- Specie Circular
The Specie Circular (Coinage Act) was an executive order issued by U.S. President
Andrew Jackson in1836 and carried out by PresidentMartin Van Buren . It required payment for government land to be ingold and silver currency .History
The Act was a reaction to the growing concerns about excessive speculation of land after the
Indian removal , which was mostly done with "soft money." Jackson issued this order to protect the settlers who were forced to pay greatly inflated land prices with devaluedpaper currency . After Jackson refused to renew theSecond Bank of the United States , people who could not afford much paper money due to the fact that the US Treasury Department invested a lot of paper money in building railroads and canals began to purchase these new expensive lands by writing overbearing bank notes for these loans from state banks [http://www.u-s-history.com/pages/h967.html] . As a result, however, much paper money was instantly devalued. It also moved much of the specie (hard money) to the west to pay for land transactions at a time when eastern banks needed it.Specie was short in the East because the British government restricted specie transfer to the United States, which contributed to thePanic of 1837 . This shortage led to a fall in cotton prices, a collateral in most American loans, which required specie. These loans became harder to acquire, cotton became devalued, and the U.S. economy suffered.
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