of the government. In order to check them, it issued, on the 11th of July, 1836, the famous "Specie Circular," which required all payments for lands to be made in specie. This circular had little effect so long as the Banks continued to pay coin, but was one of the potent causes in producing the catastrophe which was already near at hand.1

The sales of land and the excessive importations of foreign merchandise increased the revenues of government to an extraordinary degree, although the rates of imposts had been largely reduced in 1832, to induce South Carolina to recede from her threats of nullification, or as a concession for receding from them. The result of this movement was a complete victory on her part. Her grievance was the tariff; to redress which she threatened to draw the sword. Government, instead of enforcing obedience, yielded to her demands, setting the example which proved so fatal when the next great crisis

From the excess of revenues, derived chiefly from the sale of lands, government found itself in possession of an enormous sum for which it had no use. The public debt had been paid. It was against the ideas and genius of the people to allow large sums to remain idle in the Treasury. These arose chiefly from property belonging to the whole nation. They should be restored to its rightful owners. An Act was accordingly passed, in June, 1836, providing that, after deducting therefrom the sum of $5,000,000, the money that should be found in the Treasury of the United States on the first day of January, 1837, should be deposited with the several States, in ratio to the number of their Senators and Representatives in

1 Statement showing the Number of Acres of Public Lands sold, and the Amounts received therefor, each Year, from 1829 to 1847, inclusive.

Congress. The money was nominally deposited for safekeeping, to be returned whenever it was wanted to defray the expenses of the general government, although no one at the time supposed a dollar of it would ever be returned. The amount to be deposited was ascertained to be $37,468,859. The deposits were to be made in four equal instalments, the first on Jan. 1, the second on April 1, the third on June 1, and the last on Oct. 1, 1837. They were all to be made in specie, or its equivalent; and to be paid from the reserves of the deposit Banks, or by the calling in of loans. This Act helped to complete the work begun by the Specie Circular. The Banks were now placed between two fires, one from speculators in the public lands, the other from the States which were to have their proceeds. The demands of both were to be paid in coin. As the deposits received by the States were largely distributed direct to the people, per capita, the money paid them was for a long time wholly taken out of the channels of commerce and trade. By desperate efforts, the Banks paid the first two instalments, amounting to $18,735,430. They were by this time exposed to calls from another quarter, the demands of the foreign trade. The imports for 1836 exceeded the exports by $61,314,975. According to the Economists, the nation was all the richer by this amount. Foreigners, unfortunately, found themselves all the poorer by it, and demanded something in return, which the Banks were called upon to provide. The result was, that by the time the second instalment of the public revenues was paid, the means of the Banks were so thoroughly exhausted that, in view of the third instalment which was soon due, nothing was left to those of the city of New York, upon whom the whole brunt fell, but to suspend specie payments; which they did on the 10th of May, 1837. All the other Banks in the country followed their example.

As the Banks of the State of New York were the first to suspend, they were, with those of the New England States, the first to resume. As their suspension was a violation of their charters, the legislature relieved them of the penalty by allowing them a year for this purpose. They so diligently improved their time, that they found no difficulty in resuming within the period prescribed. The Banks of New Eng

land resumed at the same time (May 10, 1838). Those of New Jersey, Pennsylvania, and the States to the South and West, followed their example later in the season; the United States Bank of the State of Pennsylvania leading the way, by resuming on Aug. 13. Events showed, however, that the resumption of all except those of New York and New England was premature, as they all suspended again in October, 1839, -the Bank of Pennsylvania again leading the way. This Bank resumed, for a short time, early in 1841. Those of New Jersey, Pennsylvania, and the Southern and Western States, resumed gradually, without concert, as they could provide the means. It was not till the beginning of 1843 that the Banks of the country might be said to be fairly upon a specie basis. This was not accomplished, however, until their liabilities were reduced considerably below what those of the Banks were in 1830, thirteen years before! This fact shows most strikingly the degree of exhaustion to which the country was reduced. The note circulation of the Banks on the first of January, 1843, equalled only $58,563,608; their deposits, $56,168,628: making a total of $114,732,236, against an aggregate of $276,583,070 in 1836, $170,506,556 in 1833, and $116,883,826 in 1830, when General Jackson began his famous experiments for the reformation of the currency. Had the rate of increase of the circulation from 1820 to 1830 been maintained from 1830 to 1843, the total at the last date would have equalled $197,761,749. There can be no doubt that the rate should have been far greater from 1830 to 1843 than from 1820 to 1830. Had the currency not been interfered with, the amount outstanding Jan. 1, 1843, including deposits, must have been $250,000,000,- an amount more than twice greater than that actually in circulation, and the whole of it the equivalent of coin. What a prodigious perturbation and loss must have resulted from the reduction of the currency, from $276,583,070 to $114,732,236, in the short period of six years! Thousands of millions would not have sufficed to make it good. The condition of the foreign commerce of the country reflected, in a striking degree, that of its domestic industries and trade. Its imports in 1836 equalled $189,980,035. In 1843, the year after the Banks finally resumed, they equalled only $86,333,398: the reduction in this period being $103,646,637, or considerably more than onehalf. The imports for the decade ending with 1839, during

which General Jackson's experiments were going on and the Banks were under suspension, equalled $1,196,410,483; the exports, $1,034,105,475: the excess of exports equalling in value $162,305,008. In the next decade, which was that of the recovery from Jackson's experiments and the disasters which followed, the imports equalled $1,218,341,575; the exports, $1,266,881,619: the excess of exports over imports for this decade equalling $48,540,044. At the close of the last decade, the nation was better off, so far as its foreign commerce was concerned, than it was at the close of the previous one, by $210,845,052! We know that the Economists will assert that it was the worse off by this amount, for the reason that, during the first decade, we got from foreigners merchandise having a value of $162,305,008 greater than we sent them (the difference was our profit); while, during the second decade, we sent them merchandise having a value of $48,540,044 greater than that we received in exchange from them.1

When General Jackson came to the Presidency, the currency of the country, as well as its industries and trade, was in an eminently sound and healthy condition. Its paper or sym

1 Statement showing the amount of Loans and Discounts, Note Circulation, and Deposits of the Banks, the amount of Imports and Exports of the United States, from 1833 to 1847, inclusive.

1833 $324,119,499 $94,839,570 $75,666,986 $108,118,311 1834 365,163,834 103,692,445 83,081,365

$90,140,133

126,521,332

104,336,973

140,897,742 121,693,577

84,691,184

140,989,217 117,419,376

1838

90,240,146

113,717,404 108,486,616 75,696,857 162,092,132 121,028,416

64,890,101

107,141,519 132,085,946

62,408,870

127,946,177 121,851,803

100,162,087

492,278,015 135,170,995 1839 462,896,523 106,968,572 1840 386,487,662 107,290,214 1841 323,957,569 83,734,011 1842 254,544,937 58,563,608 56,168,628 1843 264,905,814 75,167,646 84,550,785 1844 288,617,131 89,608,711 88,020,646 111,200,146 1845 312,114,404 105,552,427 96,913,070 117,254,564 114,654,606 1846 311,282,945 105,519,766 91,792,533 121,691,797 113,648,622 1847 844,476,542 128,506,091 103,226,157 154,998,928 158,648,622

104,691,534 86,338,398 112,461,973

108,435,035

The returns for the Banks made under date of January are those for the preceding years. In the above table, they are set down for the year to which they relate, in order to correspond with the years for which the imports and exports are given.

bolic money equalled about $9 per head of its population. The ratio of the coin reserves of its Banks to their liabilities equalled nearly 20 per cent. During his administration, the number of the Banks was increased from 339 to 788. Their issues rose from $9 per head of population to $19 per head, while the coin reserves of the Banks fell from about 20 to about 13 per cent of their liabilities; the latter being the lowest point reached in the history of the Banks of the country. In assuming to reform the currency, for which he was about as competent as was Attila to write a treatise upon Roman Law, or a critique upon Greek Art, he erected one of the most stupendous, and at the same time one of the most rotten and unsubstantial systems of paper money that the world has yet seen; upon which, as his perfect work, only two months before its fall, which was to involve a nation in ruin, he pronounced his benediction; craving that, as a faithful public servant having accomplished the mission assigned him, he might now be allowed to pass on in peace to his final rest. After the explosion, eight long years were required to restore the condition of the country to the financial soundness, but by no means to the degree of prosperity, in which he found it. Before specie payment could be wholly resumed, the currency, which when he became President equalled $9 per head of population, had to be reduced to $4.50 per head. In a period of profound peace, he brought upon the country all the waste incident to a prolonged war; and still greater evils in setting the first example of prostituting the patronage of government as the reward of political partisanship. The nation has long since recovered from the material injury inflicted upon it, but it has as yet made very little progress in restoring the standard of political purity and decorum, which had been maintained from the formation of the government down to his accession to the Presidency.1

1 "From his home in Tennessee," says Bancroft, "Jackson came to the Presidency, resolved to lift American legislation out of the forms of English legislation, and to place our laws on the currency in harmony with the principles of the Republic. He came to the Presidency of the United States determined to deliver the government from the Bank of the United States, and to restore the regulation of exchanges to the rightful depository of that power, -the commerce of the country."* No doubt, Jackson came, resolved to lift American legislation out of the forms of English legislation; and he did it most effectually, by substi

* Bancroft's Miscellaneous Works (Eulogy on General Jackson), p. 471.