What were "petty banks?" These were state banks. That where Old Hickory put the surplus money thinking they would be safe within a government institution. Trouble is there seemed to be more criminals than honest bankers.
The broker's office sold specie while supplies of gold and silver lasted, which usually was gone before noon or night each day. Night and noon boxes were seen passing from the land office to the broker's office and the specie used to buy land was used twice each day. Crooks within pocketed 20 cents on each dollar every day. Money was taken from the pockets of those who could least afford it.
Those who bought land to make homesteads and farms often became disgusted and left without being refunded. Jackson wondered why they didn't storm the land and broker offices once they found out that criminal activity was afoot. Those who fell for the ruse did so out of respect for Old Hickory's presidency. They trusted Jackson' wisdom and theorized he knew what he was doing issuing the specie circular law.
Capitalists and speculators not the same. They reasoned the President was out of touch with their slipshod philosophy. For those who felt jilted raiding the brokerage wasn't a safe exploit despite the speculators who swooped in taking the land and holding it from settlement or improvements for five to eight years. Some paid taxes upon the land while those much poorer let it be sold for taxes.
The specie circulars shock waves caused the economy to shudder during March and April of 1837 during President Van Buren's earliest days in office. Jackson's foresight warned Van Buren not to rescind the specie circulation order, because many would try to overturn that ruling. It was tough for Van Buren to let the law continue, but the banks illegally suspended specie payment not the government. In doing so the mercantile businesses failed and the true 'Panic of 1837' took everyone by surprise. By September 1837 every avenue of trade suffered. During the last two months the failure rates for commerce in New York and New Orleans amounted to a 150 million dollar loss. The government was about to be defrauded out of millions of dollars.
Only then did a committee of businessmen from New York, Nashville and New Orleans convene in Washington to request that President Martin Van Buren rescind Jackson's 'specie circular' and call a special session of Congress.
Van Buren denied the request so he and Congress could have time to study all the pros and cons of Jackson's specie circular law, but within a short time he caved in to pressure demands of businessmen by the distress felt around the country. Jackson maintained he shouldn't have rescinded the order because the speculators were the greedy officials who didn't go through proper government policy to suspend specie payments. They instead tried to lay the blame on Jackson, but it was greedy bankers and speculators who caused the panic and Jackson was their scapegoat. Jackson in letters to Van Buren told him about twenty times not to give in to specie circular removal.
When Congress reconvened in late September from summer recess several measures of relief were brought forward. A bill authorizing the issue Treasury Notes not to exceed 10 million dollars was passed as a temporary provision. It was brought before Congress as "The Independent Treasury Bill."
Provisions stated that public funds of the Nation were to be kept on deposit in a treasury to be established for that special purpose. President Van Buren with special friends argued that all surplus monies of the country would drift into the Independent Treasury and lodge there as a means of checking against the speculative mania still present. Extensive speculations couldn't be carried on without an abundance of currency.
Former President Andrew Jackson and current President Van Buren's contention was to separate the business of the United States from the general business of the country. With Jackson's issue of the specie circular he meant to help the country, but the shock waves were felt beyond its border - worldwide.
China and Japan today are the speculators thriving in America today and eventually if it isn't from terrorists America's economy will collapse under the weight of its own debts. It continually borrows, but doesn't repay even a portion of what is spent. President Jackson as I said was the ONLY president to have a zero national debt and still have a cash surplus. (continued)