Martin Van Buren, the eighth President of the United States, delivers his inaugural address. The speech serves largely as a commemoration of his predecessor, President Andrew Jackson. Additionally, Van Buren presents his states' rights approach to slavery.

The Panic of 1837 begins in New York when banks first suspend payments of specie. Following the collapse of credit facility, banks can no longer redeem currency notes in gold and silver. Compounding the problem, a depression in England causes the price of cotton to drop and ends British loans to the United States. An already unstable economy now suffers from additional debts and unemployment.

Van Buren announces his opposition to the annexation of Texas, primarily to make possible the ensuing peace with Mexico but also to alleviate abolitionist concerns at home.

In response to the economic crisis, Van Buren calls for a special session of Congress. As a proponent of laissez-faire, he feels no obligation toward public welfare but worries about the government's own financial situation. Refusing to participate in sectional disputes, Van Buren proposes a bank divorce policy and the establishment of an independent treasury.

A rebellion erupts in Lower and Upper Canada against the British. Sympathetic volunteers in Maine and New York rally in support with promises of various bounties and land allotments. The American volunteers cross the Niagara River into Canada and occupy Navy Island. After a series of events, Van Buren instructs General Winfield Scott to persuade the American citizens to restrain themselves from further incursions violating national law and neutrality.

Britain orders the Canadian militia to seize the American steamship Caroline, which had been supplying Canadian rebels, on the Niagara River. One American is killed, and several are wounded.

Following the Caroline incident, Van Buren criticizes the British but maintains a neutral stance in the conflict. While Van Buren's peace appeals to the invading partisans and enjoys initial success, even the Neutrality Law of 1838 -- which provides for the arrest of people and the confiscation of arms, vehicles, and supplies flowing illegally across the border -- fails to deter additional incursions. Rebel assistance by secret rebel societies will continue in Detroit, Cleveland, and along the New York and Vermont borders.

Van Buren agrees on the principle of forming an arbitration commission to settle disputed claims with Mexico.

A treaty ending the Aroostook War, which begins in 1838, is signed between the United States and Canada. Lumberjacks in Maine and New Brunswick had disputed the border and disagreed on the ownership of trees in the Aroostook Valley; the claims stemmed from an ambiguous boundary determination in the 1783 Treaty of Paris. Van Buren sends General Winfield Scott to calm matters in the area before working toward the treaty.

“Aroostook War” Ends

On March 25, 1839, Governor John Fairfield of Maine agreed to terms that ended the so-called Aroostook War. The issue at hand was the border between the American state of Maine and British Canadian province of New Brunswick. The border was a long-standing controversy which almost boiled over in 1839 when the Governor Fairfield sent militia to occupy the Aroostook River Valley. President Martin Van Buren deftly defused the crisis and paved the way for the final settlement of the boundary question, which came in 1842.

The boundary line between Maine and New Brunswick had been a matter of controversy between Britain and the United States since the end of the American Revolution. The 1783 Treaty of Paris drew the boundary with maps that were both incomplete and incorrect in regards to the region of northern Maine. Since the rivers and mountains described in the 1783 treaty were unclear, the British and American governments each had their own ideas of the border boundaries.

The situation grew more serious in 1838, when both the British and the Americans began surveying roads through the Maine lands. Additionally, lumberjacks from both countries traversed the Maine backcountry at will, angering both sides. William Harvey, the governor of New Brunswick, arrested a Maine census taker who was surveying the settlements along the Madawaska River. Finally, in January 1839, Governor Fairfield of Maine mobilized a militia and sent it to the Aroostook River Valley to expel timber cutters from New Brunswick. In response, Governor Harvey claimed that the Maine men were in New Brunswick territory and that he had the right to expel them by force.

President Van Buren turned to diplomacy to defuse the crisis. On February 26, 1839, he delivered a special message to Congress, which put forward a program of action. Van Buren both praised and criticized Governor Fairfield. Fairfield was right to expel trespassers onto Maine's territory, but he should have communicated with the governor of New Brunswick as he mobilized the militia. Van Buren said he would support Maine if it was attacked, but that Fairfield's occupation of the Aroostook was a provocation, and it had to be discontinued.

At the same time as the President addressed Congress and Maine, he negotiated with the British minister in Washington. They agreed that New Brunswick would not attack, Maine would withdraw, and both sides would agree to a joint solution to deal with incidents of trespass. The joint memorandum was controversial in Maine, but supported almost everywhere else in the United States. Van Buren sent General Winfield Scott to negotiate on the ground in Maine, and Scott negotiated a truce between Governors Harvey and Fairfield. Maine and New Brunswick tacitly agreed to divide the disputed area into spheres of interest, with Maine controlling the Aroostook River Valley and New Brunswick controlling the Madawaska River Valley. The “Aroostook War” never actually became a real war. Although President Van Buren ended the crisis, a permanent settlement was not immediate. The United States and Britain did not formally resolve the boundary dispute until the Webster-Ashburton Treaty of 1842.

Van Buren secures an agreement with England on compensation for two slave ships, the Comet and the Encomium, which had run ashore on the British territory of the Bahamas.

The U.S.S. Washington seizes the Amistad, a mutinous slave ship, and brings the captives to a jail in New Haven, Connecticut. West African slaves had taken over the Cuban ship, traveling from one Cuban port to another, and sail up the United States coastline. The incident prompts the Van Buren administration to argue, first, that the property and expropriation dispute be handled by the executive branch, and second, that the United States would uphold its obligations under the Treaty of 1795, whereby ships stranded abroad remain under the jurisdiction of the originating nation. These principles dictate the return of the Amistad and its occupants to Havana.

The Whigs meet in Pennsylvania to determine their presidential ticket and nominate William Henry Harrison for President and John Tyler for vice president.

By signing the Independent Treasury Act, Van Buren “divorces” the federal Treasury Department from its relationship with all banks. His action stems from the controversy surrounding the Deposit Act of 1836. The Whigs will repeal the Independent Treasury Act in 1841; it will be restored in 1846.

The Amistad hearings begin in a Hartford, Connecticut, courtroom. The court will find the clearance papers of the Amistad to fraudulently identify the slaves as Spanish-speaking Ladinos; however, the Hartford court, a circuit court, and ultimately the Supreme Court concur that treaty obligations have no relevance to the matter of slaves and award compensation for the ship only. The slaves will be returned to Africa in January 1842.

The contest between Democrat Martin Van Buren and Whig William Henry Harrison results in the largest turnout of any election to that point. Harrison soundly defeats Van Buren with 234 electoral votes to the incumbent's 60. Among the reasons for his loss, Van Buren cannot overcome opposition from southern and expansionist groups who support the immediate annexation of Texas.

William Henry Harrison is inaugurated as the ninth President of the United States.