Polk's Policies. The South thought that Polk had been elected by its own votes and it meant to have a full reward. Under the guidance of Tyler and Calhoun, a joint resolution inviting Texas to join the Union passed Congress. The day before Polk's inauguration, the invitation was forwarded to Austin, Texas. This action permitted the taciturn, determined Polk to divert his energy to completing his own policy of expansion and reform. Convinced of the correctness of his goals, he set about pushing through Congress a four-point program which provided for tariff reform through rate reduction, the restoration of the Independent Treasury, the settlement of the Oregon dispute with Britain, and the establishment of the American claim that the border between Texas and Mexico was marked by the Rio Grande, some hundred miles south of the Nueces River, the border claimed by Mexico. He also meant to establish the moderate Democrats as the dominant force within the party. The latter course disappointed both the Calhoun and Van Buren factions, but it assured Polk that he would be master in his own house.

The Tariff of 1846 and the Independent Treasury. With the assistance of his shrewd Secretary of the Treasury, Robert J. Walker, Polk maneuvered the tariff of 1846 through Congress. Despite a Senate split in which Vice-President George M. Dallas was compelled to cast the deciding vote, a tariff was passed which established the ad valorem principle as the basis for maintaining low rates, and which drove most Pennsylvania Democrats into opposition. The tariff convinced Eastern Democrats who represented industrial constituencies that Polk was working to gratify Southern demands. Shortly afterward, the Independent Treasury was also approved by a largely partisan vote. Though supposedly a hard money measure, it permitted payment of government obligations not only in specie but also in treasury notes, a move tantamount to the establishment of a federally backed paper currency.

The Warehousing Act. Supplementing the tariff and treasury bills was the Warehousing Act. This gave importers the right to deposit imported goods under government bond until such time as they were needed for consumption. This freed the commercial interests from having to tie up large amounts of money in tariff payments until they were able to reclaim their investment quickly. Most important, the Tariff of 1846 committed the United States to a modified free trade policy in the hope that by allowing European, and particularly British, manufacturers easy access to the American market, reciprocal access would be obtained for American farm produce.

The Oregon Territory. Polk's program of domestic reform, though important, was insignificant in comparison with his territorial program. Of particularly pressing concern was the future of the Oregon Territory. Since 1818, it had been under the joint occupation by Britain and the United States, but in 1827 a proviso was added to the treaty which permitted either power to end joint occupation after a year's notice. The fur-trading wealth of the region attracted the interest of the Hudson's Bay Company, while its agricultural promise lured several thousand Americans to the Willamette Valley, south of the Columbia River. During the election of 1844, Democratic campaigners declared that the days of joint occupation were numbered. "Fifty-four forty or fight" was the inflammatory slogan which announced the Democrats' intention to secure the entire region for the United States. Polk accentuated the problem when he announced in his inaugural address that the American title to Oregon was "clear and unquestionable."

The Oregon Negotiations. Since every administration after that of Monroe had announced its willingness to settle for latitude 49° as an Oregon boundary, Polk and his Secretary of State, James Buchanan, offered a similar compromise to the British in July 1845, but deleted the crucial clause assuring both parties free navigation of the Columbia River. When the proposal was turned down by Pakenham, the British envoy, tension mounted. In his annual message to Congress in 1845, Polk declared his intention to terminate joint occupation. Party antagonisms reappeared when Northwestern expansionists, guided by Senators Lewis Cass of Michigan and Edward A. Hannegan of Indiana, demanded total annexation, while Southern Democrats, under the leadership of Calhoun, called for conciliation leading to a compromise settlement with Britain. The Southerners recognized that the United States could hardly afford war with both Britain and Mexico; they therefore proposed to surrender Northwestern claims; and they found ready allies in the Whigs, whose commercial interests made them view war without enthusiasm. This South-Whig alliance succeeded in adding to Polk's order terminating joint occupation of Oregon by British and American troops the pious hope that the dispute would be settled peaceably.

The Oregon Settlement. Powerful commercial and financial interests in the North threw their weight behind a peaceable settlement. Their primary concern was to obtain control of such promising western ports as San Francisco and Puget Sound. Given a choice between war for California and war for the northern reaches of the Oregon Territory, Polk chose the former. In Britain, the Peel Ministry, eager to advance free-trade policy, decided upon compromise; they agreed to accept Polk's proposal without insisting upon free transit of the Columbia River. On June 15, 1846, five days after Polk submitted the British proposal to the Senate, it was approved. Only fourteen Northwestern expansionists opposed the decision. The United States, already at war with Mexico, turned its full attention to winning that conflict.