Panic of 1837 · US History

What was the purpose of the Independent Treasury (or 'Sub-Treasury') system proposed by Martin Van Buren?

To lend money directly to small farmers to prevent foreclosures
To allow the federal government to buy and sell stocks on the New York Stock Exchange
To distribute tax revenue equally among the different branches of government
To keep federal funds in government vaults rather than in private or state banks

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Correct answer: To keep federal funds in government vaults rather than in private or state banks

Van Buren wanted to 'divorce' the government from banking to avoid the corruption and instability of the 'pet bank' system. The Independent Treasury kept federal deposits in government-owned vaults, though it did little to stimulate the depressed economy.

Difficulty: Medium Question 6 of 20

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What was the purpose of the Independent Treasury (or 'Sub-Treasury') system proposed by Martin Van Buren?

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