Railroad Building, Speculation.

To show the actual development which was in progress, it is sufficient to notice the number of miles of railroad built in these years. Railroad building was not a subject of unhealthy speculation, and the crisis did not, as it appears, stop an unnatural development in this respect, but rather checked a species of enterprise which, without it, might have gone on to produce great and healthy prosperity.

The object on which speculation fixed especially was real estate, either in the Eastern cities or the Western States. The improved communication with the East by the Erie Canal (built in 1817–1825) had done wonders for the development of the territory bordering on the lakes. The advance in values there had been of the kind to produce a speculative mania. In 1835 the canal was enlarged and its benefits increased in a far greater ratio, but the speculative mania outstripped all reason. It did not follow, from any of the facts of the case, that mere speculative holders in the East could realize quick and solid gains from Western lands. The advantage of improved communication fell suddenly on those already settled in the West, and promised sure and steady development to those who should settle there and wait, but nothing more.

The progress of this mania is best shown by the returns of sales of public lands. (Sums in millions.)

City real estate, especially in New York and some of the Southern cities, was also a favorite subject of speculation. New York gained by the canal, becoming from that time the emporium of the country, but, according to a table given by Grosvenor, New York city real estate was assessed at 309,000,000 in 1836, and it did not again reach 300,000,000 until 1851.

The advance in the Southern cities was due to the advance in cotton, and that had its causes in England.