In 1837, President Martin Van Buren faced a dilemma over the appropriate federal response to the recent panic of 1837 that seemed to undermine the politics and power of Andrew Jackson’s “democracy.” Now Van Buren must decide how best to use citizen feedback to stabilize the financial system and get the American economy back on the growth track. Van Buren’s dilemma emerges amid a dramatic regime change in American politics. The rise of Whig politicians in response to the populist policies of Andrew Jackson marked 1837 as a turning point in history. It is useful to consider how the panic of 1837 contributed to this turning point and how the subsequent citizen response to panic evolved. Case A tells of President Andrew Jackson’s policy and his “war” against the Second Bank of the United States, a quasi-central bank. It also describes the “market revolution” taking place in the American economy and the resulting political factions. Finally, it summarizes the causes and history of the panic of 1837. Case B presents a bill for an independent Treasury Department and President Van Buren’s message to open a special session of the United States Congress and approve the proposal of the United States. Independent Treasury Department. Case C describes the fact that the proposal was not made in 1837, 1838, and 1839; finally, the proposal was made in 1840. The case also describes other bourgeois responses: a new bankruptcy law and state “free banking” laws. Finally, the case describes the economic consequences: another panic in 1839 and a long depression that followed.
Robert F. Bruner
Robert F. Bruner
Darden School of Business (UV7346-PDF-ENG)
September 20, 2017
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