ed the ease with which
people could speculate. Jackson saw that unless something were done to
restrain this speculation, disaster would surely come. So he issued a
circular to the United States land officers. This circular was called
the Specie Circular, because in it the President forbade the land
officers to receive anything except gold and silver and certain
certificates in payment for the public lands.

[Illustration: A SETTLER'S CABIN.]

[Sidenote: Payment of the national debt. _McMaster_, 309-310.]

312. Payment of the Debt, 1837.--The national debt had now all been
paid. The government was collecting more money than it could use for
national purposes. And it was compelled to keep on collecting more money
than it could use, because the Compromise Tariff (p. 248) made it
impossible to reduce duties any faster than a certain amount each year.
No one dared to disturb the Compromise Tariff, because to do so would
bring on a most bitter political fight. The government had more money in
the "pet banks" than was really safe. It could not deposit more
with them.

[Sidenote: Distribution of the surplus.]

[Sidenote: Van Buren elected President, 1836.]

313. Distribution of the Surplus, 1837.--A curious plan was now hit
upon. It was to loan the surplus revenues to the states in proportion to
their electoral votes. Three payments were made to the states. Then the
Panic of 1837 came, and the government had to borrow money to pay its
own necessary expenses. Before this occurred, however, Jackson was no
longer President. In his place was Martin Van Buren, his Secretary of
State, who had been chosen President in November, 1836.

CHAPTER 30

DEMOCRATS AND WHIGS, 1837-1844

[Sidenote: Causes of the Panic.]

[Sidenote: Hard times, 1837-39.]

314. The Panic of 1837.--The Panic was due directly to Jackson's
interference with the banks, to his Specie Circular, and to the
distribution of the surplus. It happened in this way. When the Specie
Circular was issued, people who held paper money at once went to the
banks to get gold and silver in exchange for it to pay for the lands
bought of the government. The government on its part drew out money from
the banks to pay the states their share of the surplus. The banks were
obliged to sell their property and to demand payment of money due them.
People who owed money to the banks were obliged to sell their property
to pay the banks. So every one wanted to sell, and few want