Martin Van Buren

A

Panic of 1837

In his inaugural address, Van Buren acknowledged his intention of continuing the policies of his predecessor. Indeed, he continued Jackson's Cabinet virtually unchanged. However, soon after Van Buren took office, a severe economic depression swept across the nation. The Panic of 1837 was a worldwide depression, but it was particularly sharp in the United States because the nation had been involved in rapid economic expansion for the past several years. Production jolted to a halt; hundreds of companies went bankrupt; factories closed down; and unemployment rose rapidly. In May 1837, New York banks suspended specie (gold and silver) payments on their bank notes because they did not have enough specie in reserve to cover all the notes that panicked investors were trying to cash in. Almost immediately, other banks across the country did the same. Many state governments also felt the full impact of the panic because, having invested heavily in canal and railroad projects, they were forced to default on their financial obligations.

To meet the distress, Van Buren, on May 15, 1837, called a special session of Congress to convene on September 4. At that time the central government was not expected to assist individual members of society; the best that Van Buren could offer in his message to the special session was a reform of fiscal problems facing the federal government. “Those who look to the action of this government for specific aid to the citizen to relieve embarrassments arising from losses by revulsions in commerce and credit,” he said, “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. ... It was not intended to confer special favors on individuals. ... The less government interferes with private pursuits, the better for the general prosperity.”

B

Independent Treasury System

In Van Buren's mind, the depression was caused by unrestrained issuing of credit by state banks that had received federal funds when President Jackson transferred funds out of the Bank of the United States. His proposed solution was to “divorce” federal funds from state banking. He asked Congress to establish a subtreasury, or independent treasury system, by which the government would build its own vaults or subtreasuries in the leading cities around the country and deposit its revenues in these vaults, where they would be stored until needed. This so-called divorce would eliminate problems created by the use of federal money by state banks.

After a prolonged congressional debate, which went on year after year and which caused many conservative Democrats to desert to the Whigs, the law establishing the Independent Treasury System was passed by Congress on July 4, 1840.

---

---

C

Problems With Great Britain

Van Buren faced other grave problems. In foreign affairs a series of unfortunate incidents occurred that nearly brought war between the United States and Great Britain. The first incident, in 1837, resulted from an uprising in Canada against British rule. Americans were sympathetic toward the rebel cause, and supplied the Canadians with munitions. When the rebels established a base on Navy Island, in the Niagara River just a short distance from the falls, Americans began transporting materials to them from the U.S. side of the river. The U.S. steamer Caroline provided the transportation. On December 29, 1837, a British force crossed the river, seized the Caroline, towed it to the middle of the river, and set it ablaze. During the fracas an American, Amos Durfee, was killed. This outrage generated such hostile feeling in the United States that a number of raids into Canada were carried out as reprisals. A British steamer was seized and burned. The United States demanded reparations for the Caroline incident, but this demand was refused. Meanwhile, Van Buren warned Americans against further participation in the border conflicts and promised a strict enforcement of the law against those who fomented trouble. He sent Major General Winfield Scott to the frontier with instructions to see to it that Americans refrained from hostile actions against the British.

A second incident that heightened tensions occurred a few years later when a Canadian, Alexander McLeod, boasted in a New York City tavern that he had killed Durfee during the attack on the Caroline. Immediately, McLeod was arrested and placed on trial for murder. Britain demanded his release, but the United States was powerless to intervene because it had no jurisdiction over New York state law.

A third source of trouble with Great Britain was a boundary dispute between Maine and New Brunswick in the valley of the Aroostook River. In 1839 an undeclared war broke out among the people in the area about ownership of the land. The governor of Maine called out the militia and took forcible possession of the disputed territory. Congress promptly passed a bill authorizing the president to summon 50,000 volunteers and appropriating $10 million for defense. Again, Van Buren sent General Scott to restore order and maintain peace. The president's response to the disturbance was motivated by the determination to obtain “peace with honor.” In time the governor of Maine was persuaded to withdraw his troops, and eventually both sides agreed to a truce in the so-called Aroostook War.

A final settlement of these foreign problems was not worked out until after Van Buren left office. However, there is no question that the president showed courage and rare wisdom in taking the necessary action to avoid war with Great Britain. Later, in the administration of President John Tyler, the Webster-Ashburton Treaty was concluded, which amicably settled the northeastern boundary dispute and the Caroline affair. In the meantime a New York jury had acquitted McLeod.

D

Native American Policy

Van Buren's administration was also troubled by the continuing war with the Seminole in Florida that had begun during Jackson's term in office. The war resulted from the efforts of the government to move all Native American peoples west of the Mississippi River. The Seminole resisted the seizure of their lands and rallied behind their war leader, a young chief named Osceola. Eventually Osceola was seized under a flag of truce and imprisoned at Fort Moultrie, South Carolina, where he died not long afterward. Although it cost many millions of dollars to fight the Seminole, they were finally subdued and most of them driven westward.

E

Labor Reform

One of Van Buren's most enlightened acts as president was his executive order stating that no person was to labor more than ten hours a day on federal public works. The order, issued near the end of his administration, was a natural result of his expressed concern for laboring people.

	More from Encarta
	•  7 tips for funding an online degree •  How to succeed in the fashion industry without being a top designer •  Presidential Myths Quiz •  Coffee break: Recharge your brain