There had already occurred in many quarters that misery which is borne by the humbler producers of wealth not for their own consumption, but simply for exchange, whose earnings are not increased to meet the inflation of prices upon which traders and speculators are accumulating apparent fortunes and spending them as if they were real. On February 14, 1837, several thousand people met in front of the City Hall in New York under a call of men whom the "Commercial Advertiser" described as "Jackson Jacobins." The call was headed: "Bread, meat, rent, fuel! Their prices must come down!" It invited the presence of "all friends of humanity determined to resist monopolists and extortionists." A very respectable meeting about high prices had been held two or three weeks before at the Broadway Tabernacle. The meeting in the City Hall Park, with a mixture of wisdom and folly, urged the prohibition of bank-notes under $100, and called for gold and silver; and then denounced landlords and dealers in provisions. The excitement of the meeting was followed by a riot, in which a great flour warehouse was gutted. The rioters were chiefly foreigners and few in number; nor were the promoters of the meeting involved in the riot. The military were called out; and Eli Hart & Co., the unfortunate flour merchants, issued a card pointing out with grim truth "that the destruction of the article cannot have a tendency to reduce the price."
The distribution of the treasury surplus to the States precipitated the crash. The first quarter's payment of $9,367,000 was made on January 1, 1837. There was disturbance in taking this large sum of money from the deposit banks. Loans had to be called in, and the accommodation to business men lessened for the time. There was speculative disturbance in the receipt of the moneys by the state depositories. There was apprehension for the next payment on April 1, which was accomplished with still greater disturbance, and after the crisis had begun. The calls for gold and silver, begun under the specie circular, and the disturbances caused by these distributions, were increased by financial pressure in England, whose money aids to America were but partly shown by the shipments of gold and silver already mentioned. The extravagance of living had been shown in foreign importations for consumption in luxury, to meet which there had gone varied promises to pay, and securities whose true value depended upon the true and not the apparent creation of wealth in America. Before the middle of March the money excitement at Manchester was great; and to the United States alone, it was then declared, attention was directed for larger remittances and for specie. The merchants of Liverpool about the same time sent a memorial to the chancellor of the exchequer saying "that the distress of the mercantile interest is intense beyond example, and that it is rapidly extending to all ranks and conditions of the community, so as to threaten irretrievable ruin in all directions, involving the prudent with the imprudent." The "London Times" on April 10, 1837, said that great distress and pressure had been produced in every branch of national industry, and that the calamity had never been exceeded.
The cry was quickly reëchoed from America. Commercial failures began in New York about April 1. By April 8 nearly one hundred failures had occurred in that city,—five of foreign and exchange brokers, thirty of dry-goods jobbers, sixteen of commission houses, twenty-eight of real-estate speculators, eight of stock brokers, and several others. Three days later the failures had reached one hundred and twenty-eight. Provisions, wages, rents, everything, as the "New York Herald" on that day announced, were coming down. Within a few days more the failures were too numerous to be specially noticed; and before the end of the month the rest of the country was in a like condition. The prostration in the newer cotton States was peculiarly complete. Their staple was now down to ten cents a pound; within a year it had been worth twenty. All other staples fell enormously in price.
Later in April the merchants of New York met. Instead of condemning their own folly, they resolved, in a silly fury, that the disaster was due to government interference with the business and commercial operations of the country by requiring land to be paid for in specie instead of paper, to its destruction of the Bank, and to its substitution of a metallic for a credit currency. A committee of fifty, including Thomas Denny, Henry Parish, Elisha Riggs, and many others whose names are still honored in New York, was appointed to remonstrate with the president. "What constitutional or legal justification," it was seriously demanded, "can Martin Van Buren offer to the people of the United States for having brought upon them all their present difficulties?" The continuance of the specie circular, they said, was more high-handed tyranny than that which had cost Charles I. his crown and his head. On May 3 the committee visited Washington and told the President that their real estate had depreciated forty millions, their stocks twenty millions, their immense amounts of merchandise in warehouses thirty per cent. They piteously said to him, "The noble city which we represent lies prostrate in despair, its credit blighted, its industry paralyzed, and without a hope beaming through the darkness, unless"—and here we might suppose they would have added, "unless Americans at once stop spending money which has not been earned, and repair the ruin by years of sensible industry and strict economy." But the conclusion of the merchants was that the darkness must continue unless relief came from Washington. It was unjust, they said, to attribute the evils to excessive development of mercantile enterprise; they flowed instead from "that unwise system which aimed at the substitution of a metallic for a paper currency." The error of their rulers "had produced a wider desolation than the pestilence which depopulated our streets, or the conflagration which laid them in ashes." In the opinion of these sapient gentlemen of business, it was the requirement that the United States, in selling Western lands to speculators, should be paid in real and not in nominal money, which had prostrated in despair the metropolis of the country. They asked for a withdrawal of the specie circular, for a suspension of government suits against importers on bonds given for duties, for an extra session of Congress to pass Clay's bill for the distribution of the land revenue among the States, and for the re-chartering of the Bank. Never did men out of their heads with fright propose more foolish attempts at relief than some of these. But the folly, as will be seen, seized statesmen of the widest experience as well as frenzied merchants. The President's answer was dignified, but "brief and explicit." To the insolent suggestion that Jackson's financial measures had been more destructive than fire or pestilence, he calmly reminded them that he had made fully known, before he was elected, his own approval of those measures; that knowing this the people had deliberately chosen him; and that he would still adhere to those measures. The specie circular should be neither repealed nor modified. Such indulgence in enforcing custom-house bonds would be allowed as the law permitted. The emergency did not, he thought, justify an extra session. Nicholas Biddle called on Van Buren; and many were disgusted that in the presence of this arch enemy the president remained "profoundly silent upon the great and interesting topics of the day."
Van Buren's resolution to face the storm without either the aid or the embarrassment of the early presence of Congress he was soon compelled to abandon. Within a few days of the return of the merchants to New York, that city sent the President an appalling reply. On May 10 its banks suspended payment of their notes in coin. A few days before some banks in lesser cities of the Southwest had stopped. On the day after the New York suspension, the banks of Philadelphia, Baltimore, Albany, Hartford, New Haven, and Providence followed. On the 12th the banks of Boston and Mobile, on the 13th those of New Orleans, and on the 17th those of Charleston and Cincinnati fell in the same crash. There was now simply a general bankruptcy. Men would no longer meet their promises to pay, because no longer could new paper promises pay off old ones. No longer would men surrender physical wealth safely in their hands for the expectation of wealth to be created by the future progress of the country. But men with perfectly real physical wealth in their storehouses, which they could not themselves use, were also in practical bankruptcy because of their commercial debts most prudently incurred. The natural exchange of their own goods for goods which they or their creditors might use was obstructed by the utter discredit of paper money, and by the almost complete disappearance of gold and silver. Extra sessions of state legislatures were called to devise relief. The banks' suspension of specie payment in New York was within a few days legalized by the legislature of that State. On May 12 the secretary of the treasury directed government collectors themselves to keep public moneys where the deposit banks had suspended.
For banks holding the public moneys sank with the others. And it was this which compelled Van Buren in one matter to yield to the storm. On May 15 he issued a proclamation for an extra session of Congress to meet on the first Monday of September. It would meet, the proclamation said, to consider "great and weighty matters." No scheme of relief was suggested. The locking up of public moneys in suspended banks made necessary some relief to the government itself. It was, perhaps, well enough that excited and terrified people, casting about for a remedy, should, until their wits were somewhat restored, be soothed by assurance that the great council of the nation would, at any rate, discuss the situation. Moreover, it was wise to secure time, that most potent ally of the statesman. Within the three months and a half to elapse, Van Buren, like a wise ruler, thought the true nature of the calamity would become more apparent; proposals of remedies might be scrutinized; and thoughtless or superficial men might weary of their own absurd proposals, or the people might fully perceive their absurdity.
During the summer popular excitement ran very high against the administration. The Whig papers declared it to be "the melancholy truth, the awful truth," that the administration did nothing to relieve, but everything to distress the commercial community. Abbot Lawrence, one of the richest and most influential citizens of Boston, told a great meeting, on May 17, that there was no other people on the face of God's earth that were so abused, cheated, plundered, and trampled on by their rulers; that the government exacted impossibilities. No overt act, he said, with almost a sinister suggestion, ought to be committed until the laws of self-preservation compelled a forcible resistance; but the time might come when the crew must seize the ship. The friends of the administration sought, indeed, to stem the tide; and a series of skillfully devised popular gatherings was held, very probably inspired by Van Buren, who highly estimated such organized appeals to popular sentiment. In Philadelphia a great meeting denounced the bank suspensions and the issue of small notes as devices in the interest of a foreign conspiracy to throw silver coin out of circulation and export it to Europe, to raise the prices of necessaries, and recommence a course of gambling under the name of speculation and trade, in which the people must be the victims, and "the foreign and home desperadoes" the gainers. The meeting declared for a metallic currency. "We hereby pledge our lives, if necessary," they said, "for the support of the same." Later, on May 22, there was in the same city a large gathering at Independence Square, which solemnly called upon the administration "manfully, fearlessly, and at all hazards to go on collecting the public revenues and paying the public dues in gold and silver." Their forefathers, who fought for their liberties, the framers of our Constitution, the patriarchs whose memory they revered, were, with a funny mixture of truth and falsehood, declared to have been hard-money men. A week later, a great meeting in Baltimore approved the specie circular, and urged its fearless execution, "notwithstanding the senseless clamors of the British party;" for the crisis, they said, was "a struggle of the virtuous and industrious portions of the community against bank advocates and the enemies to good morals and republicanism." Protests were elsewhere made against forcing small notes into circulation. Paper had, however, to be used, for there was nothing else. Barter must go on, even upon the most flimsy tokens. In New York one saw, as were seen twenty-four years later, bits of paper like this: "The bearer will be entitled to fifty cents' value in refreshments at the Auction Hotel, 123 and 125 Water Street. New York, May, 1837. Charles Redabock." In Tallahassee a committee of citizens was appointed to print bank tickets for purposes of change. In Easton the currency had a more specific basis. One of the tokens read: "This ticket will hold good for a sheep's tongue, two crackers, and a glass of red-eye."
When Congress assembled, the country had cried itself, if not to sleep, at least to seeming quiet. The sun had not ceased to rise and set. Although merchants and bankers were prostrate with anxiety or even in irremediable ruin; although thousands of clerks and laborers were out of employment or earning absurdly low wages,—for near New York hundreds of laborers were rejected who applied for work at four dollars a month and board; although honest frontiersmen found themselves hopelessly isolated in a wilderness,—for the frontier had suddenly shrunk far behind them,—still the harvest had been good, the masses of men had been at work, and economy had prevailed. The desperation was over. But there was a profound melancholy, from which a recovery was to come only too soon to be lasting.