Public Claims, The “Specie Circular.”

Several outstanding claims of the United States for embargo damages and blockade captures against France, Spain, Portugal, Naples, and Denmark were settled at this time, and the payments were imported in specie in 1837, in furtherance of the plan for a specie currency. The coin was used in public payments, and in the first instalment of the distribution.

On the IIth July, 1836, the President issued the famous “Specie Circular,” by which he ordered agents for the sale of public lands to take in payment only specie. It was based on the old law of 1816, mentioned above, by which the Secretary was ordered to receive only specie, or Treasury notes, or notes of specie-paying banks. The notes of Eastern banks were carried West for a “good circulation,” and “coon-box banks” were set up in the Western States, which issued notes in easy loans to land speculators. These notes were practically inconvertible, and might be issued in any amount. The consequence was that the title to land was passing to speculators, and the Treasury was being filled with worthless paper. The best justification of this measure was, as Benton says, that ten millions of paper on its way to the Land Office was arrested by this circular.

When Congress met (December, 1836) it passed an act rescinding the specie circular, after a long and acrimonious debate. The bill was not sent to the President until the day before the close of the session, and he did not sign it, so that it did not become law. In the course of the debate there were abundant prophecies of coming trouble. Mr. Calhoun did not vote on the bill, and in giving his reasons said: “ He believed the state of the currency was almost incurably bad, so that it was very doubtful whether the highest skill and wisdom could restore it to soundness, and it was destined at no distant day to undergo an entire revolution. An explosion he considered inevitable, and so much the greater the longer it should be delayed.”