by
Taylor.

The administration of Van Buren was one of the most unpopular we have
ever had, and through no fault of his. A great deal of the prosperity of
Jackson's term was superficial. He had been despotic, as shown in his
removal of the United States Bank deposits and the issue of the specie
circular of 1836. Confusion ensued in business, and an era of wild
speculation followed a distribution of the surplus in the treasury among
the States. The credit system took the place of the cash system, banks
sprang up like mushrooms, and an immense amount of irredeemable money
was put in circulation.

[Illustration: MARTIN VAN BUREN.

(1782-1862.) One term, 1837-1841.]

These institutions were known as "wild-cat banks," and their method of
defrauding the public was as follows: They bought several hundred
thousands of cheap bills which, having cost them practically nothing,
they used in offering higher prices for public lands than others could
pay in gold and silver. They trusted to chance that their bills would
not soon come back for redemption, but if they did so, the banks
"failed" and the holders of the notes lost every dollar.

The fraud was a deliberate one, but the establishment of the national
banking law since then renders a repetition of the swindle impossible.

THE PANIC OF 1837.

Van Buren was hardly inaugurated when the panic of 1837 burst upon the
country. The banks were forced to suspend specie payment, many failed,
and mercantile houses that had weathered other financial storms toppled
over like tenpins. In two months the failures in New York and New
Orleans amounted to $150,000,000. Early in May, a deputation of New York
merchants and bankers called upon the President and asked him to put off
the collection of duties on imported goods, to rescind the specie
circular, and convene Congress in the hope of devising measures for
relief. All that the President consented to do was to defer the
collection of duties. Immediately the banks in New York suspended specie
payments, and their example was followed by others throughout the
country. The New York Legislature then authorized the suspension of
specie payments for a year. This left the national government without
the means of paying its own obligations (since no banks would return its
deposits in specie) except by using the third installment of the surplus
revenue that had been promised to the States.

The country was threatened with financial ruin, and