On October 12, 1837, the issuance of $10,000,000 in
Treasury notes is authorized. On May 21, 1838 Congress
rescinds the Specie Circular. On July 28, 1841, a bill
reestablishing a national bank passes in the Senate by a
vote of 26 to 23. On August 6, 1841, the bank bill is
approved in the House of Representatives, 128 to 97. On
August 13, 1841, The Independent Treasury Act of 1840 is
repealed. On August 16, 1841, President Tyler vetoes the
bank bill. On August 19, the U.S. Senate fails to
override Tyler's veto. On August 23, 1841, by a vote of
125 to 94, the House of Representatives passes a second
bank bill providing for the establishment of a national
bank under another name.
On September 3, 1841, The U.S. Senate approves, 27
to 22 the second bank bill. On September 4, 1841,
Congress passes the Distribution Preemption Act, which
allows settlers to purchase ("preempt") up to 160 acres
of public land at $1.25 an acre. In addition, it
provides for the distribution of the revenues from land
sales among the states. However, the act also
stipulates, that distribution will be suspended if the
tariff rate exceeds 20 per cent. (A tariff increase in
1842 voids this section of the act.) On September 9,
1841, the second bill to reestablish a national bank is
vetoed by President Tyler. The next day this veto is
sustained in the Senate. On September 11, 1841, all the
members of the Cabinet except Webster, resign because of
President Tyler's veto of the bank bills. On September
13, the President makes new Cabinet appointments.
Second Annual Message
During the term of John Tyler while in office as
President, April 4, 1841 to March 4, 1845.
Washington, December 6, 1842
To The Senate and House of Representatives of the United
States:
Volume: IV Pages: 204-209 (extract) "Between the
years 1833 and 1838 additions were made to bank capital
and bank issues, in the form of notes designed for
circulation, to an extent enormously great. The question
seemed to be not how the best currency could be
provided, but in what manner the greatest amount of bank
paper could be put in circulation. Thus a vast amount of
what was called money, since for the time being it
answered the purposes of money, was thrown upon the
country, an over-issue which was attended, as a
necessary consequence, by an extravagant increase of the
prices of all articles of property, the spread of a
speculative mania all over the country, and has finally
ended in a general indebtedness on the part of States
and individuals, the prostration of public and private
credit, a depreciation in the market value of real and
personal estate, and has left large districts of country
almost entirely without any circulating medium.
In view of the fact that in 1830 the whole bank-note
circulation within the United States amounted to but
$61,323,898, according to the Treasury statements, and
that an addition had been made thereto of the enormous
sum of $88,000,000 in seven years (the circulation on
the 1st of January, 1837, being stated at $149,185,890),
aided by the great facilities afforded in obtaining
loans from European capitalists, who were seized with
the same speculative mania which prevailed in the United
States, and the large importations of funds from abroad,
the result of stock sales and loans, no one can be
surprised at the apparent but unsubstantial state of
prosperity which everywhere prevailed over the land; and
as little cause of surprise should be felt at the
present prostration of everything and the ruin which has
befallen so many of our fellow-citizens in the sudden
withdrawal from circulation of so large an amount of
bank issues since 1837,exceeding, as is believed, the
amount added to the paper currency for a similar period
antecedent to 1837.
It ceases to be a matter of astonishment that such
extensive shipwreck should have been made of private
fortunes or that difficulties should exist in meeting
their engagements on the part of the debtor States;
apart from which, if there be taken into account the
immense losses sustained in the dishonor of numerous
banks, it is less a matter of surprise that insolvency
should have visited many of our fellow citizens than
that so many should have escaped the blighting
influences of the times.
In the solemn conviction of these truths and with an
ardent desire to meet the pressing necessities of the
country, I felt it to be my duty to cause to be
submitted to you at the commencement of your last
session the plan of an exchequer, the whole power and
duty of maintaining which in purity and vigor was to be
exercised by the representatives of the people and the
States, and therefore virtually by the people
themselves. It was proposed to place it under the
control and direction of a Treasury board to consist of
three commissioners, whose duty it should be to see that
the law of its creation was faithfully executed and that
the great end of supplying a paper medium of exchange at
all times convertible into gold and silver should be
attained.
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