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After President Andrew Jackson vetoed the bill to recharter the Bank of the United States, he transferred (1833) government funds from the bank to state banks (the "pet banks"). Those banks, however, used the funds as a basis for speculation, which was already rampant and was soon to be further increased by the distribution of the federal surplus among the states. The situation was brought to a head by Jackson's issue of the Specie Circular (1836), which led to a drain on the "pet banks" and their collapse in the Panic of 1837. President Martin Van Buren then proposed that an independent treasury be set up that would be isolated from all banks. The proposal met considerable opposition and failed to pass the House of Representatives in 1837 and again in the sessions of 1837–38 and 1838–39.
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