A Reference Resource
The inauguration of 1837 proved less a celebration of the incoming president than a tribute to the outgoing one, Andrew Jackson. Martin Van Buren's inaugural address took wistful note of it: "In receiving from the people the sacred trust twice confided to my illustrious predecessor, and which he has discharged so faithfully and so well, I know that I can not expect to perform the arduous task with equal ability and success. But . . . I may hope that somewhat of the same cheering approbation will be found to attend upon my path." With a single exception, the new administration retained Jackson's entire cabinet, and Van Buren pledged to "tread generally in the footsteps of President Jackson."
Economic Panic of 1837
The severe downturn in the American economy that began in 1836 became Van Buren's primary concern during his presidency. Historians have identified three causes of the depression that wracked the American economy during the late 1830s. First, English banks—responding to financial troubles at home—stopped pumping money into the American economy, an important reversal since those funds had financed much of the nation's economic growth over the preceding two decades. Second, U.S. banks, which had overextended credit to their clients, began to call in loans after British banks cut their money supply. Third, President Andrew Jackson's "hard" money policies, especially the 1836 Specie Circular that aimed to stabilize what Jacksonians saw as an out-of-control economy by requiring that all purchases of federal land be made with precious metal (i.e. "hard" money) rather than paper ("soft") money, only exacerbated the credit crunch.
When Van Buren entered office, it was clear that the nation's economic health had taken a turn for the worse and that the prosperity of the early 1830s was over. Two months into his presidency, the roof fell in. On May 10, 1837, some important state banks in New York, running out of hard currency reserves, suddenly refused to convert paper money into gold or silver. Other financial institutions throughout the nation quickly followed suit. This financial crisis, the worse yet faced by the young nation, would become known as the Panic of 1837. Loans dried up, and so did new purchases; businesses and civic projects collapsed. Many Americans went unemployed and others began to go hungry. Creditors refused to accept paper currency that seemed to be losing its value by the hour. The American economy's downward spiral accelerated.
Van Buren blamed the current problems not on the Jackson administration's policies, but instead on what he viewed as greedy American and foreign business and financial institutions, as well as on the overextension of credit by U.S. banks. His political opponents, especially the Whigs, took little comfort in this analysis and were quick to blame the Democrats', and especially Jackson's, financial and monetary policies.
The question for the new president was how—and whether—to respond. Van Buren followed a course of action consistent with his Jacksonian belief in the limited powers of the federal government and a suspicion of paper money and easy credit. He called for a special session of Congress, which finally convened in September 1837, to deal with the crisis. The President announced a controversial proposal to establish an independent treasury system, in which the federal government would deposit its funds in a series of subtreasuries. Van Buren and his advisers hoped that an independent treasury would stabilize the American financial system by refusing poorly managed state banks access to government funds, which they might use recklessly. The independent treasury proposal actually reversed President Jackson's decision to deposit federal funds in state banks.
Unsurprisingly, Van Buren's critics howled. Some of these voices even came from his own party. Two groups of dissident Democrats—one supporting the state banks and the other suspicious of all banks—attacked the President's solution. The Whigs, on the other hand, traced the economic downturn to President Jackson's economic and fiscal policies, and especially his decision not to recharter the National Bank. They argued that the nation's economy required a powerful institution like a national bank to manage the economy and cultivate economic stability.
Congressional resistance to the independent treasury proposal proved difficult to overcome. Even some of the President's closest allies from New York questioned his thinking. Not until the summer of 1840 did Congress pass an independent treasury bill. By then, despite a recovery in 1839, the nation's economy had been mired in a depression for nearly four years; the problems would continue into the early 1840s. More important for Van Buren's immediate future, the depression would be a major issue in the 1840 presidential election.
Slavery, New Territories, and Native Americans
In addition to the devastating economic collapse, two other domestic flash points proved troublesome for President Van Buren. During his last months in office, President Jackson made it clear that he favored the annexation of Texas, a Mexican territory into which increasingly large numbers of Americans were moving. Americans who favored annexation were heartened by Jackson's position, while others, especially from the North, opposed annexation because it would bring into the Union another state that permitted slavery. Some opponents of annexation hinted ominously at a "slave-owner conspiracy."
Van Buren inherited this contentious political issue and tried to prevent a sectional split that would harm the Democratic Party. He announced in August 1837 that he did not support the annexation of Texas. It was enough to calm the sectional tensions over territorial expansion and slavery, which were, in truth, still relatively minor issues during Van Buren's tenure. It was not the last time, however, that Van Buren would confront these matters.
The Van Buren administration also proved a particularly hostile to Native Americans. Federal policy under Jackson had sought, through the Indian Removal Act of 1830, to move all Indian peoples to lands west of the Mississippi River. Continuing this policy, Van Buren supported further removals after his election in 1836. The federal government supervised the removal of the Cherokee people in 1838, a forced stagger west to the Mississippi in which a full quarter of the Cherokee nation died.
Some Native Americans resisted the removal policy violently, however. In Florida, the Seminole people fought upwards of 5,000 American troops, and even the death of the charismatic Seminole leader Chief Osceola in 1838 failed to quell the resistance. Fighting continued into the 1840s and brought death to thousands of Native Americans. The protracted nature of the conflict had deleterious political consequences too. The Whigs, as well as a small number of Americans who believed the removal campaign inhumane, criticized the Van Buren administration's conduct of the war.