CLAIMS AGAINST FRANCE SETTLED.

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and won the esteem of Washington; had been a member CHAP. of the House of Representatives, Secretary of State, Secretary of War, and Minister to France. President John 1836 Adams nominated him Chief Justice of the Supreme Court, over which for thirty-five years he presided "with native dignity and unpretending grace." His solidity of judgment, his reasoning powers, his acute and penetrating mind, were remarkable, and none the less striking were the purity of his Christian life and his simplicity of manner.

The maxim of foreign policy acted upon by the President was "to ask nothing but what was right, and to submit to nothing that was wrong." American merchants had claims, amounting to five millions of dollars, against the French government. They had remained unsettled for twenty years. These indemnities were for "unlawful seizures, captures, and destruction of vessels and cargoes," during the wars of Napoleon. The government of Louis Philippe acknowledged their justice, and by treaty engaged to pay them. But the Chamber of Deputies, at different times during three years, refused to appropriate the money. The President sent a message to Congress, recommending reprisals upon French property if the treaty was not complied with. The French Chambers took offence at the tone of the message, and although Congress had not acted upon its suggestions, they refused to pay the money unless the obnoxious proposal was withdrawn. This brought another message, in which the President reviewed the difficulties existing between the governments. Said he "Come what may, the explanation which France demands can never be accorded; and no armament (alluding to a French fleet then on our coast), however powerful and imposing, will, I trust, deter us from discharging the high duties which we owe to our constituents, to our national character, and to the world." He suggested to Congress to prohibit the entrance of

:

CHAP. French imports into our ports, and the interdiction of all commercial intercourse.

XLVIII.

1836.

At this time Great Britain offered her mediation. The offer was accepted by both parties. In the mean time the Chamber of Deputies appropriated the money to satisfy the claims and fulfil the treaty.

Equally successful was the President in arranging other difficulties of long standing; claims for similar seizures and spoliations against Spain, Naples and Denmark. Also treaties of commerce and friendship were negotiated with Russia, and the Ottoman Empire-the first American treaty with the latter power.

Two States, Arkansas and Michigan, were added to the Union; the original thirteen had now doubled.

After a spirited contest, Martin Van Buren, of New Nov. York, was elected President by the people, and Richard M. Johnson, of Kentucky, Vice-President, not by the electoral vote, but by the Senate.

General Jackson's administration will ever be memorable for its measures; and none the less for the custom then introduced, and unfortunately, with rare exceptions, still continued, of removing persons from office for political purposes, and filling their places with partisans.

The nation was greatly agitated by the conflicts growing out of the diversity of opinion on the policy of the President and his adherents. But energy and determination enabled him to carry his points in defiance of opposi tion and established usages.

CHAPTER XLIX.

VAN BUREN'S ADMINISTRATION.

Apparent Prosperity.-The Specie Circular.-The Surplus Funds.-Sus pension of Specie Payments.-Speculation.-Special Session of Con gress.--The Sub-Treasury.-State Indebtedness.

XLIX.

THE last year of Jackson's administration appeared to CHAP. be one of very great national prosperity. The public debt had been cancelled two years before, and there were 1837. nearly forty millions of dollars of surplus. This prosperity was fallacious in the extreme.

The State Banks, called in derision the "Pets," with whom the deposits had been placed, loaned money freely, with the expectation that they should continue to have the use of the public funds until they were called for by the Government. That time seemed to be distant, as its revenue was greater than its current expenses.

Other banks sprang into existence, until the number amounted, throughout the land, to seven hundred and fifty. These institutions had very little gold or silver in their vaults, as a means to redeem the notes with which they flooded the country, giving a fictitious value to every thing that was bought or sold. They rivalled each other in affording facilities for the wildest schemes of speculation.

Two

The public lands became an object of this speculation, until the sales amounted to millions in a month. acts the one of the late President; the other of Con

XLIX.

CHAP. gress-combined to hasten the crisis. President Jackson, in order to restrain the undue sales of the public lands, 1837. had issued, through the Treasury Department, an order known as the Specie Circular, requiring the collectors at the offices to receive only gold and silver in payments for land. Six months later, Congress passed a law to distribute among the States the government funds, on deposit in the banks. They were thus forced to call in their loans to meet this demand, while the Specie Circular arrested the circulation of their notes, and brought them

July,

1836.

May.

ack to their counters, to be exchanged for gold and silver. Within six months after this distribution was ordered, the business of the whole country was prostrated: all improvements ceased, and twenty thousand laboring men were, within a few weeks, thrown out of employment in New York City alone, where the failures amounted to one hundred millions of dollars, while those of New Orleans were as great in proportion, being twenty-seven millions. A few weeks later, the banks of New York City suspended specie payment; an example which the other banks of the country hastened to follow.

Previous to the suspension of payments, a large and respectable committee of merchants of New York visited Washington, to lay before the new President the state of the country. Similar representations went from almost every section of the land. The President denied the request of the committee to rescind the Specie Circular, but proposed to call a Special Session of Congress, on the first Monday of the following September.

The extent to which speculation raged seems almost fabulous. The compromise tariff had nearly run its course, and the duty arrived at its minimum; foreign merchandise was imported in unheard-of quantities, thus ruining domestic industry; internal improvements, because of the facility in obtaining loans, were projected to an extent almost without limit; the public lands were bought by

SPECULATION-THE GOVERNMENT EMBARRASSED.

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the millions of acres, and cities and villages were multi- CHAP. plied on paper by hundreds; and stranger still, the sites of these prospective cities, divided into lots, were fre- 1837. quently made the basis of money transactions.

A few months before, the General Government was free from debt, and had a surplus of forty millions. Now the surplus had been given to the States; the importers had neither gold nor silver to pay duties, and the Government itself was deprived of the means to defray its current expenses.

4.

When Congress assembled, the President made no Sept. suggestion as to the manner in which the commercial embarrassments of the country might be relieved, on the ground that the General Government was unauthorized by the Constitution to afford such relief. He was therefore in favor of the people taking care of themselves. The message contained, however, two recommendations; one the issue of Treasury notes, to relieve the Government's own embarrassments, the other an Independent Treasury for the public funds. The object of the latter was to avoid the liability of loss by depositing the public moneys in banks. These treasuries were to be located at suitable places; the sub-treasurers to be appointed by the President, and to give bonds for the proper fulfilment of their duties.

The measure was opposed, lest the withdrawal of so much gold and silver from circulation would injure commercial operations. The bill failed in the House, though it passed the Senate. Three years later it was established; the next year repealed-then re-enacted, five years after, and is still the law of the land.

The Legislatures of many of the States became imbued with the spirit of speculation, and as a means to obtain loans, issued State stocks to the amount of one hundred millions. This was done under the laudable pretext of developing their resources, by internal improvements.