The
Specie Circular History for kids: Land Speculation and the Banks
One of the Important reasons for the 1836 Specie Circular
was the uncontrolled land speculation in the West.
Real estate speculation was
funded by increased availability of credit from the
Second Bank of the United
States and new, reckless frontier banks.
State banks were chartered for the express purpose of extending
credit to speculators. The number of banks
more than doubled between 1812 and
1819. The Banks were unregulated and began to issue
massive amounts of bank notes. The bank notes were not backed by
gold and silver. This led to the
Panic
of 1819.
The
Specie Circular History for kids: Land Speculation and the
Land
Acts
The Land Act of 1820 had reduced the minimum price for land to $1.25
per acre with a minimum purchase of 80 acres and a down-payment of
$100 in cash - nearly 3.5 million acres of land were purchased in
1820 alone. Millions more acres of lands were opened to settlers
moving to the west in the
1830
Indian Removal Act. The Land Act of 1832 reduced the reduced
minimum purchasable unit to 40 acres to encourage people to move
westwards. Land sales increased but not all of these land sales
reflected actual settlement. Wealthy land speculators purchased
massive areas of lands for resale to farmers and settlers.
Specie Circular for kids: Paper Money
The excessive land speculation resulted in the
enormous growth of paper money in circulation. Paper money lost its
value, each bank had different currency.
Specie Circular for kids: Andrew Jackson, the Bank War and the "Pet Banks"
When Andrew
Jackson was elected President he swore
to destroy the
Second Bank of the United States. Andrew Jackson's
Bank War began. This led to the
establishment of the
Pet Banks and also
the emergence of Wildcat Banks.
What was the Reason for the
Specie Circular?
Why was the
Specie Circular enacted? With the closure of the Second Bank of the
United States large deposits of government
money were deposited in the 'Pet Banks'. But there were problems.
Some of the managers of the "Pet Banks", tempted by the
large deposits of government money, began to lend money more freely. "Wildcat Banks" sprang up in the West where there was
extensive land speculation. Loans were made in the form of
paper money, without gold and silver to back them. President Jackson knew this
situation lead to
yet another financial disaster unless he took decisive action.
The
Specie Circular: Senator Thomas Hart Benton
Senator
Thomas Hart Benton was a supporter of Andrew Jackson who had played
a Important role during the Bank War. He had a firm belief in 'Hard
Money' (gold and silver) and was against the unregulated
availability of credit. Senator Benton had initiated the ratio of
silver to gold from 15:1 to 16:1 which had brought more gold into
circulation. He then submitted a resolution to Congress requiring
that the payment for public lands should be paid for in hard money
only. Congress defeated his resolution but Andrew Jackson loved the
idea as a firm believer in a specie (gold and silver) basis for
currency.
President Jackson issues the
Specie Circular (Coinage Act)
Andrew
Jackson decided to issue an Executive Order requiring that payment
for the purchase of public lands be made exclusively in gold or
silver - the Specie Circular. Senator Thomas Hart Benton was the
author of the Specie Circular and Jackson legalized the idea in an
executive order. The Specie Circular executive order was issued in
the form of a circular to the United States land officers. The Specie Circular
issued the instruction by President Jackson
forbidding the land officers to receive anything except gold and silver
and certain certificates in payment for the public lands. The Specie
Circular is therefore also referred to as the Coinage Act.
What was the Significance of the
Specie Circular?
The significance of the Specie Circular was that:
● The Specie
order effectively dried up credit and ended the reckless land
speculation
● The Specie
Order also precipitated the
Panic of 1837
● The next
President, Martin Van Buren, had to deal with the Panic of 1837
and the distribution
of the surplus government money
Specie Circular for
kids
The info about the
Specie Circular provides interesting facts and
important information about this important event that occured during the presidency of the 7th President of the United States of America.
Specie Circular for kids - President Andrew Jackson Video
The article on the
Specie Circular provides an overview of one of the Important issues of his presidential term in office. The following
Andrew Jackson video will
give you additional important facts and dates about the political events experienced by the 7th American President whose presidency spanned from March 4, 1829 to March 4, 1837.
Specie Circular
●
Interesting Facts about
Specie Circular for kids and schools
●
Key events
of the Specie Circular for kids
●
The Specie Circular, a Important
event in US history
●
Andrew Jackson Presidency from March 4, 1829 to March 4, 1837
●
Fast, fun, interesting
timeline
about Important events in the Specie Circular
● Specie Circular & Domestic
policies of President Andrew Jackson
● Andrew Jackson and
the Specie Circular for schools,
homework, kids and children |