[citation needed][a] In 1829, a group of influential Philadelphians, including William Duane, editor William M. Gouge, and members of the Working Men's Party, presented an influential report claiming that banks "laid the foundation of artificial inequality of wealth, and, thereby, artificial inequality of power.

[citation needed] Two months into the presidency of Martin Van Buren, on May 10, 1837, some state banks in New York, running out of hard currency reserves, suddenly refused to convert paper money into gold or silver.

This financial crisis, the Panic of 1837,[10] was followed by a five-year depression in which banks failed and unemployment reached record highs.

[12] Van Buren announced his proposal in September 1837;[10] but that was too much for state banking interests, and an alliance of conservative Democrats and Whigs prevented it from becoming law until 1840,[13] when the 26th Congress passed the Independent Treasury Act of 1840 (ch.

[14] The Democrats took back their congressional majority and the presidency in the 1844 elections, re-establishing the dominant position the party had lost four years earlier.

President James K. Polk made the revival of the independent treasury and a reduction of the tariff the two pillars of his domestic economic program, and pushed both through Congress.

In periods of prosperity, revenue surpluses accumulated in the Treasury, reducing hard money circulation, tightening credit, and restraining inflation of trade and production.

In his December 7, 1857 State of the Union message, President James Buchanan said: Thanks to the independent treasury, the government has not suspended [specie] payments, as it was compelled to do by the failure of the banks in 1837.

After the Civil War, the independent Treasury continued in modified form, as each successive administration tried to cope with its weaknesses in various ways.

[18] The commission's work culminated in the Federal Reserve Act of 1913, and the demise of the Independent Treasury System.