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Military career 7th President of the United States First term
Second term
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The Specie Circular is a United States presidential executive order issued by President Andrew Jackson in 1836 pursuant to the Coinage Act of 1834. It required payment for government land to be in gold and silver (specie). [1]
The Specie Circular was a reaction to the growing concerns about excessive speculations of land after the Indian removal, which was mostly done with soft currency. The sale of public lands increased five times between 1834 and 1836. Speculators paid for these purchases with depreciating paper money. [2] While government law already demanded that land purchases be completed with specie or paper notes from specie-backed banks, a large portion of buyers used paper money from state banks not backed by hard money as a consequence of Jackson's veto of the rechartering of the Second Bank of the United States. [3]
On July 11, 1836, Jackson ordered Secretary of the Treasury Levi Woodbury to issue the Specie Circular under federal law whereby the government refused to take anything but gold and silver specie for sales of public lands of over 320 acres after August 15, 1836. It did make a special exception to accept certain types of Virginia scrip. The executive order allowed legitimate settlers (non-speculators, or those purchasing plots of 320 acres or less) to use paper until December 15, 1836. [4] [5]
Because the order was one of Jackson's last acts in office, most of its consequences occurred during and were attributed to the presidency of Martin Van Buren. The devaluation of paper currency only increased with Jackson's proclamation. This sent inflation and prices upwards. Many at the time (and historians subsequently) blamed the Specie Circular for the rise in prices and the following Panic of 1837. Cries of "Rescind the circular!" went up and former President Jackson sent word to Van Buren asking him not to rescind the order. Jackson believed that it had to be given enough time to work. Lobbying efforts, especially by bankers, increased in Washington in an attempt to revoke the Specie Circular. Others, like Nicholas Biddle, believed that Jackson's defeat of the Second Bank of the United States was directly responsible for the irresponsible creation of paper money by the state banks which had precipitated this crisis. [6]
The restrictions on credit caused by the order resulted in numerous bankruptcies and the failure of smaller banks. In the South the resulting recession drove down cotton prices well into the 1840s. Small farmers who had bought land on credit were unable to meet their loan repayments with their income from staple crops cut by a half. When they defaulted, "[t]heir land and slaves were repossessed and sold at auction, usually to already well-established slaveholders. ... Some farmers were able to keep a few acres and eke out a living as lesser yeomen. But many lost everything and fell into tenancy and sharecropping. When the cotton market finally recovered, affluent slaveholders held nearly all the South’s best land." [7]
The Democratic party split in two ways regarding the order. Some, like Thomas Hart Benton, supported the use of sound money. The Locofoco wing of the party also agreed with Benton. Senators Nathaniel P. Tallmadge and William C. Rives supported the other side of the party, in favor of paper money. [8] Senator John Pendleton King of Georgia blamed Jackson for the effects of the circular (among other policies), stating in an 1837 speech that he "had not the slightest doubt that our present difficulties were owing entirely to the unfortunate policy and violent measures of the Executive for several years past. This was the only cause, and this was abundantly sufficient." [9] In the United States House of Representatives, John Bell even challenged his own party member, James K. Polk, for his position as Speaker of the House of Representatives over the issue. [6]
Andrew Jackson was an American lawyer, planter, general, and statesman who served as the seventh president of the United States from 1829 to 1837. Before his presidency, he gained fame as a general in the U.S. Army and served in both houses of the U.S. Congress. Often praised as an advocate for ordinary Americans and for his work in preserving the union of states, Jackson has also been criticized for his racial policies, particularly his treatment of Native Americans.
James Knox Polk was an American lawyer and politician who served as the 11th president of the United States from 1845 to 1849. He also served as the 13th speaker of the House of Representatives from 1835 to 1839 and the ninth governor of Tennessee from 1839 to 1841. A protégé of Andrew Jackson, he was a member of the Democratic Party and an advocate of Jacksonian democracy. Polk is known for extending the territory of the United States through the Mexican–American War during his presidency, annexing the Republic of Texas, the Oregon Territory, and the Mexican Cession after winning the Mexican–American War.
Martin Van Buren was an American lawyer, diplomat, and statesman who served as the eighth president of the United States from 1837 to 1841. A primary founder of the Democratic Party, he served as New York's attorney general and U.S. senator, then briefly as the ninth governor of New York before joining Andrew Jackson's administration as the tenth United States secretary of state, minister to Great Britain, and ultimately the eighth vice president from 1833 to 1837, after being elected on Jackson's ticket in 1832. Van Buren won the presidency in 1836 against divided Whig opponents. Van Buren lost re-election in 1840, and failed to win the Democratic nomination in 1844. Later in his life, Van Buren emerged as an elder statesman and an anti-slavery leader who led the Free Soil Party ticket in the 1848 presidential election.
The Panic of 1837 was a financial crisis in the United States that began a major depression, which lasted until the mid-1840s. Profits, prices, and wages dropped, westward expansion was stalled, unemployment rose, and pessimism abounded.
The Panic of 1819 was the first widespread and durable financial crisis in the United States that slowed westward expansion in the Cotton Belt and was followed by a general collapse of the American economy that persisted through 1821. The Panic heralded the transition of the nation from its colonial commercial status with Europe toward an independent economy.
Thomas Hart Benton, nicknamed "Old Bullion", was an American politician, attorney, soldier, and longtime United States Senator from Missouri. A member of the Democratic Party, he was an architect and champion of westward expansion by the United States, a cause that became known as Manifest Destiny. Benton served in the Senate from 1821 to 1851, becoming the first member of that body to serve five terms. He was born in North Carolina.
Wildcat banking was the issuance of paper currency in the United States by poorly capitalized state-chartered banks. These wildcat banks existed alongside more stable state banks during the Free Banking Era from 1836 to 1865, when the country had no national banking system. States granted banking charters readily and applied regulations ineffectively, if at all. Bank closures and outright scams regularly occurred, leaving people with worthless money.
Hard money policies support a specie standard, usually gold or silver, typically implemented with representative money.
Pet banks is a derogatory term for state banks selected by the U.S. Department of Treasury to receive surplus Treasury funds in 1833. Pet banks are sometimes confused with wildcat banks. Although the two are distinct types of institutions that arose concomitantly, some pet banks were known to also engage in practices of wildcat banking. They were chosen among the big U.S. banks when President Andrew Jackson vetoed the recharter for the Second Bank of the United States, proposed by Henry Clay four years before the recharter was due. Clay intended to use the rechartering of the bank as a topic in the upcoming election of 1832. The charter for the Second Bank of the United States, which was headed by Nicholas Biddle, was for a period of twenty years beginning in 1816, but Jackson's distrust of the national banking system led to Biddle's proposal to recharter early, and the beginning of the Bank War. Jackson cited four reasons for vetoing the recharter, each degrading the Second Bank of the United States in claims of it holding an exorbitant amount of power. These reasons for vetoing the recharter were centered around Jackson's belief in his role as the representative of the common man. Amos Kendall, who was the intellectual driving force behind Jackson's 1832 election and Jackson himself, led Jackson to believe that the bank posed a political threat to Jackson. Kendall cautioned Jackson that unless he got rid of the Second Bank of the United States, it would find a way to elect its own candidate to the White House after Jackson was gone. Jackson saw the bank as a threat to the common man and "the great enemy of republicanism", and argued that as long as the national bank existed, the working class was constantly in danger of losing their stake in government.
The Independent Treasury was the system for managing the money supply of the United States federal government through the U.S. Treasury and its sub-treasuries, independently of the national banking and financial systems. It was created on August 6, 1846, by the 29th Congress, with the enactment of the Independent Treasury Act of 1846. It was expanded with the creation of the national banking system in 1863. It functioned until the early 20th century, when the Federal Reserve System replaced it. During this time, the Treasury took over an ever-larger number of functions of a central bank and the U.S. Treasury Department came to be the major force in the U.S. money market.
John Pendleton King was an attorney, planter, and politician, serving as United States Senator from Georgia. He resigned in 1837 before the end of his term to devote himself to his plantation and business, serving for nearly 40 years as president of the Georgia Railroad and Banking Company, and becoming a cotton manufacturer. He acquired large plantation holdings, and by 1860 owned 69 slaves to work the cotton fields and related trades.
The Bank War was a political struggle that developed over the issue of rechartering the Second Bank of the United States (B.U.S.) during the presidency of Andrew Jackson (1829–1837). The affair resulted in the shutdown of the Bank and its replacement by state banks.
The presidency of Andrew Jackson began on March 4, 1829, when Andrew Jackson was inaugurated as President of the United States, and ended on March 4, 1837. Jackson, the seventh United States president, took office after defeating incumbent President John Quincy Adams in the bitterly contested 1828 presidential election. During the 1828 presidential campaign, Jackson founded the political force that coalesced into the Democratic Party during Jackson's presidency. Jackson won re-election in 1832, defeating National Republican candidate Henry Clay by a wide margin. He was succeeded by his hand-picked successor, Vice President Martin Van Buren, after Van Buren won the 1836 presidential election.
Hard Times Tokens are American large or half cent-sized copper or brass tokens, struck from about 1833 through 1843, serving as unofficial currency. These privately made pieces, comprising merchant, political and satirical pieces, were used during a time of political and financial crisis in the United States.
The presidency of Martin Van Buren began on March 4, 1837, when Martin Van Buren was inaugurated as President of the United States, and ended on March 4, 1841. Van Buren, the incumbent vice president and chosen successor of President Andrew Jackson, took office as the eighth United States president after defeating multiple Whig Party candidates in the 1836 presidential election. A member of the Democratic Party, Van Buren's presidency ended following his defeat by Whig candidate William Henry Harrison in the 1840 presidential election.
The flour riot of 1837 was a food riot that broke out in New York City in February 1837, and lasted less than a day. This violent civil disturbance grew out of a public meeting called by the Locofocos to protest runaway prices, as hungry workers plundered private storerooms filled with sacks of hoarded flour. Commodity prices had skyrocketed over the winter of 1836–37, an inflationary boom fueled by foreign investment and two successive years of wheat crop failures. The riot was also a sign of the impending financial crisis known as the Panic of 1837, that hit the American economy the following month.
The 1840 Democratic National Convention was held in Baltimore, Maryland, from May 5 to May 6. The Democratic Party re-nominated President Martin Van Buren by acclamation, but failed to select a nominee for vice president. Van Buren is the only major party presidential nominee since the ratification of the 12th Amendment to seek election without a running mate. Dragged down by the unpopularity of the Panic of 1837, Van Buren was defeated by the Whig Party's ticket in the 1840 presidential election.
A Treasury Note is a type of short term debt instrument issued by the United States prior to the creation of the Federal Reserve System in 1913. Without the alternatives offered by a federal paper money or a central bank, the U.S. government relied on these instruments for funding during periods of financial stress such as the War of 1812, the Panic of 1837, and the American Civil War. While the Treasury Notes, as issued, were neither legal tender nor representative money, some issues were used as money in lieu of an official federal paper money. However the motivation behind their issuance was always funding federal expenditures rather than the provision of a circulating medium. These notes typically were hand-signed, of large denomination, of large dimension, bore interest, were payable to the order of the owner, and matured in no more than three years – though some issues lacked one or more of these properties. Often they were receivable at face value by the government in payment of taxes and for purchases of publicly owned land, and thus "might to some extent be regarded as paper money." On many issues the interest rate was chosen to make interest calculations particularly easy, paying either 1, 1+1⁄2, or 2 cents per day on a $100 note.
The Second Bank of the United States opened in January 1817, six years after the First Bank of the United States lost its charter. The Second Bank of the United States was headquartered in Carpenter's Hall, Philadelphia, the same as the First Bank, and had branches throughout the nation. The Second Bank was chartered by many of the same congressmen who in 1811 had refused to renew the charter of the original Bank of the United States. The predominant reason that the Second Bank of the United States was chartered was that in the War of 1812, the U.S. experienced severe inflation and had difficulty in financing military operations. Subsequently, the credit and borrowing status of the United States was at its lowest level since its founding.
William M. Gouge was an American economist who published A Short History of Paper Money and Banking in the United States, an 1833 treatise that advocated for hard money policies. Following the publication of his treatise, Gouge emerged as an important figure in the presidential administrations of Andrew Jackson and Martin Van Buren, and he played a major role in the creation of the Independent Treasury system. Historian Sean Wilentz writes that, "if anyone was the intellectual architect of Jacksonian economic policy after 1832, it was the Philadelphia radical William Gouge".
