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PRESIDENT DESCRIBESTO SON
HIS FINANCIAL SYSTEM REJECTED BY CONGRESS
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TYLER, JOHN. Autograph Letter Signed, “J. Tyler,” to his son (“My Son”),
describing the main points of the financial system he proposed to Congress in December
of 1841. With half-page postscript, describing a recent visit to the sickbed of his friend
[LittletonWaller] Tazewell and sadly anticipating his death. 4 pages, 4to, written on a single
folded sheet; cockling along horizontal fold affecting text (but still legible). (TFC)
“Sherwood Forest” [Charles City], circa 1858
[6,000/9,000]
“
My exchequer plan will be found
in limine
in a report made by Mr. [Walter] Forward, then Secretary
of the Treasury, to the Senate in theWinter of 1841-2. My message of December 1841 presents its out-
lines, and that of Dec’r 1842 repeats the recommendation for its adoption, and briefly answers the most
prominent objections which had been urged to it. The report which accompanies the plan is worthy of
deliberate study.That paper was
written
byWebster and
adopted
by Forward.The plan itself was my
own, and was drawn up at my house inWilliamsburg, whither I had gone for the purpose of close retire-
ment while eliminating the work. It was presented to the Cabinet and adopted as a Cabinet measure,
only one suggestion of amendment being urged upon me, and that I adopted upon the condition that I
should present the plan to Congress in the alternative to be adopted by that body either with or without
the amendment, as it might seem proper. The amendment simply provided the means of paying the
expenses by authorizing a limited dealing in the exchanges. Agencies were proposed to be established in
all the States, but if a State
prohibited
it the agency in such State was forbidden to deal in exchange.
This proviso was incorporated by myself under the decision of the Supreme Court in the case of the City
of Augusta vs. Earle, and other similar cases. I cannot lay any hand on the original draught as prepared
by myself, and presume I handed it over to Mr. Forward.The scheme, doubtless, may be modified and
improved—Mr. Cushing’s suggestions in the House, and those of Mr.Talmadge in the Senate, in regard
to it, are well worthy to be looked to. My present impression is, that taking the Sub Treasury as its basis,
and authorizing the issue of certificates of deposits to individuals in the form of bank notes of denomina-
tions of $5 and up to one hundred, with larger sums to be put upon the footing of bills of exchange, for
the issuing of which the actual premium of transporting specie from one place to another should be
charged, the country would have a paper currency which would be the true representative of the precious
metals, and would circulate all over the commercial world. In order to get it under way the government
might issue certificates to its creditors, taking care to place actually in deposit gold and silver to the amount
of each certificate.The specie deposited should be regarded as sacred for the purpose of redeeming the cer-
tificates whenever presented.Those certificates would bear a premium in the markets of the world, and
furnish a currency of more value than gold or silver, because more easily transported about one.The only
danger would be that the bankers would snatch them up for hoarding in place of gold and silver.The
agencies might be the sub-treasuries; but of course the government funds should be kept entirely separated
and distinct from the funds of private depositors, except as suggested above.The
Madisonian
of that day
would repay the reading of Mr. Harris, as many of the articles proceeded from the great minds of the
Cabinet in support of the project. He would also revive his earlier recollections by referring to Mr.
Jefferson’s letters to JohnW. Eppes [June 24, 1813], in the volumes of his correspondence, (which volume
I do not at the moment remember). The letter was written, I think, in the year 1816, and relates to
finance. By consulting the index he would readily find the letter. It will repay his search.”
The panic of 1837 was the most widespread and long-lasting economic disruptions to have occurred in
the U.S. up to that time. It was caused by several factors, chief among them were the fiscal policies of
Andrew Jackson, including the crippling of the Second Bank of the U.S.TheWhig Congress believed a
new national bank was needed, and while President Tyler approved some Whig bills, he vetoed a great
many, including those designed to establish the national bank they desired, proposing instead a financial
system of his own devising that came to be known as the “Exchequer Plan.”The plan was not taken up
in legislation; on the contrary, moreWhig bank bills were passed by Congress, which Tyler again vetoed.
Tyler’s vetoes prompted theWhigs to expel him from the Party, incited most of his own cabinet to resign,
and resulted in the first-ever impeachment resolution against a U.S. president. An independent treasury
system was established in 1846 under the administration of Tyler’s Democratic successor, James K. Polk,
which remained in place until the Federal Reserve System was established in 1913.
This letter is reproduced in the January 12, 1858 issue of
The NewYorkTimes.