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Timeline - The 1830s
Impossible come conquer, yet v the intrepid soul of the mountain men, miners, and also pioneers, castle would start an earnest try as the country moved, in its first real phase, from east to west.
You are watching: Why was the specie circular enacted?
Photo above: freedom Rock ~ above the Oregon Trail. First mentioned by Parker in 1835, and also carries an inscription on therock v the name of early trappers and explorers. Photograph William H. Jackson, circa 1870. Right: painting by Percy Moran, 1912, reflects the intensity of the fight of the Alamo. Photo courtesy Library the Congress.
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1836 - DetailJuly 11, 1836 - The Specie act is approve by executive order of president Andrew Jackson. This act would lead to the fail of the economic climate of floor speculation and also the panic of 1837.President Andrew Jackson had specific ideas around how to take care of the economic climate that to be controversial, if maintaining great overall goals, i.e. To eliminate the nationwide debt. The defunded the second Bank of the United claims in 1832 and also withdrew ten million dollars of federal government money indigenous it and deposited the money in state banks and also private institutions. Trouble was, those institutions started loaning money, and basically printing currency, in order to loan speculators in public soil purchases the money required to edge the settler soil market. Since many private financial institutions did not have actually hard money to earlier their paper, even though that had actually been the necessity of specie-backed state institutions, this led to rampant speculation on windy land obtained after Indian removal.Between 1834 and also 1836, 5 times the amount of public lands had actually been offered than in prior years. This resulted in high inflation and also prevented numerous actual inhabitants from to buy land at reasonable prices. Speculation to be so large that through January 1, 1836, bank deposits had risen come $251,000,000 ($61m in 1930), yet loans and discounts now far outpaced that resources at $457,000,000 ($200m in 1930) v notes of $140,000,000 ($61m in 1930) more. Jackson had, however, prospered at one big goal, the national debt had been eliminated as that January 1, 1835. This gave him added credibility within part circles come enact additional reforms. So while Jackson"s purposes were watch good, i.e. To curb inflation and speculation, eliminate that nationwide debt, add to guard versus the decreasing value of document currency, the issuance the the Specie act or Specie one by executive Order on July 11, 1836, actually made the trouble worse. The act forced payment in gold and also silver because that western public floor purchases of over three hundred and twenty acres, i m sorry many negative settlers did not have, and also it brought about a operation on those previous commodities, that valuable gold and also silver, of which some banks eventually did not have actually the quantities needed, and rippled right into a additional devaluation in file currency, hence causing in part, the scare that would certainly ensue in 1837
.Note: The first document currency backed by the U.S. Treasury did not exist till 1861. Yes, there was Revolutionary battle currency, recognized as Continentals, yet that ceased to have any type of value by 1781. Today"s currency, dollar bills in $1-$100 dollar denominations, is known as commonwealth Reserve notes, published by the bureau of Engraving and also Printing, a U.S. Treasury department. United says coins were an initial minted in 1792.
Reaction come the executive OrderWhen connected to the Senate on December 14, 1836, members in opposition, including Daniel Webster, Senator indigenous Massachusetts and also former head the the Senate Finance Committee, started to formulate resolutions for its elimination through the beginning of a lengthy speech around his disagreement with the executive, management Order. Regardless of this speech, the Specie Circular would not be repealed through a joint resolution of congress until may 21, 1838.Webster top top December 21, 1936 in Senate dispute - "Mr. President : The strength of disposing of this important subject is in the hand of gentlemen, both here and elsewhere, who space not likely to be affected by any kind of opinions that mine. I have actually no motive, therefore, for addressing the Senate, however to discharge a publicly duty, and to fulfil the expectation of those who look to me because that opposition, even if it is availing or unavailing, to whatever I believe to be illegal or injurious to the public interests. In both these respects, the Treasury stimulate of the llth that July appears to me objectionable. I think it no warranted through law, and I think it also virtually prejudicial. I think it has contributed not a little to the pecuniary obstacles under i beg your pardon the whole nation has been, and still is, laboring; and that its direct effect on one particular part of the country is still much more decidedly and severely unfavorable..."Most members of Jackson"s very own cabinet did not agree through the executive Order.
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Text that Specie ActCircular native the Treasury the Gold and also Silver only Be received in Payment for the public LandsTreasury Department, July 11, 1836In repercussion of complaints which have actually been do of frauds speculations, and monopolies, in the purchase of the public lands, and the assist which is claimed to be offered to impact these objects by excessive bank credits, and also dangerous if not partial facilities, through bank drafts and also bank deposits, and the general evil influence likely, to an outcome to the public interests, and also especially the safety of the good amount of money in the Treasury, and the sound problem of the currency of the country, indigenous the more exchange of the nationwide domain in this manner, and also chiefly for bank credits and record money, the chairman of the United states has offered directions, and also you space hereby instructed, ~ the 15th day of respectable next, to obtain payment of the general public lands nothing other than what is command by the existing laws, viz.: gold and silver, and also in the proper cases, Virginia land scrip; provided that, it spins the 15th of December next, the same indulgences heretofore extended regarding the type of money received may be continued for any type of quantity of land no exceeding 320 acres to every purchaser that is an actual settler, or bonafide resides in the State whereby the sales are made.In order to insure the faithful execution of these instructions, every receiver room strictly prohibited from accepting because that land sold, and draft, certificate, or other proof of money or deposit, though for specie, uneven signed by the Treasurer the the united States, in conformity to the act of April 24, 1820. And also each of those officers is compelled to annex to his monthly return to this department, the quantity of gold and of silver respectively, and also the bill got under the foregoing exception; and also each deposit financial institution is required to annex to every certificate provided upon a deposit of money, the proportions that it in reality paid in gold, in silver, and in bank-notes. All former instructions ~ above this subjects, except as now modified, will be considered as staying in complete force.The primary objects that the President, in adopting this measure, being to repress alleged frauds, and also to withhold any countenance or framework in the strength of the government from the monopoly of the public lands in the hand of speculators and also capitalists, to the injury of the actual settlers in the new States, and of emigrants in find of new homes, as well as to discourage the ruinous expansion of bank issues and bank credits, by which those results are generally supposed to it is in promoted, your utmost vigilance is required, and also relied on, to lug this bespeak into finish execution.Levi Woodbury, Secretary of the TreasuryImage above: Cartoon drawing titled "Who"ll have the Specie," which spoke of worry of hard currency in the unified States and also England, 1837, Henry R. Robinson. Courtesy Library of Congress. Image below: Lithograph of the scare of 1837, Specie Claws, 1838/9, Henry Dacre and Henry R. Robinson. Courtesy Library of Congress. Information Source: Infobase Learning; Ohio background Central; "Andrew Jackson, Banks, the panic of 1837," Lehrmaninstitute.org; Wikipedia Commons; Library of Congress; college of California; Britannica.com; commonwealth Reserve Bank.