Editing Martin Van Buren (section)

===Panic of 1837===
{{main|Panic of 1837}}
[[File:Jackson and Van Buren, 1837.jpg|thumb|''The Modern [[Balaam#Hebrew Bible|Balaam and His Ass]]'', an 1837 caricature placing the blame for the Panic of 1837 and the perilous state of the banking system on outgoing President Andrew Jackson, shown riding a donkey, while President Martin Van Buren comments approvingly]]
When Van Buren entered office, the nation's economic health had taken a turn for the worse and the prosperity of the early 1830s was over. Two months into his presidency, on May&nbsp;10, 1837, some important state banks in New York, running out of hard currency reserves, refused to convert paper money into gold or silver, and other financial institutions throughout the nation quickly followed suit. This [[financial crisis]] would become known as the [[Panic of 1837]].<ref name=MBdomestic>{{cite web| url=https://millercenter.org/president/vanburen/domestic-affairs| title=Martin Van Buren: Domestic affairs| publisher=Miller Center of Public Affairs University of Virginia| access-date=March 6, 2017| date=October 4, 2016| archive-date=May 17, 2021| archive-url=https://web.archive.org/web/20210517210726/https://millercenter.org/president/vanburen/domestic-affairs| url-status=live}}</ref> The Panic was followed by a five-year [[Depression (economics)|depression]] in which banks failed and unemployment reached record highs.<ref>{{cite book |first1=W. J. |last1=Rorabaugh |first2=Donald T. |last2=Critchlow |first3=Paula C. |last3=Baker |year=2004 |url=https://books.google.com/books?id=VL_6X5zWOokC&pg=PA210 |title=America's promise: a concise history of the United States |publisher=Rowman & Littlefield |page=210 |isbn=978-0-7425-1189-7 }}{{Dead link|date=September 2023 |bot=InternetArchiveBot |fix-attempted=yes }}</ref>

Van Buren blamed the economic collapse on greedy American and foreign business and financial institutions, as well as the over-extension of credit by U.S. banks. Whig leaders in Congress blamed the Democrats, along with Andrew Jackson's economic policies,<ref name=MBdomestic/> specifically his 1836 [[Specie Circular]]. Cries of "rescind the circular!" went up and former president Jackson sent word to Van Buren asking him not to rescind the order, believing that it had to be given enough time to work. Others, like [[Nicholas Biddle (banker)|Nicholas Biddle]], believed that Jackson's [[Bank War#Jackson's dismantling of the BUS|dismantling of the Bank of the United States]] was directly responsible for the irresponsible creation of paper money by the state banks which had precipitated this panic.<ref name="Seigenthaler">{{cite book|last1=Seigenthaler|first1=John|last2=Schlesinger|first2=Arthur Meier Jr.|title=James K Polk|publisher=Macmillen|year=2004|pages=[https://archive.org/details/jameskpolk0000seig/page/58 58–60]|isbn=978-0-8050-6942-6|url=https://archive.org/details/jameskpolk0000seig/page/58}}</ref> The Panic of 1837 loomed large over the [[United States elections, 1838|1838 election cycle]], as the carryover effects of the economic downturn led to Whig gains in both the U.S. House and Senate. The state elections in 1837 and 1838 were also disastrous for the Democrats,<ref>{{cite book |last=Leonard |first=Gerald |date=2002 |title=The Invention of Party Politics: Federalism, Popular Sovereignty, and Constitutional Development in Jacksonian Illinois |url=https://books.google.com/books?id=d89FAwAAQBAJ&pg=PA177 |location=Chapel Hill|publisher=University of North Carolina Press |page=177 |isbn=978-0-8078-2744-4}}</ref> and the partial economic recovery in 1838 was offset by a second commercial crisis later that year.<ref>{{cite book |last=Churella |first=Albert J. |date=2013 |title=The Pennsylvania Railroad: Building an Empire, 1846–1917 |volume=1 |url=https://books.google.com/books?id=OXdjEZke74QC&pg=PA69 |location=Philadelphia|publisher=University of Pennsylvania Press |page=69 |isbn=978-0-8122-0762-0}}</ref>

To address the crisis, the Whigs proposed rechartering the [[History of central banking in the United States|national bank]]. The president countered by proposing the establishment of an [[Independent Treasury|independent U.S. treasury]], which he contended would take the politics out of the nation's money supply. Under the plan, the government would hold its money in [[Hard money (policy)|gold or silver]], and would be restricted from printing [[Banknote|paper money]] at will; both measures were designed to prevent inflation.<ref>{{cite book|title=Exploring American History: From Colonial Times to 1877|volume=10|editor1-last=Lansford|editor1-first=Tom|editor2-last=Woods|editor2-first=Thomas E.|date=2008|publisher=Marshall Cavendish|location=New York|isbn=978-0-7614-7758-7|url=https://books.google.com/books?id=02K5EYvo5loC&pg=PA1047 |page=1046}}</ref> The plan would permanently separate the government from private banks by storing government funds in government vaults rather than in private banks.{{sfn|Wilson|1984|pp=58–62}} Van Buren announced his proposal in September&nbsp;1837,<ref name=MBdomestic/> but an alliance of conservative Democrats and Whigs prevented it from becoming law until 1840.<ref name=Morrison456>{{cite book | last = Morison | first = Samuel Eliot | author-link = Samuel Eliot Morison | title = The Oxford History of the American People | url = https://archive.org/details/oxfordhistoryof00mori | url-access = registration | year = 1965 | publisher = Oxford University Press | location = New York | page=[https://archive.org/details/oxfordhistoryof00mori/page/456 456]}}</ref> As the debate continued, conservative Democrats like Rives defected to the Whig Party, which itself grew more unified in its opposition to Van Buren.{{sfn|Wilson|1984|pp=61–62}} The Whigs would abolish the Independent Treasury system in 1841, but it was revived in 1846, and remained in place until the passage of the [[Federal Reserve Act]] in 1913.{{sfn|Wilson|1984|p=210}} More important for Van Buren's immediate future, the depression would be a major issue in his upcoming re-election campaign.<ref name=MBdomestic/>