oney derived from the sale of land
distributed. But at last it was decided to take all the surplus the
government had on January 1, 1837, subtract $5,000,000 from it, and
divide the rest by the number of senators and representatives in
Congress, and give each state as many parts as it had senators and
representatives[1].

[Footnote 1: One state, New York, was to receive $4,000,000, three
states over $2,000,000, six over $1,000,000, and eight over $500,000]

On January 1, 1837, the surplus was $42,468,000, which, after
subtracting the $5,000,000, left $37,468,000 to be distributed. It was
to be paid in four installments[1]; but only three of them were ever
paid, for, when October 1, 1837, came, the whole country was suffering
from a panic[2].

[Footnote 1: The days of payment were Jan. 1, April 1, July 1, and Oct.
1, 1837]

[Footnote 2: Bourne's _History of the Surplus Revenue of 1837_]

%345. The Panic of 1837.%--Now, when the banks in which the
government surplus was kept were suddenly called on to give it up in
order that it might be distributed among the states, (as they had
loaned this surplus) they were all forced to call it in. More than that,
they would make no new loans. This made credit hard to get. As a
consequence, mills and factories shut down, all buying and selling
stopped, and thousands of workmen were thrown out of employment. As
everybody wanted money, it followed that houses, lands, property of
every sort, was offered for sale at ridiculously low prices. But there
were no buyers. In New York the distress was so great that bread riots
occurred. The merchants, unable to pay their debts, began to fail, and
to make matters worse the banks all over the country suspended specie
payment; that is, refused to give gold and silver in exchange for their
paper bills. Then the panic set in, and for a while the people, the
states, and the government were bankrupt[1].

[Footnote 1: Shepard's _Van Buren_, Chap. 8.]

%346. Election of Martin Van Buren; Eighth President.%--In accordance
with the well-established custom that no President shall have more than
two terms, Jackson [Illustration: Martin Van Buren] would not accept a
renomination in 1836. So the Democratic national convention nominated
Martin Van Buren and R.M. Johnson. The Whigs, as the National
Republicans called themselves after 1834, did not hold a national
nominating convention, but agreed to support William Henry Harrison. Van
Buren was elected,