Cries of "rescind the circular!"went up and former president Jackson sent word to Van Buren asking him not to rescind the order, believing that it had to be given enough time to work. Others, like Nicholas Biddle, believed that Jackson's dismantling of the Bank of the United States was directly responsible for the irresponsible creation of paper money by the state banks which had precipitated this panic.[155] The Panic of 1837 loomed large over the 1838 election cycle, as the carryover effects of the economic downturn led to Whig gains in both the U.S. House and Senate. The state elections in 1837 and 1838 were also disastrous for the Democrats,[156] and the partial economic recovery in 1838 was offset by a second commercial crisis later that year.[157]
To address the crisis, the Whigs proposed rechartering the national bank. The president countered by proposing the establishment of an independent U.S. treasury, which he contended would take the politics out of the nation's money supply. Under the plan, the government would hold its money in gold or silver, and would be restricted from printing paper money at will; both measures were designed to prevent inflation.