Chapter 11

THE ILL-FATED EXCHEQUER PLAN

 

 

“The present is the first time under our government that the phenomenon . . . [of a] ‘President Without a Party’ has been witnessed. Nor is it easy to imagine any possible combination of circumstances which would be likely ever again to reproduce it—at least in a manner as remarkable as exists in the case of Mr. Tyler.”1

The Democratic Review accurately highlighted the unique character of national politics after the Whigs banished John Tyler from their ranks. The journal did not offer its opinion on whether the president or Henry Clay was more responsible for the conflict that had marred the special session, but Washington politicians and ordinary Americans who followed the partisan battles in the capital certainly had their own ideas as to who was to blame.

In assessing the feud between Tyler and Clay, contemporaries as well as later historians tended to blame one man or the other for the political turmoil that left the president without a party and the Whigs deprived of the mandate they believed they had won in 1840. Those sympathetic to Clay portrayed Tyler as a stubborn strict constructionist who misled the congressional Whigs and who could not bear to have the senator’s leadership of the party go unchallenged. The president, one Whig newspaper groused, was “a man destitute of intellect and integrity, whose name is the synonym of nihil—if so miserable a thing can be called a man!” Tyler supporters viewed Clay as egotistical and unreasonable, a man driven by ambition to put his indelible stamp on the nation’s economic recovery and place himself in the best position to win the Whig nomination for president in 1844, no matter the cost. It had been Clay who had “blast[ed] all the fruits of the Whig victory of 1840,” a disgruntled observer wrote, and he “would have had the same difficulty with General Harrison had he lived.” Both perspectives contain some truth, of course, but they do not tell the whole story. History can seldom be explained with simple either-or propositions.2

An explanation of Tyler’s behavior during the summer of 1841 must first take into account the circumstances of his elevation to the presidency. The Virginian came to the office under duress. President Harrison’s death had thrust him into an unprecedented and extremely difficult situation, one that he negotiated with admirable skill and decisiveness in the first days of his administration. Tyler arrived in Washington on April 6 determined to establish his legitimacy as chief executive and set a tone conducive to effective government. He quickly got to work and familiarized himself with the many details of the office. The start of the special session—which he acquiesced to but did not fully want—placed Tyler on a collision course with Clay, and he quickly became mired in self-doubt and exhibited a startling inability to chart a coherent course of action. His decisiveness evaporated quickly. It was as if he had internalized the “accidental” nature of his presidency and lost the self-confidence that had animated him at the first cabinet meeting. Making matters worse, Tyler gave confusing signals about his acceptance of a national bank to his party’s leaders—including Clay—as he sought to stake out a position of leadership for himself from the White House. At the same time, he paid lip service to the Whig doctrine of legislative supremacy, not wanting to be tarred with the charge of executive usurpation. Contradictions defined his behavior.

Further complicating the situation for Tyler was the pressure placed on him by the Virginia “cabal”—Henry Wise, Beverley Tucker, and Abel Upshur. These men saw in a Tyler presidency the opportunity to push the states’ rights policies they had dreamed of for years and bombarded the president with correspondence and personal visits touting their position. Far from resenting the intrusion, however, Tyler actively encouraged their counsel, even if he largely acted according to his own conscience. Oddly, he found himself trying to placate his friends with evasive and half-hearted promises while keeping them enough at arm’s length so that they would not wreck the plans he had begun to lay for succeeding himself in 1844. He truly was caught in the middle. The Clay Whigs believed the Virginians unduly influenced Tyler and directed his actions. The cabal, on the other hand, argued among themselves that Tyler hewed too closely to Whig orthodoxy and questioned (with good reason) his sincerity in advancing their goals. The result for the new president was that he pleased neither group and placed himself in an untenable position.

The events of the special session shattered Tyler’s self-confidence. Indeed, in the buildup to the second veto, he appeared emotionally unbalanced, groping for something or someone to ease his way and take the pressure off of him. Tyler also revealed himself to be thin skinned, a dangerous attribute for any politician, especially the president of the United States. He had fallen prey to self-righteous bouts of anger and dismay—and at least one outburst of temper—as he followed very closely what a hostile press and adversarial Congress had to say about him. He seemed to believe that his longstanding political principles should insulate him from partisan criticism, or at least explain why he acted as he did. He also allowed his hypersensitivity to influence his political behavior. Daniel Webster was surely correct in his view that the Botts coffeehouse letter played at least some role in the president’s decision to veto the second bank bill, a decision that, while couched in terms of principle, displayed his insecurity as well as an unbecoming vindictiveness.

In sum, Tyler deserves a large share, though by no means all, of the blame for the situation in which he and Whig leaders found themselves in September 1841. Clay’s ambition certainly played a role in what happened, but there is no specific evidence documenting Tyler’s assertion that the Kentuckian used the special session as a “favorable opportunity to press [him] to a veto . . . and by exciting the passions of the Whigs to frenzy, to force them into an early committal for himself [Clay] for the succession, and thereby to exclude all other competitors.” This was certainly the view of Congressman Wise, who apparently argued the point so much that the president started to believe it. In mentioning “all other competitors,” though, Tyler perhaps inadvertently revealed that he considered himself a serious challenger for the presidential nomination in 1844, which would mean that his ambition, as well as Clay’s, played a role in the disaster of the special session. Whatever the case, neither Tyler nor Clay emerged from the debacle with his reputation entirely intact.3

The Whig Party itself must also bear significant blame for the rupture between the president and the senate leader. “Flushed with success,” the Democratic Review later intoned, the “party anticipated no obstacle to the complete triumph of those favorite schemes” they hoped to enact during the special session. The Whigs were shocked and angry that Tyler had dared to oppose them. Yet the president talked himself hoarse during the summer of 1841, explaining to all who would listen that he had followed the same principles of states’ rights and strict construction for his entire public career and that he had always been opposed to the type of bank Clay favored. He saw no need to shed his principles just because he had become president, even though the majority of his party believed he should have adjusted his stance to allow their entire agenda to become law. In fact, as one historian has argued, had Tyler strayed from his longstanding ideals, he would have been “tagged as a hypocrite, a trimmer who tilted with the political winds.” He would have risked his honor, a most distasteful prospect for a Virginian from the Old Republican school.4

By placing Tyler on their 1840 ticket, the Whigs had made a horrendous decision at the Harrisburg convention. Serious concern about Harrison’s advanced age had been disregarded. No Whig asked what a Tyler presidency might look like. No party chieftain was concerned enough with Tyler’s tenuous connection to Whiggery to question whether he should even have been their candidate for vice president. To be fair, the contingency of a president’s death had no precedent before April 1841. Subsequent national party conventions would at least keep the possibility in mind that the candidate at the top of the ticket might die in office. In fact, today’s parties select and nominate their vice-presidential candidates (usually) with care and often think long and hard about the person who will be “a heartbeat away” from the presidency. Had the Whigs considered this, perhaps Willie Mangum or some other suitable southerner would have been placed on the ticket with Harrison in 1840, and the party’s agenda would have sailed through at the special session. The Whigs vowed that they would not make this mistake again.

The disastrous decision at Harrisburg, and the seemingly inevitable vetoes and finger pointing between Tyler’s allies and Clay’s supporters, obscured the very real danger the United States faced in 1841. No one took responsibility for the damage the fracture in the Whig ranks inflicted on the country. The American people suffered most from the break between Tyler and Clay, as promises to improve the economy wilted under the stress of politics. The depression continued. A bank would surely have helped alleviate the nation’s economic problems. Clay was correct that such an institution had a demonstrably beneficial effect on credit and capital; for all of the greed and corruption associated in the public mind with the Second Bank of the United States, during its lifetime, it had been integral to America’s growing market economy. Clay’s bank bills during the special session remedied some of the previous institution’s most glaring defects. But the president’s two vetoes meant that the senator would never get the type of bank he wanted, at least not while Tyler sat in the White House.

Tyler, of course, believed he had acted in the best interests of the country. And he was still the president even if he had no party. In the wake of the special session, he turned his attention to the promise he had made to devise a suitable fiscal agent that he and Congress could agree on. Upshur and Tyler had discussed the matter, without coming to any agreement over what the administration should offer when the time came. The navy secretary had resurrected Tucker’s proposal from April and urged the president to finally get behind it. Evidently, Tyler still could not commit to the plan but could not bring himself to eliminate it from consideration either. This continued waffling, as always, exasperated Upshur, who was not sure at first if he even wanted to be a part of the administration. “I have been at cross-purposes with myself & every body else, ever since I received this Federal appointment,” he admitted. He, of course, got over his misgivings and accepted the cabinet position and soon began tackling his duties at the Navy Department with enthusiasm and a singular competence. Modernization would emerge as the theme of his tenure, and a near-total transformation of the naval service resulted, bringing great credit to the Tyler administration and to Upshur personally.5

Tyler intended to return to Virginia in the fall of 1841 for a brief vacation before the regular session of Congress began in December, but he promised Upshur he would give a lot of thought to the fiscal agency and put some ideas on paper. He needed the break. The adjournment of the special session did little to relieve what Tyler called the “most oppressive mass of business” he faced as the head of the government. Patronage matters still took up much of his time, and he got tired of seeing the hordes of grimy office seekers who made their way to the White House every day. One visitor was struck by the “persevering and energetic” way these men spat brown tobacco juice and “bestow[ed] their favors so abundantly upon the carpet” of the mansion as they awaited the opportunity to speak with the president for a moment or two. Most of these supplicants for office went away emptyhanded. Tyler usually filled jobs based on the recommendations of men whose judgment he trusted. In doing so, he also sought to maintain his ties to powerful members of the Whig Party. As he told New York governor Seward, who at one point had written on behalf of a loyal party man, a well-timed letter from someone of his stature had “much influence” on him as he made decisions to fill patronage spots throughout the country. Still, the process vexed him, as he admitted to Tucker. “That I should commit many blunders in my appointments,” he sighed, “is in no way to be wondered at, with a full understanding of the arts and subtleties to which the eager pack continually resort.” Tyler had to sift through a seemingly endless supply of correspondence in an effort to find competent men for government positions. The patronage game was a necessary evil of party politics, particularly in an era in which the spoils system held such sway. Before the Pendleton Civil Service Act of 1883 curtailed the practice somewhat, providing jobs for supporters allowed the president to lubricate the gears of government. Tyler hated it, however. Nor did he believe it was necessarily beneficial to the welfare of the American people. Still, he seemed to recognize that patronage might be a weapon he could use to great effect as a president without a party. Indeed, skillfully utilized, the patronage might even help Tyler build a new party if it came to that.6

Before he departed the capital, Tyler wrote two letters to Webster, who had left Washington for his home in Massachusetts in late September. He wanted to make certain that the secretary of state knew he would not be marginalized in the new cabinet and that he had made the prudent decision to stay where he was. “You were right to remain in the cabinet,” the president assured him. Tyler also wanted to cement Webster’s status as a confidant and political ally and prepare him for the battles ahead. “I pray you to accept the sincere assurances of my confidence and warm regard,” he wrote. Though he did not say so directly, the president believed Webster to be the most important member of the cabinet.7

Because of his stature and influence, the New Englander’s support of the men Tyler had selected for his own cabinet was essential to the administration’s sound footing. By writing to Webster, the president sought to lay the groundwork for a productive working relationship between the secretary of state and his new colleagues. “I congratulate you in an especial manner upon having such co-workers,” he wrote. “Each man will go steadily to work for the country, and its interests will alone be looked to.” Tyler also made clear that he expected a harmonious administration. He wanted each member of the cabinet “to look upon every other in the light of a friend and brother. By encouraging such a spirit,” he said, “I shall best consult my own fame and advance the public good.”8

Tyler’s attitude and frame of mind in early October were a far cry from what they had been in the waning days of the special session. In fact, the resignations of Harrison’s cabinet members and the reestablishment of his administration—and it was his now, to be sure—energized him. He also seemed to recover at least some of the forcefulness and steady leadership he had shown in the early days of his presidency. He was now free to pursue his goals unencumbered by men who could never be loyal to him or who did not share his objectives. Tyler also took heart from favorable reports he had received from various quarters after Congress adjourned. “My information from all parts of the country is encouraging,” he informed Webster, “and although we are to have a furious fire during the coming winter, yet we shall, I doubt not, speedily recover from its effects.” Typical of the positive news Tyler had read or heard from other sources was a statement from the Massachusetts Whig State Central Committee, the men to whom Webster himself answered. “We still have a Whig President,” the committee declared, “who intends to surround himself with Whig advisers, and to conduct his administration upon Whig principles; and until his acts shall establish the contrary, we hold him to be entitled to the support of the Whig people.” Tyler agreed and believed that the course of his administration was “too plainly before us to be mistaken. We must look to the whole country and to the whole people.” Indeed, he aimed to rise above partisanship.9

Tyler was aware, though, that other members of the party did not concur with the Massachusetts Whigs. Clay supporters schemed for ways to position their man for 1844 and undermine the administration. A New York state convention meeting in Syracuse on October 7, 1841, gave the Kentuckian credit for what had been accomplished during the special session and expressed “deep disappointment and regret” that President Tyler had “not been able to cooperate with the other co-ordinate branches of the Government” in the effort to create a new national bank. The convention also declared its support of the cabinet members who had resigned after the second bank veto.

What had been said publicly, however, was mild compared to what had apparently been said behind closed doors. Tyler received a private letter that detailed some of the more sordid dealings in Syracuse. He found out that Millard Fillmore, a New Yorker and chairman of the House Ways and Means Committee, had pressured Frank Granger to resign from the cabinet. Whether Fillmore’s machinations had actually forced Granger to leave was not known, but Tyler had reason to believe he did not leave solely of his own accord. Worse, in a secret session a small cabal of Whigs—again led by Fillmore—had sought a way to force Tyler from office and replace him with Clay. “What a low and contemptible farce,” the president sneered by letter to Webster. Clearly, the “furious fire” Tyler expected during the coming winter in Washington had already been lit.10

To counteract the intrigue being used against him, Tyler relied on surrogates to frame the events of the special session in a favorable way and to present his actions in a positive light. He needed to build momentum before the regular session of Congress began in December. No surrogate was more enthusiastic than Henry Wise. The congressman traveled throughout Virginia’s eastern shore in the fall of 1841 trumpeting the virtues of the president. Speaking late one afternoon in front of a tavern in Accomac County, Wise attracted a sizeable crowd of well-oiled spectators and delivered a blistering denunciation of the Clay Whigs. “He justified Mr. Tyler in the exercise of the veto power, and gave the Whigs a most tremendous run,” declared one man who was there. Mocking the efforts of Ewing and Clay to devise a new national bank, Wise “condemned them all decidedly and unequivocally.” Tyler appreciated his friend’s efforts and expressed his confidence that the congressman’s “presence among them [his constituents] will unite them as one man.”11

But this public-relations campaign would only get Tyler so far. The president believed he needed substantive policy proposals if he was to mobilize support for his administration in Washington and throughout the country. The nation’s continuing fiscal difficulties, in particular, demanded attention. As he had indicated to Uphsur, Tyler informed Webster that he planned to devote part of his time in Williamsburg “to meditate in peace over a scheme of finance.” He also planned to discuss the matter with Professor Tucker. Tyler seemed determined to come up with a workable solution while he was in Virginia.

The president also took the opportunity at this time to refer to a subject he and Webster had discussed briefly after the special session had ended. “I gave you a hint as to the probability of acquiring Texas by treaty,” he reminded the secretary of state. “I verily believe it could be done.” The time seemed ripe for making the independent Republic of Texas a part of the United States.

Exactly when Tyler began to think of Texas within the context of his administration’s foreign policy is not clear. Although Wise had floated the idea of annexation in a meeting between the two men in May 1841, Tyler had apparently not made his interest in the matter known to anyone before he broached the idea with Webster. What seems likely is that, having become a president without a party, Tyler now sought an issue—a big issue—that would allow him to define his presidency and gather support for a second term. “Could the North be reconciled to it, could anything throw so bright a luster around us?” he asked Webster. Luster was indeed what Tyler craved, what in his view he needed, if he wanted election in his own right to cement his place in history. He recognized the pitfalls. “Slavery,—I know that is the objection,” he conceded. The objection “would be well founded,” Tyler admitted, “if it [slavery] did not already exist among us.” But he believed that “a rigid enforcement of the laws against the [international] slave-trade would in time make as many free States south as the acquisition of Texas would add of Slave states, and then the future (distant it might be) would present wonderful results.” With these words to Webster, the president indicated that he was open to the idea of Texas annexation and wanted to sound out his secretary of state to see if he would be willing to help him accomplish it.12

 

 

After relaxing for a bit in Williamsburg, Tyler began to brainstorm ideas about the fiscal agent he wished to present to Congress. As he had so many times throughout his political career, he turned to Littleton Tazewell for advice. “I am committed to the country to produce a financial plan to the next session of Congress,” he wrote his friend. “Two have occurred to me, but upon neither have I matured my opinions.” Tyler wanted Tazewell to weigh in on the proposal as it took shape to help the process along. “The naked Sub-Treasury [Van Buren’s Independent Treasury] has been condemned but may not a Treasury arrangement be formed which will not only answer the purposes of the government, but also furnish a currency for the country?” Tyler hoped so and used that simple premise to outline a bill.13

The proposal the president came up with called for a bank in either Washington or New York City capitalized at $5 million. This institution would be the “exclusive depository of the public funds” and would be empowered to “select its own agents [that is, branches] without the grant of the government of one particle more power than its local charter confers.” Government stock would provide security for bank notes, which would serve as legal tender everywhere and provide a uniform currency. The government would only allow a limited supply of paper notes to circulate—perhaps $15 million—in the form of what he called “exchequer bills.” The total amount in circulation would be tied to the par value of specie, that is, gold and silver. The notes, or exchequer bills, “would not only rest upon specie collected in advance of their issue, and for which they would be the substitute, but the faith of the government would be pledged for their redemption.” For greater security and to prevent price fluctuation, Tyler proposed that the notes be made redeemable at the place of issue. So, for example, if the notes were issued in New York City, they would only be redeemable in New York City.

As for the “machinery” of the bank, Tyler indicated a willingness to depart from states’ rights principles. He envisioned a board of control in Washington, with up to ten or twelve agencies established throughout the country. The agencies would act in behalf of the US Treasury and would be empowered to receive deposits of gold and silver and “issue certificates, which of themselves would enter into circulation at a decided premium.” Furthermore, the amount these agencies could hold in deposits at any one time would be restricted in order to prevent the widespread removal of funds from state banks. Tyler again made clear that he wanted to protect state banks and envisioned them operating “in union with the agencies.” Finally, there was the component that had fueled so much animosity during the special session: discounts and bills of exchange. The powers of the agencies “might even still further be enlarged,” Tyler said, by authorizing them “unless prohibited by the State where located to purchase bills of exchange drawn in one State and payable in another.”

Such was the plan Tyler developed. All of it seemed feasible, at least to him. Yet one particular obstacle troubled him. “How is the board of control and their subordinates to be placed beyond the reach of executive power?” he asked Tazewell. Mindful of Clay’s criticism that, because the country lacked a national bank, the president controlled the “sword” and the “purse”— the military as well as the Treasury—Tyler sought a way out. After all, he had argued in his inaugural address that a “complete separation should take place between the sword and the purse.” But was this even possible? He speculated that perhaps the commissioners could be appointed for a specific term instead of serving at the pleasure of the president. Clearly, there were still more details to be worked out.14

While Tyler eagerly sought Tazewell’s counsel on the matter, by this time, he had decided that he wanted nothing more to do with Tucker’s banking scheme. The president spoke with Tucker in Williamsburg and gave him the bad news. When his friend asked for the reason why he would not introduce his measure, the president told him that political considerations made it impossible. “I must have a party,” Tyler declared. “Make one,” Tucker replied. “I have not time,” the president insisted, “I must have one ready made.” Tyler then explained the plan he had been working on. Tucker shook his head. Disgusted, he told Tyler that he would “oppose it with tongue and pen, and, in case of need, with sharper weapons.” The conversation ended abruptly on that note, and the two men parted, their relationship now strained. In December 1844 Tucker confided in disgust to Clay of all people that he eventually saw that Tyler “would continue to disable himself to effect any good purpose, by making it manifest to all, that in whatever he did, or refused to do, he acted solely with a view to the gratification of his own sordid ambition.”15

Tyler’s insistence that he needed a “ready made” party meant that he would not attempt to build the states’ rights party the Virginia cabal wanted—at least not yet. He intended to try to ally himself with one of the two established parties because he evidently believed this was the path to winning election in his own right in 1844. This is not to say that Tyler was intent on abandoning his long-held states’ rights principles. As he made clear to Tucker, however, he realized that the reactionary approach to national politics favored by the Virginia “abstractionists” could not succeed. He needed a middle ground and set about refining the plan he had outlined to Tazewell.

The president did so shortly before returning to Washington. On December 7 Tyler sent his first annual message to Congress as required by the Constitution (Congress had convened the day before). The message arrived at the Capitol by courier, possibly John Tyler Jr.; the president did not read it aloud. In it Tyler addressed the national debt and the debts many states owed to foreign—chiefly British—creditors, which had risen to the staggering sum of $200 million. He urged Congress to consider extending the time for the sale of $12 million in bonds that would compose the loan authorized during the special session, since only $5.4 million had been subscribed so far. He even mentioned the work of a commission that had been organized to determine the boundary between Texas and the United States and indicated that his administration would be watching developments there. “The United States can not but take a deep interest in whatever relates to this young but growing Republic,” he declared.16

The centerpiece of the message, however, was a general introduction of Tyler’s proposal for a fiscal agent, which he soon called the Exchequer. The name is rather curious, for it calls to mind the British treasury—the vilified Charles Townshend had been chancellor of the exchequer before the American Revolution—and Tyler had no love lost for Britain. Largely conforming to the plan he had sketched out for Tazewell in November, and satisfying his constitutional scruples, the Exchequer would be headquartered in Washington and placed under the control of a board composed of five individuals—the treasury secretary, the treasurer of the United States, and three other members the president appointed. Agencies would be established at “prominent commercial points or wherever else Congress shall direct, for the safe-keeping and disbursement of the public moneys.” Individual deposits of gold and silver would be accepted by these agencies, and Treasury notes would be issued as currency in exchange for these deposits, with the total value of notes allowed in circulation at one time set at $15 million. This would, Tyler argued, furnish “a sound paper medium of exchange.” Furthermore, the agencies would be allowed to conduct interstate financial transactions, provided these were not prohibited by the states in which the agencies were located. The Exchequer would not threaten the business of state banks because it would not be permitted to offer loans. Thus, the hated discounts that had caused Tyler to explode at his cabinet months before would not be an issue. Finally, the president offered a solution to the vexing problem of separating the purse from the sword by informing Congress that his proposal “denie[d] any other control to the President over the agents who may be selected to carry it into execution but what may be indispensably necessary to secure the fidelity of such agents.” Tyler “disclaim[ed] all desire to have any control over the public moneys other than what [was] indispensably necessary to execute the laws.”17

In outlining his plan to Congress, the president alluded to the rancor of the special session and made clear that he had acted in good faith. He professed to believe the Clay Whigs had done the same. Lest there be any misunderstanding, however, he made equally clear that he believed he had done the right thing in vetoing the two bank bills sent to his desk. “Subsequent reflection and events since occurring,” he said, “have only served to confirm me in the opinions then entertained and frankly expressed.”18

Despite his certainty that he had acted appropriately during the special session, and despite what he may have felt was the political necessity of using the message to assert himself and reiterate his position, Tyler took pains to exhibit deference toward Congress. His statement about separating the purse from the sword directly addressed the concern Clay had raised during the special session. Tyler also emphasized that his plan depended upon the willingness of senators and congressmen to support it. It would be, he pointed out, “the creature of the law” and would exist “only at the pleasure of the legislature.” Even the approach he took in introducing his proposal was an attempt to soothe members of the legislative branch. Rather than provide every specific detail of his proposal, and determined to avoid the charge of presumptuousness, he informed lawmakers that he would only present the full plan for consideration if he was formally asked to do so. Tyler concluded by assuring Congress that he would seek the Exchequer’s repeal “if it be found not to subserve the purposes and objects for which it may be created.” He was “wedded” to “no theory.”19

Tyler was wedded, however, to the idea that he could win election in his own right in 1844. And he was convinced that his Exchequer offered the most beneficial—and constitutional—way to address the nation’s currency problems. By exhibiting deference to Congress in his message, the president had accomplished two things. First, he had explicitly paid fealty to the Whig doctrine of legislative supremacy. In this session of the Twenty-Seventh Congress, he would not allow himself to be portrayed as an abuser of executive authority. Rather, he sought to demonstrate to the American people that he was perfectly willing to work with lawmakers to devise a reasonable solution to what ailed the country economically, even though the majority of members and senators had spitefully read him out of the Whig Party in September. Second, Tyler had shrewdly painted the Clay Whigs into a corner. The Exchequer plan would not be “submitted in any overweening confidence in the sufficiency of my own judgment,” he declared, “but with much greater reliance on the wisdom and patriotism [emphasis added] of Congress.”20 Clay and the Whigs could either perform their patriotic duty and meet the president halfway, or they could reject his proposal out of hand and risk portraying themselves as unpatriotic and unwilling to do what was best for the country. Thus, there was a bit of political gamesmanship in Tyler’s message. The rhetoric mattered. He had crafted the words of his message to make himself appear as a reasonable servant of the people, one who had dedicated his presidency to finding a way out of the economic turmoil of the past nearly five years. This was clearly not a man who sought to antagonize all but the extreme states’ rights men, as many in Washington were now claiming. The president wanted the support of moderates.

Here, then, was another example of Tyler combining politics with principles, a recurring theme of his public life. Like nearly all of his state papers, the first annual message contains statements that explain his political philosophy and provides clues as to what motivated him ideologically throughout his career as a politician. Historians have overlooked a portion of this particular document in which Tyler expressed his view of the proper role the federal government should play in the economy. His words anticipated a portion of the free-market conservatism of later presidents such as Calvin Coolidge and Ronald Reagan. Acknowledging that his fellow Americans still suffered from the effects of the panic and recognizing that his Exchequer was not a guaranteed panacea for the country’s financial woes, he argued that “no scheme of governmental policy unaided by individual exertions can be available for ameliorating the present condition of things.” The American people had to rely largely on the “earnings of industry and the savings of frugality” to succeed economically. Tyler expressed his faith in his nation and in its citizens, proclaiming that the “country is full of resources and the people full of energy, and the great and permanent remedy for present embarrassments must be sought in industry, economy, the observance of good faith, and the favorable influence of time.”21

In some ways, the concrete ideas that undergirded Tyler’s Exchequer plan—especially the notion that a centralized government agency would regulate the circulation of the nation’s currency—may be seen as a precursor to the 1913 creation of the Federal Reserve System. Paradoxically, however, his contention that people should not rely on the government for their financial well-being and that instead industry and frugality, not the circulation of paper money, were the keys to prosperity reflects the views of some twenty-first-century opponents of the Fed. The apparent contradiction is perhaps best explained this way: Tyler grudgingly agreed with the Whig Party’s fundamental premise, that an adequate supply of paper money in circulation was essential for the country’s financial transactions. The complexity of the economy demanded it. But he was himself uncomfortable with a circulating medium that was not solely based on the amount of gold and silver available. What his first annual message reveals, then, and what is evident in his Exchequer plan, is that Tyler was willing to look beyond his own narrow views because doing so was the best for the country. To his credit, he had put aside his strict constitutional scruples and the longstanding aversion to paper money he inherited from his father. Once again, he would not play the part of the stubborn ideologue.22

Conceding economic realities was again partly a political calculation. Tyler had devised a fiscal agent that was, in the words of Upshur, “designed as a middle course between the sub-treasury and a national bank.” His entire cabinet had supported his proposal, which in itself was undoubtedly gratifying after what had transpired during the special session. “We have all agreed, without a single exception,” Upshur related soon after the bill was sent to Congress, “that our only course was to administer the government for the best interests of the country, and to trust to the moderates of all parties to sustain us.” As the regular session began, the president wanted to see if he could rally enough moderate Whigs and Democrats to the Exchequer to give himself a political base that would bolster his chances of winning election in 1844. The Exchequer would be the vehicle through which he could gauge support for himself and for his administration. The members of the “ready made” party that Tyler had spoken about with Tucker in Virginia were the very moderates Upshur described.23

The president sought to straddle the line between the Democratic and Whig Parties, no longer a member in good standing of either but trying to woo elements of both. From Williamsburg, Tucker continued to grumble that a states’ rights party was needed. He also believed Tyler had begun to show that he was intent on returning to the Democratic fold. Upshur corrected him. “But you certainly do Tyler some injustice in supposing that he pays any more court to the locos than to the other party,” he wrote. “His appointments show the reverse; they are made indiscriminately from both parties, but the greater part from the Whigs. He avoids alike Clay-men and Benton-men, for there is nothing to choose between them.” Tyler’s purpose was to avoid “ultraism on both sides, and ai[m] at the approbation of the temperate and sober minded of both parties.” Upshur closed, “Our object was to take what appeared to be good, and reject what appeared to be bad in each.”24

When the House of Representatives made the formal request—through a resolution of Caleb Cushing, a Tyler ally—for the administration to submit the Exchequer plan for consideration, the president asked his cabinet to draft the bill and an accompanying argument supporting it. “It [was] the work of two or three of us,” Upshur informed Tucker, “but chiefly of Webster.” Oddly, Treasury Secretary Forward had not been given the primary responsibility of writing the bill, though it did appear under his name in the official presentation to the House. He was already rumored to be on his way out of the administration and was, in the judgment of one Whig senator, “certainly unfit for his place.” Chosen largely for his potential help to Tyler in Pennsylvania, Forward was evidently little help at the Treasury Department.25

Upshur had apparently tried to persuade Webster to incorporate some of Tucker’s ideas into the bill, but the secretary of state “rejected them, probably because they related to, and attempted to, palliate the centralizing tendencies of the scheme.” Attorney General Legaré maintained that Webster’s handiwork made the Exchequer “plausible.” Upshur agreed. “I think the scheme would work well if it were adopted,” he declared. But he acknowledged that “there seem[ed] to be but little chance of this, since both parties condemn it. At all events, it is the best that we can do, and we must even be satisfied to trust it to its own fortunes.”26

Whigs in certain quarters of the country had found themselves impressed and encouraged by Tyler’s first annual message. “It is one of the best Papers that has come from Washington for many a long day,” one New Yorker gushed to Webster. “I have been all this morning stirring round among the talkers of all parties,” this Whig continued, “and have not heard a word but in its praise. Every honest unprejudiced man approves of it & the hope is generally express’d that Mr. Clay will not oppose it.” Thurlow Weed very perceptively concluded that President Tyler had “triumphed not only over his enemies but over himself. It is a great message.” Weed’s Albany Evening Journal endorsed the message as did two other Whig papers in New York City, the Commercial Advertiser and the Daily Express. The Washington Daily Madisonian trumpeted Tyler’s appeal to the political middle. Upshur was gratified that the message was “well received all over the country.” Yet he and many others who lauded Tyler’s effort recognized the hurdle awaiting the Exchequer plan in Congress.27

For a brief time in late December 1841, that hurdle did not appear insurmountable. The National Intelligencer, the Whig paper of record in Washington, counseled that the Exchequer was “entitled to calm and dispassionate consideration.” Indeed, some Whigs in the capital believed that since they clearly could not have the type of bank they introduced during the special session, Tyler’s version was better than nothing. Horace Greeley’s New York Tribune even reported that a majority of the Whigs in the House supported the president’s plan, a development largely echoed by the probank United States Gazette. Other Whigs, speaking informally, hinted that they might accept the Exchequer with certain alterations.28

Ultimately, however, there was never any realistic chance the Exchequer would win the sanction of both houses of Congress so that Tyler could sign it into law. It never received a fair hearing. Senator Clay, of course, loomed large over the Whig majority in both chambers. He wanted a bank—his version of a bank—or nothing at all. He certainly would not settle for Tyler’s plan, especially if that meant giving the president a political victory. The Exchequer plan, Clay said, “does not stand the least chance of being adopted, in the form proposed.” With very little effort expended to take the temperature of the politicians in Washington, he felt assured that the “great body of both parties are opposed to it.” According to Clay, the Whigs professed a sense of urgency for taking action to mitigate the effects of the economic depression, but the Exchequer would not see the light of day. For good measure, the senate leader also mocked the president’s contention that the Exchequer plan had garnered the support of the American people. Tyler “affects to believe that the People are with him, and the Politicians alone against him,” Clay snickered. “Poor deluded man!” To Tyler’s and the country’s detriment, the Great Compromiser had shown himself as the “Great Uncompromiser.”29

Clay had returned to Washington in a foul humor because his best-laid plans had been scuttled during the previous session and his party had suffered devastating losses in elections in several states during the fall of 1841, when many Whig partisans simply stayed away from the polls. Voters did not seem to know who spoke for the party—Congress or President Tyler. Clay was also suffering from a bad cold, which confined him to a sickbed for more than one week. In fact, he felt ill for much of the winter and announced that he would be retiring from the Senate during the session. It was therefore left to Mangum to eviscerate the Exchequer on the floor of the Senate and rally Whigs against it, which he did on December 30. The attacks on Tyler resumed as well. With typical bombast, Mangum accused the president of executive usurpation yet again (which makes one wonder if he had read the same message Tyler presented). His speech convinced Whigs who may have entertained the thought of supporting Tyler’s proposal to line up behind Clay. It would be a real bank or nothing; no quarter would be given to the president. “There is no prospect of an agreement between Congress and the President on the Currency and Finances,” one Whig concluded. Tyler was “so poor an imbecile that there [was] no such thing as keeping terms with him.30

Democrats, too, united in opposition to the Exchequer plan, even if they mostly did not exhibit the viciousness of their opponents toward the president. Most Democrats believed a return to the Independent Treasury was the solution to the nation’s currency problems. Whigs, of course, would have none of that, and they were, after all, still the majority party in both chambers. Senator Calhoun declared flatly that there was “no chance” the administration bill would pass and explained the reason for Democratic opposition: “We regard it as in fact a government bank, and believe that it would terminate in being a mere paper engine as it stands.”31

Tyler’s earnest attempt to create a middle-of-the-road solution to the country’s currency woes had failed. He had pleased no one, and the political base he had hoped for failed to coalesce around the Exchequer. As one historian has put it, “early in 1842 Tyler stood in a no-man’s land between the major parties, an untouchable pariah.”32

There was, however, more to the story. What should not be overlooked in the defeat of Tyler’s Exchequer plan was the extent to which the personal rivalry between Clay and Webster played a role. Certainly, any alternative to Clay’s bank that Tyler proposed was doomed to irrelevance, but it was not just a matter of putting the president in his place that motivated the Kentuckian. It was not just a struggle between Tyler and Clay. In fact, Tyler became almost a prop in the other drama splitting the Whig Party asunder. By remaining in the cabinet after the vetoes, Webster had sent unmistakably strong signals that he was intent on undermining Clay and wanted to chip away at the senator’s stronghold on their party. The fight between Tyler and Clay initiated a schism within the Whig ranks, but the battle beneath the surface between Clay and Webster loomed just as large for determining the future of the Whig Party. “The Clay men are exceedingly bitter against Tyler & his administration, especially Webster,” Calhoun observed with some satisfaction. “They hate them much more than their old opponents.” The South Carolinian seemed to have forgotten exactly how much Clay and the Whigs had hated President Jackson. Perhaps his memory of that battle had dimmed with time, but he did not exaggerate by much in his assessment of what Tyler had brought about. “The whig party is now divided into two hostile sections,” Calhoun wrote a political ally, “the whigs proper, as they call themselves, or Clay’s division of the party, and the administration whigs, or Tyler’s & Webster’s division.”33

Adding to Clay’s animus toward the Exchequer plan, then, was Webster’s hearty support of it. Many Whigs continued to rail against Webster for having remained in Tyler’s cabinet after September 11, when the other members resigned. To some, his seminal role in drafting the administration’s bill was too much to take. By offering his outspoken support of the Exchequer plan, Webster was trying to cast himself in the role of statesman and attempting to aid his own political fortunes, with an eye himself to the 1844 presidential campaign. All he succeeded in doing, though, was to further alienate Whigs in his home state of Massachusetts and strengthen his enemies, who overwhelmingly supported Clay’s position. His overt support of the Tyler administration—indeed, his very place in the cabinet—sealed Webster’s political fate. He stood no chance of receiving the Whig nomination for president in 1844.34

Webster had also irritated the thin-skinned Tyler with a speech he delivered at Faneuil Hall defending the Exchequer. After reading it, the president complained to Tazewell that it was “fairly deducible from what he [Webster] says that the exchequer is his plan.” Tyler wanted the record to reflect what had actually transpired as the administration presented the proposal, and he did not want Webster to claim more ownership than he deserved. “For good or evil,” the president declared, “it [was] of my own purposing, it being the best thing which occurred to me. It [was] the cabinet’s by adoption.” Tyler later explained to his son Robert that “the plan itself was my own and was drawn up at my house in Williamsburg” in the autumn of 1841. As always, Tyler remained alert for people who might undermine his authority and his place in history. He wanted it known that he was the one making the decisions in the White House, even if that meant taking the credit for a failed proposal.35

Ultimately, that proposal died because of the congressional Whig majority’s determination that they—not the president—spoke for the party. By the summer of 1842, they could report with satisfaction that “the exchequer is never mentioned and [it] will soon be forgotten that such a measure ever was proposed.” The bill would formally die when it came up for a vote in January 1843, as Democrats who continued to push for a revival of the Independent Treasury joined Whigs who had fallen in line behind Clay to vote it down. Well before that vote, however, knowing that the fate of the Exchequer had already been assured, Tyler began to entertain the thought of doing what Tucker had been urging him to consider for some time: forming a third party.36