The Specie Circular Order
From land speculators to "hard-handed yeomen", the impact of the 1836 Specie Circular order on purchasing federal land was eye-opening for one land office clerk. In January 1837, the chief clerk of the Kalamazoo land office wrote that his office was now "thronged" with men from the far East who came to settle and work the land. He recalled how a Massachusetts bank president had once bought “miles of the public domain” with banknotes he filled in himself. The clerk credited the change to Andrew Jackson’s 1836 Specie Circular, which required buyers of federal land to pay in gold or silver coin.
Van Buren's Arguments for Coin
Congress had effectively ended the coin requirement in 1838, and land offices again accepted notes from sound banks but it did not stop the "hard-handed yeomen" from voluntarily using gold and silver to buy federal land. In his December 1839 annual address, Martin Van Buren told Congress that “more than a moiety of these payments has been voluntarily made in specie.” That is buyers had still paid more than half in coin despite banknotes being accepted again. Treasury Secretary Levi Woodbury reported a similar pattern the next day. Levi reported on the bank suspensions of 1839, and showed why it mattered what the Treasury took in. When banks suspended redemption that fall, nearly half the funds on hand at land offices were in coin, while customs houses held mostly banknotes. As Woodbury reported, federal offices had accepted notes from banks that were still exchanging them for gold and silver. When some of those banks stopped, federal payments were delayed. Van Buren wanted the government to collect its revenue and pay its bills in gold and silver coin, known as specie. Public land sales showed why he thought the change was practical. Even with banknotes still accepted, more than half the money paid for federal land had come in as coin.
But how much coin would the Treasury need? Customs duties were where the change would matter most. They brought in most of the federal government’s revenue, and the New York customs collector alone took in about $15 million that year. The money moved quickly, though. In a typical week, the collector held less than half a million dollars for the Treasury to draw on. Letting importers pay duties with Treasury drafts, the government’s equivalent of checks, would further reduce the amount of coin that had to change hands. Van Buren estimated that even an immediate switch would require only $4 million to $5 million in coin at any one time, out of an estimated $85 million in the country.
Van Buren argued that gold and silver would circulate wherever people needed them. In states that barred small banknotes, he said, people used coins in their place. Still, Van Buren understood there were risks. The one he took most seriously was that a large federal surplus could pull too much coin out of circulation and leave it sitting idle in Treasury vaults. He thought such a surplus was unlikely in the next few years, and Congress could act if one began to build.
Congress Acts
Congress adopted a gradual approach to silver and gold in the Independent Treasury Act, which Van Buren signed on July 4, 1840. Section 19 initially required one-quarter of customs duties, public land payments, and other federal dues to be collected in legal currency. That share would rise by another quarter each year until the government collected all such payments in gold and silver. Section 20 set the same deadline for federal disbursements to be made entirely in coin. Congress repealed the act in August 1841, before the transition was complete.
Here is the five-paragraph excerpt from Van Buren's 1839 State of the Union Address:
"I am aware that the danger of inconvenience to the public and unreasonable pressure upon sound banks have been urged as objections to requiring the payment of the revenue in gold and silver. These objections have been greatly exaggerated. From the best estimates we may safely fix the amount of specie in the country at $85,000,000, and the portion of that which would be employed at any one time in the receipts and disbursements of the Government, even if the proposed change were made at once, would not, it is now, after fuller investigation, believed exceed four or five millions. If the change were gradual, several years would elapse before that sum would be required, with annual opportunities in the meantime to alter the law should experience prove it to be oppressive or inconvenient. The portions of the community on whose business the change would immediately operate are comparatively small, nor is it believed that its effect would be in the least unjust or injurious to them.
In the payment of duties, which constitute by far the greater portion of the revenue, a very large proportion is derived from foreign commission houses and agents of foreign manufacturers, who sell the goods consigned to them generally at auction, and after paying the duties out of the avails remit the rest abroad in specie or its equivalent. That the amount of duties should in such cases be also retained in specie can hardly be made a matter of complaint. Our own importing merchants, by whom the residue of the duties is paid, are not only peculiarly interested in maintaining a sound currency, which the measure in question will especially promote, but are from the nature of their dealings best able to know when specie will be needed and to procure it with the least difficulty or sacrifice. Residing, too, almost universally in places where the revenue is received and where the drafts used by the Government for its disbursements must concentrate, they have every opportunity to obtain and use them in place of specie should it be for their interest or convenience. Of the number of these drafts and the facilities they may afford, as well as of the rapidity with which the public funds are drawn and disbursed, an idea may be formed from the fact that of nearly $20,000,000 paid to collectors and receivers during the present year the average amount in their hands at any one time has not exceeded a million and a half, and of the fifteen millions received by the collector of New York alone during the present year the average amount held by him subject to draft during each week has been less than half a million.
The ease and safety of the operations of the Treasury in keeping the public money are promoted by the application of its own drafts to the public dues. The objection arising from having them too long outstanding might be obviated and they yet made to afford to merchants and banks holding them an equivalent for specie, and in that way greatly lessen the amount actually required. Still less inconvenience will attend the requirement of specie in purchases of public lands. Such purchases, except when made on speculation, are in general but single transactions, rarely repeated by the same person; and it is a fact that for the last year and a half, during which the notes of sound banks have been received, more than a moiety of these payments has been voluntarily made in specie, being a larger proportion than would have been required in three years under the graduation proposed.
It is, moreover, a principle than which none is better settled by experience that the supply of the precious metals will always be found adequate to the uses for which they are required. They abound in countries where no other currency is allowed. In our own States, where small notes are excluded, gold and silver supply their place. When driven to their hiding places by bank suspensions, a little firmness in the community soon restores them in a sufficient quantity for ordinary purposes. Postage and other public dues have been collected in coin without serious inconvenience even in States where a depreciated paper currency has existed for years, and this, with the aid of Treasury notes for a part of the time, was done without interruption during the suspension of 1837. At the present moment the receipts and disbursements of the Government are made in legal currency in the largest portion of the Union. No one suggests a departure from this rule, and if it can now be successfully carried out it will be surely attended with even less difficulty when bank notes are again redeemed in specie.
Indeed, I can not think that a serious objection would anywhere be raised to the receipt and payment of gold and silver in all public transactions were it not from an apprehension that a surplus in the Treasury might withdraw a large portion of it from circulation and lock it up unprofitably in the public vaults. It would not, in my opinion, be difficult to prevent such an inconvenience from occurring; but the authentic statements which I have already submitted to you in regard to the actual amount in the public Treasury at any one time during the period embraced in them and the little probability of a different state of the Treasury for at least some years to come seem to render it unnecessary to dwell upon it. Congress, moreover, as I have before observed, will in every year have an opportunity to guard against it should the occurrence of any circumstances lead us to apprehend injury from this source. Viewing the subject in all its aspects, I can not believe that any period will be more auspicious than the present for the adoption of all measures necessary to maintain the sanctity of our own engagements and to aid in securing to the community that abundant supply of the precious metals which adds so much to their prosperity and gives such increased stability to all their dealings."
References
Van Buren, Martin. “Third Annual Message.” 2 Dec. 1839. The American Presidency Project, University of California, Santa Barbara, https://www.presidency.ucsb.edu/documents/third-annual-message-4. Accessed 12 Oct. 2026.
“Extract” [Letter from the chief clerk of the Kalamazoo land office]. 10 Jan. 1837. Appendix to the Congressional Globe, 24th Cong., 2nd sess., Jan. 1837, p. 141. UNT Digital Library.
United States, Congress. “A Resolution Relating to the Public Revenue and Dues to the Government.” 31 May 1838. United States Statutes at Large, vol. 5, p. 310. Library of Congress.
United States, Congress. “An Act to Provide for the Collection, Safe Keeping, Transfer, and Disbursement of the Public Revenue.” 4 July 1840. United States Statutes at Large, vol. 5, ch. 41, p. 385, secs. 19–20. Wikisource.
United States, Congress. “An Act to Repeal the Act Entitled ‘An Act to Provide for the Collection, Safe-Keeping, Transfer, and Disbursement of the Public Revenue,’ and to Provide for the Punishment of Embezzlers of Public Money, and for Other Purposes.” 13 Aug. 1841. United States Statutes at Large, vol. 5, ch. 7. Wikisource.
Woodbury, Levi. “Circular from the Secretary of the Treasury to Receivers of Public Money and to the Deposit Banks.” 11 July 1836. The American Presidency Project, University of California, Santa Barbara. The American Presidency Project.
Woodbury, Levi. Report on the Finances. U.S. Department of the Treasury, 3 Dec. 1839, p. 251. FRASER, Federal Reserve Bank of St. Louis.
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