The first installment of the treasury surplus, amounting to $9,367,000, due on January 1, 1837, was taken from the deposit banks amid great agony, and transferred to the several states; also the second, about April 1. But before the third fell due the general collapse came. First the influx of capital from England ceased. The speculation, which had prevailed there during the same period, was brought to an end by financial embarrassments in the autumn of 1836. Discounts went up and prices down. Some banks were compelled to wind up, and three large business houses, which had been heavily engaged with America, failed. English creditors called in their dues. The manufacturing industries, which, carried along by the general whirl, had produced beyond demand, had to reduce their operations, and the price of cotton fell more rapidly than it had risen. In August, 1836, it had been from 15 to 20 cents a pound; in May, 1837, it was from 8 to 12. The cotton houses in the South went down. Nine tenths of the merchants of Mobile suspended. New Orleans was in a state of financial anarchy. Tobacco shared the fate of cotton. The whole South was bankrupt. It became painfully apparent that the speculation in public lands had anticipated the possible progress of settlement by many years. The imagined values of great possessions in the West vanished into thin air. The names of the paper towns located in the wilderness sounded like ghastly jests. Fortunes in city lots disappeared
