culties. They began by marching into a cul de sac, where their differences with the president must be fought out, unless either he or they should surrender. Of the measures included in the programme announced by Clay in his resolutions introduced in the Senate June 7, 1841, the first provided for the abolition of the independent treasury; the second for the incorporation of a bank to take the place of it; the third for the raising of adequate revenue for the government by the imposition of duties; and the fourth for the "prospective" distribution of the proceeds of the public lands.1 There was a seeming general agreement between this programme and the views expressed by Tyler in his message of June 1; but the president had carefully avoided specific recommendations; and the statement of his opinions was so qualified as to forecast clearly enough his opposition to the Whig policy in the form which it was given by the majority in Congress. The ensuing quarrel between him and that majority centred mainly on the question of a national bank; it finally extended, however, also to that of distribution as affecting the level of import duties. The order in which the different measures of the programme were attempted, and the passage of some of them with the evident purpose of creating a necessity for the others,' was a precipitation of issues 1 See p. 58, above. 'Cf. remarks of Calhoun on the distribution bill, Cong. Globe, 27 Cong., 1 Sess., 314. both with the president and with the Democrats which a more far-sighted leader than Clay would have been careful to avoid. It placed the fortunes of the Whigs, and less directly of the nation itself, in the hands of Tyler, and challenged him to assert himself to their injury if he dared. The act of 1840, establishing the independent treasury, provided not only that the government's money should be received and kept in its own vaults at New York, Philadelphia, Boston, Charleston, St. Louis, and New Orleans, but also that after June 30, 1843, all receipts and disbursements should be in gold and silver. Thus the plan of having the government handle its own cash was combined with a step intended to improve the currency. This was the most fiercely contested feature of the law, and aroused the unceasing opposition of the state banks and their friends." 1 The plan remained in operation for a little over one year. Whether because of its own merits, or simply of favorable conditions, it worked well; and the prophecies so freely made by its opposers that it would bring disaster remained unfulfilled. But the Whigs, who had meanwhile shouted themselves to victory with the cry "Down with Van Buren 3 1U. S. Statutes at Large, V., 385-392; Hart, Slavery and Abolition (Am. Nation, XVI.), chap. xx. 2 Kinley, Independent Treasury, 25-27; Dewey, Financial Hist. of the U. S., 236; Knox, Hist. of Banking in U. S., 86. Johnston, in Lalor, Cyclopædia, II., 495; Kinley, Independent Treasury, 31. 3 ism!", could not for a moment tolerate this Van Buren substitute for a national bank. Tyler asserted in his first message to the twenty-seventh Congress that the measure had received clear popular condemnation-by no means a groundless statement;1 and Clay, immediately on the opening of the special session, which was called by Harrison and found Tyler in his place, introduced a bill for repeal, which became a law August 13, 1841, thus restoring the fiscal chaos which Van Buren had relieved only by the sacrifice of his own political prospects. The failure of the Whigs to charter another national bank left them with no further remedy, and the government remained without a legalized deposit system for nearly five years." With the coming of a Democratic administration, the subject was naturally taken up again. President Polk, in his first annual message, recommended to Congress the establishment of a "constitutional" treasury, which he claimed should be "a secure depository for the public money, without any power to make loans or discounts or to issue any paper whatever as a currency or circulation," and "independent of all banking corporations. In pursuance of this recommendation, a law re-establishing the independent treasury was passed by Congress, and was approved by the president, August 6, 1846. 1 Richardson, Messages and Papers, IV., 45. Richardson, Messages and Papers, IV., 406-408. VOL. XVII.-12 It reproduced the most important features of the law of July 4, 1840, in that it provided for the same centres of deposit and the same general system of handling the money; but treasury notes were to be received and disbursed, as well as gold and silver. The government funds were to be kept safely by the receivers, and not to be lent or deposited in banks.1 2 The system was again set in operation, and for many years it proved very successful. The trial showed that the law had certain defects, such as the want of satisfactory provision for the care of the funds, and there were no appropriations made to cover the expense of transfers of money or the salaries of certain necessary officials. The opposition of the banks had also to be overcome. Gradually, however, the system was improved and strengthened, and it proved adequate in the emergencies of the war with Mexico and the financial crisis of 1857. The greater stress of the Civil War forced the government into a renewed connection with the banks and brought about the establishment of the present national banking system. But it should be noted that the public fiscal system still remains substantially under government control. 5 1 U. S. Statutes at Large, IX., 59–66. ? See statement in report of secretary of treasury, Niles' Register, LXXI., 253. Kinley, Independent Treasury, 46. 3 See report of secretary of treasury, Niles' Register, LXXIII., 250; Report on the Finances, 1854, pp. 14-17. 'Dewey, Financial Hist. of U. S., 254. Just before the independent treasury was finally established came the settlement of the closely related question of the tariff. The power to levy imposts had been jealously withheld by the states from Congress during the period of the Confederation; and when it was granted by the Constitution it was used at first mainly to obtain revenue. The growth, however, of manufacturing industries during the War of 1812 and the years that followed led to the adoption of the protective policy. In 1828 the passage of the "Tariff of Abominations," with its extreme abuses of the principle of protection, caused South Carolina to threaten the nullification of that tariff within her own borders; but the trouble was finally adjusted in 1833 by a compromise according to which the excess of all duties over twenty per cent. was to be removed by successive reductions as follows: four of one-tenth each dated January 1, 1834, 1836, 1838, and 1840, respectively; one of three-tenths on January 1, 1842, and another of three-tenths on July 1, 1842.1 The compromise of 1833 was still in effect when the Whigs came into power in 1841. In his message at the opening of the special session of the twentyseventh Congress, Tyler said that the compromise act "should not be altered except under urgent 1 For details of the protective movement, see Taussig, Tariff Hist. of U. S., 68-110; Turner, New West, chaps. ix., xiv., xix.; MacDonald, Jacksonian Democracy, chaps. v., ix. (Am. Nation, XIV., XV.). |