Several reasons accounted for this change. Harrison's death, within a month after his inauguration, made John Tyler President, and Tyler first refused appointments to Whigs, and then vetoed the bill, passed by a Whig Congress, re-establishing the United States Bank. He said that he had been opposed, for twenty-five years, to the exercise of such a power, if any such power existed under the Constitution. This completed the break with the party that elected him. Henry Clay denounced his action, the Cabinet, except Webster, resigned in a body, and the Whigs with great unanimity indorsed the Kentucky statesman for President in 1844. To add to the complications in New York, John C. Spencer, who now became secretary of war, so zealously espoused and warmly defended the President that feelings of mutual distrust and ill-will soon grew up between him and Weed. It is doubtful if any New York Whig, at a time of such humiliation, could have accepted place in Tyler's Cabinet and remained on terms of political intimacy with Weed; but, of all men, John C. Spencer was the least likely to do so. In Freeman's celebrated cartoon, "The Whig Drill," Spencer is the only man in the squad out of step with Thurlow Weed, the drum-major.

Governor Seward also played a part in the story of his party's downfall. The school question, growing out of his recommendation that separate schools for the children of Roman Catholics should share in the public moneys appropriated by the State for school purposes, lost none of its bitterness; the McLeod controversy put him at odds with the national Administration; and the Virginia controversy involved him in a correspondence that made him odious in the South. In his treatment of the McLeod matter, Seward was clearly right. Three years after the destruction of the Caroline, which occurred during the Canadian rebellion, Alexander McLeod, while upon a visit in the State, boasted that he was a member of the attacking party and had killed the only man shot in the encounter. This led to his arrest on a charge of murder and arson. The British Minister based his demand for McLeod's release on the ground that the destruction of the Caroline "was a public act of persons in Her Majesty's service, obeying the orders of their superior authorities." In approving the demand, Lord Palmerston suggested that McLeod's execution "would produce war, war immediate and frightful in its character, because it would be a war of retaliation and vengeance." Webster, then secretary of state, urged Seward to discontinue the prosecution and discharge McLeod; but the Governor, promising a pardon if McLeod was convicted, insisted that he had no power to interfere with the case until after trial, while the courts, upon an application for McLeod's discharge on habeas corpus, held that as peace existed between Great Britain and the United States at the time of the burning of the Caroline, and as McLeod held no commission and acted without authority, England's assumption of responsibility for his act after his arrest did not oust the court of its jurisdiction. Fortunately, McLeod, proving his boast a lie by showing that he took no part in the capture of the Caroline, put an end to the controversy, but Seward's refusal to intervene broke whatever relations had existed between himself and Webster.

The Virginia correspondence created even greater bitterness. The Governor discovered that a requisition for the surrender of three coloured men, charged with aiding the escape of a fugitive slave, was based upon a defective affidavit; but, before he could act, the court discharged the prisoners upon evidence that no offence had been committed against the laws of Virginia. Here the matter might very properly have ended; but, in advising Virginia's governor of their discharge, Seward voluntarily and with questionable propriety, enlarged upon an interpretation of the constitutional provision for the surrender of fugitives from justice, contending that it applied to acts made criminal by the laws of both States, and not to "an act inspired by the spirit of humanity and of the Christian religion," which was not penal in New York. This was undoubtedly as good law as it was poor politics, for it needlessly aroused the indignation of Virginia, whose legislature retaliated by imposing special burdens upon vessels trading between Virginia and New York until such time as the latter should repeal the statute giving fugitive slaves the right of trial by jury.

The immediate cause of the Whig defeat, however, had its origin in disasters incident to the construction of the canals. It had been the policy of Governor Marcy, and other Democratic leaders, to confine the annual canal expenditures to the surplus revenues, and, in enlarging the Erie, it was determined to continue this policy. On the other hand, the Whigs advocated a speedy completion of the public works, limiting the state debt to an amount upon which interest could be paid out of the surplus revenues derived from the canal. This policy, backed by several Democratic members of the Senate in 1838, resulted in the authorisation of a loan of four millions for the Erie enlargement. In 1839 Seward, still confident of the State's ability to sustain the necessary debt, advised other improvements, including the completion of the Genesee Valley and Black River canals, as well as the construction of three railroads, at a total estimated expenditure of twelve to fifteen millions. By 1841, the debt had increased to eighteen millions, including the loan of four millions, while the work was scarcely half finished. To add to the difficulty, state stocks depreciated over twenty per cent., embarrassing the administration in its efforts to raise money. The Democrats pronounced such a policy disastrous and ruinous; and, although the Whigs replied that the original estimates were wrong, that the price of labour and material had advanced, and that when completed the canals would speedily pay for themselves, the people thought it time to call a halt, and in the election of 1841 they called it.[35]

It was this overwhelming defeat that so depressed the Whigs, gathered at the Syracuse convention, as they looked over the field for a gubernatorial candidate to lead them, if possible, out of the wilderness of humiliation. Seward had declined a renomination. He knew that his course, especially in the Virginia controversy, had aroused a feeling of hostility among certain Whigs who not only resented his advancement over Granger and Fillmore, his seniors in years and in length of public service, but who dreaded his lead as too bold, too earnest, and too impulsive. The fact that the Abolitionists had already invited him to accept their nomination for President in 1844 indicated the extent to which his Virginia correspondence had carried him. So, he let his determination be known. "My principles are too liberal, too philanthropic, if it be not vain to say so, for my party," he wrote Christopher Morgan, then a leading member of Congress. "The promulgation of them offends many; the operation of them injures many; and their sincerity is questioned by about all. Those principles, therefore, do not receive fair consideration and candid judgment. There are some who know them to be right, and believe them to be sincere. These would sustain me. Others whose prejudices are aroused against them, or whose interests are in danger, would combine against me. I must, therefore, divide my party in convention. This would be unfortunate for them, and, of all others, the most false position for me. And what have I to lose by withdrawing and leaving the party unembarrassed? My principles are very good and popular ones for a man out of office; they will take care of me, when out of office, as they always have done. I have had enough, Heaven knows, of the power and pomp of place."[36]

With Seward out of the way, Luther Bradish was the logical candidate for governor. Fillmore had many friends present, and John A. Collier of Binghamton, alternating between hope and fear, let his wishes be known. But, as lieutenant-governor, Bradish had won popularity by firmness, patience, and that tact which springs from right feeling, rather than cold courtesy; and, in the end, the vote proved him the favourite. For lieutenant-governor, the convention chose Gabriel Furman, a Brooklyn lawyer of great natural ability, who had been a judge of the municipal court and was just then closing a term in the State Senate, but whose promising career was already marred by the opium habit. He is best remembered as one of Brooklyn's most valued local historians. The resolutions, adhering to the former Whig policy, condemning Tyler's vetoes and indicating a preference for Clay, showed that the party, although stripped of its enthusiastic hopes, had lost none of its faith in its principles or confidence in its great standard-bearer.

The Democrats had divided on canal improvements. Beginning in the administration of Governor Throop, one faction, known as the Conservatives, had voted with the Whigs in 1838, while the other, called Radicals, opposed the construction of any works that would increase the debt. This division reasserted itself in the Legislature which convened in January, 1842. The Radicals elected all the state officers. Azariah C. Flagg became comptroller, Samuel Young secretary of state, and George P. Barker attorney-general. Six canal commissioners, belonging to the same wing of the party, were also selected. Behind them, as a leader of great force in the Assembly, stood Michael Hoffman of Herkimer, ready to rain fierce blows upon the policy of Seward and the Conservatives. Hoffman had served eight years in Congress, and three years as a canal commissioner. He was now, at fifty-four years of age, serving his first term in the Assembly, bringing to the work a great reputation both for talents and integrity, and as a powerful and effective debater.[37] Hoffman was educated for a physician, but afterward turned to the law. "Had he not been drawn into public life," says Thurlow Weed, "he would have been as eminent a lawyer as he became a statesman."[38]

The Albany Regency, as a harmonious, directing body, had, by this time, practically gone out of existence. Talcott was dead, Marcy and Silas Wright were in Washington, Benjamin F. Butler, having resigned from the Cabinet as attorney-general, in 1838, had resumed the practice of his profession in New York City, and Van Buren, waiting for another term of the Presidency, rested at Lindenwald. The remaining members of the original Regency, active as ever in political affairs, were now destined to head the two factions—Edwin Croswell, still editor of the Albany Argus, leading the Conservatives, with Daniel S. Dickinson, William C. Bouck, Samuel Beardsley, Henry A. Foster, and Horatio Seymour. Azariah C. Flagg, with Samuel Young, George P. Barker, and Michael Hoffman, directed the Radicals. All were able men. Bouck carried fewer guns than Young; Beardsley had weight and character, without much aptitude; Foster overflowed with knowledge and was really an able man, but his domineering nature and violent temper reduced his influence. Seymour, now only thirty-two years old, had not yet entered upon his illustrious and valuable public career; nor had Daniel S. Dickinson, although of acknowledged ability, exhibited those traits which were to distinguish him in party quarrels. He did not belong in the class with Marcy and Wright, though few New Yorkers showed more indomitable courage than Dickinson—a characteristic that greatly strengthened his influence in the councils of the leaders whose differences were already marked with asperity.

Success is wont to have magical effects in producing a wish to put an end to difference; and the legislative winter of 1843 became notable for the apparent adjustment of Democratic divisions. The Radicals proposed the passage of an act, known as the "stop and tax law of 1842," suspending the completion of the public works, imposing a direct tax, and pledging a portion of the canal revenues as a sinking fund for the payment of the existing debt. It was a drastic measure, and leading Conservatives, with much vigour, sought to obtain a compromise permitting the gradual completion of the most advanced works. Bouck favoured sending an agent to Holland to negotiate a loan for this purpose, a suggestion pressed with some ardour until further effort threatened to jeopardise his chance of a renomination for governor; and when Bouck ceased his opposition other Conservatives fell into line. The measure, thus unobstructed, finally became the law, sending the Democrats into the gubernatorial campaign of 1842 with high hopes of success.

By accident or design, the Democratic state convention also met at Syracuse on October 7. William C. Bouck and Daniel S. Dickinson had been the candidates, in 1840, for governor and lieutenant-governor, and they now demanded renomination. The Radicals wanted Samuel Young or Michael Hoffman for governor; and, before the passage of the "stop and tax law," the contest bid fair to be a warm one. But, after making an agreement to pledge the party to the work of the last Legislature, the Radicals withdrew all opposition to Bouck and Dickinson. In their resolutions, the Democrats applauded Tyler's vetoes; approved the policy of his administration; denounced the re-establishment of a national bank; opposed a protective tariff; and favoured the sub-treasury, hard money, a strict construction of the Constitution, and direct taxation for public works.