1846- Independent Treasury Act

Federal Reserve

This Act required that all federal funds be deposited in treasuries independent of private banks. It also mandated that all debts due to the federal government be paid in gold, silver, or treasury notes.


Part of President Polk's election platform had been the establishment of an Independent Treasury to hold Federal Funds. Creating an Independent Treasury had been a major goal of the Democrats. Establishing the Independent Treasury was seen as the final act in eliminating vestiges of what had been bad about the Second Bank of the United States. The Independent Treasury Act ensured that federal funds would not be placed in private banks. All Federal funds had to be placed in the new entity created by the Act. The Independent Treasury Act also required that all federal disbursements be made in gold or silver, or with paper money that was backed by gold or silver. The purpose of the disbursement clause in the act was to try to cool down the speculation regarding land that was supposedly caused by access to easy money