readily be traced to the causes above referred to. The public revenues,
being removed from the then Bank of the United States, under an order of
a late President, were placed in selected State banks, which, actuated
by the double motive of conciliating the Government and augmenting their
profits to the greatest possible extent, enlarged extravagantly their
discounts, thus enabling all other existing banks to do the same; large
dividends were declared, which, stimulating the cupidity of capitalists,
caused a rush to be made to the legislatures of the respective States
for similar acts of incorporation, which by many of the States, under a
temporary infatuation, were readily granted, and thus the augmentation
of the circulating medium, consisting almost exclusively of paper,
produced a most fatal delusion. An illustration derived from the land
sales of the period alluded to will serve best to show the effect of the
whole system. The average sales of the public lands for a period of ten
years prior to 1834 had not much exceeded $2,000,000 per annum. In 1834
they attained in round numbers to the amount of $6,000,000; in the
succeeding year of 1835 they reached $16,000,000, and the next year of
1836 they amounted to the enormous sum of $25,000,000, thus crowding
into the short space of three years upward of twenty-three years'
purchase of the public domain. So apparent had become the necessity of
arresting this course of things that the executive department assumed
the highly questionable power of discriminating in the funds to be used
in payment by different classes of public debtors--a discrimination
which was doubtless designed to correct this most ruinous state of
things by the exaction of specie in all payments for the public lands,
but which could not at once arrest the tide which had so strongly set
in. Hence the demands for specie became unceasing, and corresponding
prostration rapidly ensued under the necessities created with the banks
to curtail their discounts and thereby to reduce their circulation.
I recur to these things with no disposition to censure preexisting