrimmage the gas was put out. The
anti-monopolists, perhaps used to the devices to prevent meetings which
might be hostile, were ready with candles and loco-foco matches. The
hall was quickly illuminated; and the anti-monopolists claimed that they
had defeated the nominations. The regulars were successful, however, at
the election; and they and the Whigs dubbed the anti-monopolists the
Loco-foco men. The latter in 1836 organized the Equal Rights party, and
declared it an imperative duty of the people "to recur to first
principles." Their "declaration of rights" might well have been drawn a
few years later by a student of Spencer's "Social Statics." The law,
they said, ought to do no more than restrain each man from committing
aggressions on the equal rights of other men; they declared "unqualified
hostility to bank-notes and paper money as a circulating medium," and to
all special grants by the legislature. A great cry was raised against
them as dangerous and incendiary fanatics. The Democratic press, except
the "Evening Post," edited by William Cullen Bryant, turned violently
upon the seceders. There was the same horror of them as the English at
almost the very time had of the Chartists, and which in our time is
roused by the political movements of Henry George. But with time and
familiarity Chartism and Loco-focoism alike lost their horrid aspect.
Several of the cardinal propositions of the former have been adopted in
acts of Parliament without a shudder. To the animosity of the Loco-focos
against special legislation and special privileges Americans probably
owe to-day some part of the beneficent movement in many of the States
for constitutional requirements that legislatures shall act by general
laws.
The Equal Rights party, though casting but a few votes, managed to give
the city of New York to the Whigs, a result which convinced the
Democrats that, dangerous as they were, they were less dangerous within
than without the party. The hatred which Van Buren after his message of
September, 1837, received from the banks commended him to the
Loco-focos; and in October, 1837, Tammany Hall witnessed their
reconciliation with the regular Democrats upon the moderate declaration
for equal rights. The Whigs had, indeed, been glad enough to have
Loco-foco aid and even open alliance at the polls. But none the less
they thought the Democratic welcome back of the seceders an enormity.
From this time the Democrats were, it was clear, no better than
Loco-focos, and ought to bear the name of those dangerous iconoclasts.
Van Buren met Congress in December, 1837, with still undaunted front.
His first general review of the operations of the government was but
little longer than his message to the extra session on the single topic
of finance. He refused to consider the result of the elections as a
popular disapproval of the divorce of bank and state. In only one State,
he pointed out, had a federal election been held; and in the other
elections, which had been local, he intimated that the fear of a
forfeiture of the state-bank charters for their suspension of specie
payments had determined the result. He still emphatically opposed the
connection between the government and the banks which could offer such
strong inducements for political agitation. He blew another blast
against the United States Bank, now a Pennsylvania corporation, for
continuing to reissue its notes originally made before its federal
charter had expired and since returned. He recommended a preëmption law
for the benefit of actual settlers on public lands, and a classification
of lands under different rates, to encourage the settlement of the
poorer lands near the older settlements. There was a conciliatory but
firm reference to the dispute with England over the northeastern
boundary. He announced his failure to adjust the dispute with Mexico
over the claims which had been pressed by Jackson. The Texan cloud
which six years later brought Van Buren's defeat was already
threatening.
At this session the independent or sub-treasury bill was again
introduced, and again a titanic battle was waged in the Senate. In this
encounter Clay taunted Calhoun for going over to the enemy; and Calhoun,
referring to the Adams-Clay coalition, retorted that Clay had on a
memorable occasion gone over, and had not left it to time to disclose
his motives. Here it was that, in the decorous fury of the times, both
senators stamped accusations with scorn in the dust, and hurled back
darts fallen harmless at their feet. The bill passed the Senate by 27 to
25; but Calhoun finally voted against it because there had been stricken
out the provision that government dues should be paid in specie. The
bill was again defeated in the House by 125 to 111. The latter vote was
late in June, 1838. But while Congress refused a law for it, the
independent treasury in fact existed. Under the circular issued upon the
bank suspension, the collection, keeping, and payment of federal moneys
continued to be done by federal officers. The absurdity of the
declamation about one's blood curdling at Van Buren's recommendations,
about this being the system in vogue where people were ground "to the
very dust by the awful despotism of their rulers," was becoming apparent
in the easy, natural operation of the system, dictated though it was by
necessity rather than law. The Whigs, in the sounding jeremiades of
Webster and the perfervid eloquence of Clay, were joined by the
Conservatives, former Democrats, with Tallmadge of New York and Rives of
Virginia at their head. They had retired into the cave of superior
wisdom, of which many men are fond when a popular storm seems rising
against their party; they affected oppressive grief at Van Buren's
reckless hatred of the popular welfare, and accused him of designing
entire destruction of credit in the ordinary transactions of business.
This silly charge was continually made, and gained color from the
extreme doctrines of the Equal Rights movement and the fixing of the
Loco-foco name upon the Democratic party.
The sub-treasury bill was again taken up at the long session of 1839-40
by the Congress elected in 1838. Again the wisdom of separating bank and
state, again the wrong of using public moneys to aid private business
and speculation, were stated with perfectly clear but uninspiring logic.
Again came the antiphonal cry, warm and positive, against the cruelty of
withdrawing the government from an affectionate care for the people, and
from its duty generously to help every one to earn his living. In and
out of Congress it was the debate of the time, and rightly; for it
involved a profound and critical issue, which since the foundation of
the government has been second in importance only to the questions of
slavery and national existence and reconstruction. In 1840 the bill
passed the Senate by 24 to 18 and the House by 124 to 107. This chief
monument of Van Buren's administration seemed quickly demolished by the
triumphant Whigs in 1841, but was finally set up again in 1846 without
the aid of its architect. From that time to our own, in war and in
peace, the independence of the federal treasury has been a cardinal
feature of American finance. Nor was its theory lost even in the system
of national banks and public depositories created for the tremendous
necessities of the civil war.[15]
By the spring of 1838 business had revived during the year of enforced
industry and economy among the people. In January, 1838, the premium on
gold at New York sank to three per cent.; and when the bank convention
met on the adjourned day in April, the premium was less than one per
cent. The United States Bank resisted resumption with great affectation
of public spirit, but for selfish reasons soon to be disclosed. The New
York banks, with an apology to their associates, resolved to resume by
May 10, five days before the date to which the State had legalized the
suspension. The convention adopted a resolution for general resumption
on January 1, 1839, without precluding earlier resumption by any banks
which deemed it proper. In April it was learned that the Bank of
England was shipping a million sterling to aid resumption by the banks.
On July 10, Governor Ritner of Pennsylvania by proclamation required the
banks of his State to resume by August 1. On the 13th of that month the
banks of Massachusetts, Connecticut, Rhode Island, Delaware, Maryland,
Virginia, Kentucky, Missouri, Ohio, Indiana, and Illinois yielded to the
moral coercion of the New York banks, and to the resumption now enforced
on the Bank of the United States. By the fall of 1838 resumption was
general, although the banks at the Southwest did not follow until
midwinter. Confidence was so much restored that "runs" on the banks did
not occur. The crisis seemed at an end; and Van Buren not unreasonably
fancied that he saw before the country two years of steady and sound
return to prosperity. Two such years would, in November, 1840, bring the
reward of his sagacity and endurance. But a far deeper draft upon the
vitality of the patient had been made than was supposed; and in its last
agony, eighteen months later, Biddle's bank helped to blast Van Buren's
political ambition.