This Week in
American History

December 26 — January 1, 1839

Lincoln's Fiery 'Sub-Treasury' Speech Defends the National Bank

During the waning months of his Administration, President Martin Van Buren (1837-41) had sponsored legislation known as the Sub-Treasury Plan, which had so far failed to pass both Houses of Congress. The 1840 Presidential election was fast approaching, and the Whig Party, which supported the American System of economic development, was hopeful that the almost twelve years of disastrous policies sponsored by the previous two administrations could soon be reversed.

President Andrew Jackson had withdrawn the government's deposits from the U.S. National Bank, founded by Alexander Hamilton, and had placed them in "pet banks" owned by his cronies. To make matters worse, he had vetoed the Maysville Road Bill, which had allocated Federal funds for building a road in Kentucky. These two actions severely limited any Federal support of infrastructure projects, which most of Jackson's cohorts declared to be unconstitutional. This assault on America's productive capacity had been the strategy of the British Empire ever since the first colonists arrived in Massachusetts Bay, and the Whig Party recognized the implications for America's national security.

The State of Illinois, trying to develop its resources on what was then still the frontier, passed infrastructure legislation which included a canal that would link its ports on Lake Michigan to the Mississippi River. Because of the Federal strangulation of credit, Illinois had to issue its own bonds to finance the needed projects. The lack of a National Bank tied America's economy to the ups and downs of the London Markets, so that the Panic of 1837 wreaked havoc on the infrastructure projects of Illinois and many other states.

In that context, the Presidential election of 1840 loomed large. The Whig Party in Illinois decided to prepare for the coming opportunity by holding debates with the Democrats to highlight the differences in policies. Abraham Lincoln was then serving as a State Representative and a statewide Whig Committeeman, and he was chosen as one of the Whig spokesmen in the debates.

The series of debates began in November of 1839, and continued through December, with Whig and Democrat speakers alternating. Lincoln did very well in his first debate, but felt that he had not sufficiently answered Stephen A. Douglas in the second debate. Therefore, he scheduled a third appearance on December 26, and his presentation was a thorough discussion of the difference between placing government money in a National Bank or placing it in the proposed Sub-Treasury locations.

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