fact, however, produced a wild speculation. The banks furnished credit, not capital, and being restrained by usury laws from exerting through the rate of discount the proper check upon an inflated or speculative market they embarked with the business community on a course where all landmarks were soon lost.
No sooner, however, was this condition of the commercial and banking community well established than a new shock was given by another political interference. The administration had now advanced to the point of desiring to establish a specie currency for the country. The object was laudable and the means taken were proper, but, following as they did in the train of the events already mentioned, they produced new confusion. In 1836 various acts were passed to bring about a specie currency, and in July of that year the Secretary of the Treasury ordered the receivers of public money to take only gold and silver for lands. The circumstances warranted this order. The sales of lands had risen from two or three to twenty-four million dollars in a year, and the amount was paid in the notes of "banks"[1] which deserved no credit. If the nation was not to be swindled out of the lands the measure was necessary. It then became necessary for the purchasers of land to carry specie to the West and vast amounts of it accumulated in the offices of the receivers, or were transferred at great trouble and expense to deposit banks. The specie was obtained from the eastern banks, and inasmuch as the whole existing system had pushed them to the utmost limit of expansion, these demands for specie were embarrassing. Two points here deserve notice. It is strange to see what a superstition about "specie" had taken
- ↑ Some counterfeiters were arrested at New York in a garret where they had $20,000 in notes of the "Ottawa Bank" and $800 in specie. They were very indignant — said they were a "bank" and were printing their notes at New York for economy. They came so nearly within the definition of a "bank" current at this time that they escaped on this plea.
