The Specie Circular was an executive order issued by U.S. President

President of the United States

The President of the United States of America is the head of state and head of government of the United States. The president leads the executive branch of the federal government and is the commander-in-chief of the United States Armed Forces....

 Andrew Jackson

Andrew Jackson

Andrew Jackson was the seventh President of the United States . Based in frontier Tennessee, Jackson was a politician and army general who defeated the Creek Indians at the Battle of Horseshoe Bend , and the British at the Battle of New Orleans...

 in 1836 and carried out by President Martin Van Buren

Martin Van Buren

Martin Van Buren was the eighth President of the United States . Before his presidency, he was the eighth Vice President and the tenth Secretary of State, under Andrew Jackson ....

. It required payment for government land to be in gold

Gold

Gold is a chemical element with the symbol Au and an atomic number of 79. Gold is a dense, soft, shiny, malleable and ductile metal. Pure gold has a bright yellow color and luster traditionally considered attractive, which it maintains without oxidizing in air or water. Chemically, gold is a...

 and silver

Silver

Silver is a metallic chemical element with the chemical symbol Ag and atomic number 47. A soft, white, lustrous transition metal, it has the highest electrical conductivity of any element and the highest thermal conductivity of any metal...

.

History

The Act was a reaction to the growing concerns about excessive speculations of land after the Indian removal

Indian Removal

Indian removal was a nineteenth century policy of the government of the United States to relocate Native American tribes living east of the Mississippi River to lands west of the river...

, which was mostly done with soft currency. The sale of public lands increased five times between 1834 and 1836. Speculators paid for these purchases with depreciating paper money. While government law already demanded that land purchases be completed with specie

Coin

A coin is a piece of hard material that is standardized in weight, is produced in large quantities in order to facilitate trade, and primarily can be used as a legal tender token for commerce in the designated country, region, or territory....

 or paper notes from specie-backed banks, a large portion of buyers used paper money from state banks not backed by hard money.

Executive order

On July 11, 1836, Jackson ordered Secretary of the Treasury Levi Woodbury

Levi Woodbury

Levi Woodbury was an Associate Justice of the Supreme Court of the United States, a U.S. Senator, Governor of New Hampshire and cabinet member in three administrations. He was the first Justice to have attended law school....

 to issue the Specie Circular. After August 15, the government refused to take anything but gold and silver specie in exchange for public lands. It did make a special exception to also accept certain types of Virginia scrip

Scrip

Scrip is an American term for any substitute for currency which is not legal tender and is often a form of credit. Scrips were created as company payment of employees and also as a means of payment in times where regular money is unavailable, such as remote coal towns, military bases, ships on long...

. The executive order did allow for legitimate settlers (non-speculators) to use paper until December.

Consequences

Because the order was one of Jackson's last acts in office, most of its consequences occurred during and were attributed to the Presidency of Martin van Buren

Martin Van Buren

Martin Van Buren was the eighth President of the United States . Before his presidency, he was the eighth Vice President and the tenth Secretary of State, under Andrew Jackson ....

. The devaluation of paper currency only increased with Jackson's proclamation. This sent inflation and prices upwards. Many at the time blamed the Specie Circular for the rise in prices and the following Panic of 1837

Panic of 1837

The Panic of 1837 was a financial crisis or market correction in the United States built on a speculative fever. The end of the Second Bank of the United States had produced a period of runaway inflation, but on May 10, 1837 in New York City, every bank began to accept payment only in specie ,...

. Cries of "rescind the circular!" went up and former President Jackson sent word to Van Buren asking him not to rescind the act. Jackson believed that it had to be given enough time to work. Lobbying efforts, especially by bankers, increased in Washington in an attempt to revoke the Specie Circular. Others, like Nicholas Biddle

Nicholas Biddle (banker)

Nicholas Biddle was an American financier who served as the president of the Second Bank of the United States.-Ancestry and early life:...

, believed that Jackson's defeat of the Second Bank of the United States

Second Bank of the United States

The Second Bank of the United States was chartered in 1816, five years after the First Bank of the United States lost its own charter. The Second Bank of the United States was initially headquartered in Carpenters' Hall, Philadelphia, the same as the First Bank, and had branches throughout the...

 was directly responsible for the irresponsible creation of paper money by the state banks which had precipitated this crisis.

Democratic split

The Democratic party split in two ways regarding the order. Some, like Thomas Hart Benton

Thomas Hart Benton (senator)

Thomas Hart Benton , nicknamed "Old Bullion", was a U.S. Senator from Missouri and a staunch advocate of westward expansion of the United States. He served in the Senate from 1821 to 1851, becoming the first member of that body to serve five terms...

, supported the use of sound money. The Locofoco

Locofocos

The Locofocos were a radical faction of the Democratic Party that existed from 1835 until the mid-1840s.  The faction was originally named the Equal Rights Party, and was created in New York City as a protest against that city’s regular Democratic organization .  It contained a mixture of...

 wing of the party also agreed with Benton. Senators Nathaniel P. Tallmadge

Nathaniel P. Tallmadge

Nathaniel Pitcher Tallmadge was an American lawyer and politician. He was a U.S. Senator from New York and Governor of the Wisconsin Territory.-Early life:Tallmadge graduated from Union College in 1815...

 and William C. Rives supported the other side of the party, in favor of paper money. In the United States House of Representatives

United States House of Representatives

The United States House of Representatives is one of the two Houses of the United States Congress, the bicameral legislature which also includes the Senate.The composition and powers of the House are established in Article One of the Constitution...

, John Bell

John Bell (Tennessee politician)

John Bell was a U.S. politician, attorney, and plantation owner. A wealthy slaveholder from Tennessee, Bell served in the United States Congress in both the House of Representatives and Senate. He began his career as a Democrat, he eventually fell out with Andrew Jackson and became a Whig...

 even challenged his own party member, James K. Polk

James K. Polk

James Knox Polk was the 11th President of the United States . Polk was born in Mecklenburg County, North Carolina. He later lived in and represented Tennessee. A Democrat, Polk served as the 17th Speaker of the House of Representatives and the 12th Governor of Tennessee...

, for his position as Speaker of the House of Representatives

Speaker of the House of Representatives

-National governments:* Speaker of the House of Representatives of Antigua and Barbuda* Speaker of the Australian House of Representatives* Speaker of the House of Representatives of Belize* Speaker of the House of Representatives...

over the issue.