Dillon Monroe Period 4 APUSH December 6, 2010 DBQ final During the late 1830s the economy began

doing poorly due to large debts incurred by states and an unfavorable balance of trade as imports exceeded exports, which caused a loss of gold and silver. This required payment for government land to be in gold and silver. The next president, Martin Van Buren, had an idea he felt was perfect to fix the economic situation, the independent treasury system; which was a system for retaining government funds in the US Treasury, doing so independently from the national banking systems. This independent treasury system helped economically, socially, and politically to counteract the negative effects of the panic of 1837. Economically the independent treasury system helped the panic of 1837 by restricting how much we spent as a nation thus decreasing our debts. This was good because our nation was severely in debt. Because we were in debt and still spending we were driving ourselves into a deep hole. Economically the things that the treasury system did poorly were during good times a lot of money would accumulate in the treasury and that would reduce hard money circulation, thus tightening credit. Also during time of depression when specie became rare and the government would insist on being paid in specie it would aggravate the situation by regulating the amount of specie available for private finances. Socially the independent treasury system affected society by divorcing the government of the banks. This helped because now the people were free to finance how they wanted and not have to worry about the possibility of loss of money due to the governments loss of money. This was beneficial because the people were in a depressed state and needed their hopes up and this was given to them in the feeling of having secure banking. Politically this independent treasury system helped with the panic of 1837 by giving the politicians something to argue about. Sometimes I think thats all they need, the Whigs opposed the independent treasury system while the president, Martin Van Buren, then Polk, were extremely for it. All of this arguing eventually sparked an idea to create the system that is still used today. The Federal Reserve all it takes is one catalyst to figure out how to run something properly and thats what the independent treasury system did, pave the way for the Federal Reserve. The Independent Treasury System Influenced the outcome of the panic of 1837 greatly economically, socially, and politically. Economically through restricting our spending amount, socially through raising morale of doing our own finances. And politically through paving the way for the Federal Reserve. Without this program, and Martin Van Buren we would be stuck in the dark ages.