everything else rose, the government price of public land remained the same, say $1.25 an acre. In the light of the gorgeous future, land thus appeared ridiculously cheap; there could be no more promising investment. The land bought by the speculator was paid for in bank-notes. These bank-notes went from the land office as public funds to the deposit banks. The public funds so deposited were largely lent out again to speculators, who used them in buying more lands. The money paid for these new lands went back again as public funds to the deposit banks, to be lent out again and to return in the same way. Thus the money went round and round in the same circle, carrying larger and larger quantities of public lands from the government to the speculators, the government receiving for the land in fact only bank credits. No wonder the land speculation grew beyond all bounds. In 1832 the receipts from the sale of the public lands had been $2,623,000; in 1834 they were $4,857,000; in 1835 they rose to $14,757,000, and in 1836 to the amazing figure of $24,877,000. And all this increase swelled the treasury surplus at the disposal of the deposit banks for the “accommodation of individuals.”
No sooner was a purchase made than the land, bought at $1.25 an acre, was estimated to be worth six, eight, ten times as much. The more a speculator had bought, and the more money he had borrowed to pay for the lands, the richer he thought himself to be. People were intoxicated with their
