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Show CASH SALES, 1820-1840 175 sufficient to reimburse" the government for the cost of survey and management. At the appropriate time the Federal machinery of management and sale should be withdrawn and the land turned over to the states. In his veto of the distribution bill of 1833 Jackson had recommended that the public lands should be reduced in price and graduated according to the length of time they had been open to sale and after a number of years the remaining lands should be ceded to the states. Few Presidents have taken as strong an agrarian position as Jackson. He was sympathetic to the West's position concerning cession and graduation, yet he said nothing about speculation until his last years in office. Jackson, Chief Justice Taney, and Levi Woodbury, Secretary of the Treasury, became alarmed at the way speculators were pyramiding their investments in public lands, borrowing from local banks by giving mortgages on undeveloped property valued at a high level, buying additional land and borrowing on that to buy still more. The only way to stop the mushrooming growth of speculation, they decided, was to order the receivers of the land offices to accept nothing but specie for lands after August 15. On July 11, 1836, such an order was issued stating that the action was taken "In consequence of complaints ... of frauds, speculations, and monopolies, in the purchase of the public lands, and the aid which is ... given to effect these objects by excessive bank credits . . . ." Actual settlers were given until December 15 to enter as much as 320 acres with paper currency. The Specie Circular reiterated in its final paragraph that the action was taken "to repress alleged frauds, and to withhold any countenance of facilities in the power of the Government from the monopoly of the public lands in the hands of speculators and capitalists, to the injury of the actual settlers in the new States, and of emigrants in search of new homes, as well as to discourage the ruinous extension of bank issues, and bank credits, by which those results are generally supposed to be pro- moted . . . ."79 In December, Jackson attempted to summarize the results of the circular, saying that it had checked the unsound and dangerous activities of the western banks, it "cut off the means of speculation and retarded its progress in monopolizing the most valuable of the public lands. It has tended to save the new States from a nonresident proprietorship, one of the greatest obstacles to the advancement of a new country and the prosperity of an old one. It has tended to keep open the public lands for entry by emigrants at Government prices instead of their being compelled to purchase of speculators at double or triple prices.'"*0 End of an Era of Expansion and Credit One may say that the issue of the Specie Circular, or some similar action by the government, to curb the tremendous increase in the quantity of paper money in circulation and its use to purchase public lands for speculation was long overdue, that the circular did sharply reduce though by no means end large scale buying, and that by slowing down land entries by capitalists it gave settlers additional time to select land. But the action came late, millions of acres had been acquired by land companies and individuals for which there was to be no market for years at the base price plus the profit the investor anticipated. Much of the land became tax delinquent, not contributing its share to the development and maintenance of roads and other public improvements; much was taken up by squatters who put the most meager improvements on the land; trouble developed over the ownership of the improvements and such areas acquired an unfavorable reputation among incoming immigrants. The Panic of 1837 and the secondary letdown of 1839 brought the era of expansion and inflated credit to an abrupt close, slowed down 79 Commager (ed.), Documents of American History, p. 283. 80 Commager, Documents, p. 284. |
