At Staten Island, at the entrance into the Sound, an estate was purchased by some speculators for ten thousand dollars, was divided into lots, and planned as a town to be called New Brighton; and had the whole of the lots been sold at the price for which many were, previous to the crash, the original speculators would have realised three million of dollars. But the infatuation was not confined to the precincts of New York: every where it existed. Government lands, which could only be paid for in specie, were eagerly sought after; plans of new towns were puffed up; drawings made, in which every street was laid down and named; churches, theatres, hospitals, rail-road communications, canals, steam-boats in the offing, all appeared on paper as if actually in existence, when, in fact, the very site was as yet a forest, with not a log hut within a mile of the pretended city. Lots in these visionary cities were eagerly purchased, increased daily in value, and afforded a fine harvest to those who took advantage of the credulity of others. One man would buy a lot with extensive water privileges, and, upon going to examine it, would find those privileges rather too extensive, the whole lot being under water. Even after the crisis, there was a man still going about who made a good livelihood by setting up his plan of a city, the lots of which he sold by public auction, on condition of one dollar being paid down to secure the purchase, if approved of. The mania had not yet subsided, and many paid down their dollar upon their purchase of a lot. This was all he required. He went to the next town, and sold the same lots over and over again.
To check this madness of speculation, was one reason why an act of Congress was passed, obliging all purchasers of government lands to pay in specie. Nevertheless, government received nine or ten millions in specie after the bill passed. Now, when it is considered what a large portion of the capital drawn from England was applied to these wild speculations—sums which, when they were required, could not be realised, as, when the crisis occurred, property thus purchased immediately fell to about one-tenth of what was paid for it—it will be clearly seen that, from this unfortunate mania, a great portion of the present distress must have arisen.
The attempt of General Jackson and his successors, to introduce a specie currency into a country which exists upon credit, was an act of folly, and has ended in complete failure. (See note 1.) A few weeks after he had issued from the Mint a large coinage of gold, there was hardly an eagle to be seen, and the metal might almost as well have remained in the mine from whence it had been extracted. It was still in the country, but had all been absorbed by the agriculturists; and such will ever be the case in a widely extended agricultural country. The farmers, principally Dutch, live upon a portion of their produce and sell the rest. Formerly they were content with bank bills or Mexican dollars, which they laid by for a rainy day, and they remained locked up for years before they were required. When the gold was issued, it was eagerly collected by these people, as more convenient, and laid by, by the farmers’ wives, in the foot of an old worsted stocking, where the major part of it will remain. And thus has the famous gold-currency bill been upset by the hoarding propensities of a parcel of old women. (See note 2.)
Note 1. One single proof may be given of the ruinous policy of the Jackson administration in temporising with the credit of the country. To check the export of bullion from our country, the Bank of England had but one remedy, that of rendering money scarce: they contracted their issues, and it became so. The consequence was, that the price of cotton fell forty dollars per bale. The crop of cotton amounted to 1,600,000 bales, which, at forty dollars per bale, was a loss to the southern planters of 64,000,000 of dollars.
Note 2. A curious proof of this system of hoarding, which immediately took place upon the bank stopping payment, was told me by a gentleman from Baltimore. He went into a store to purchase, as he often had done, a canvas shot-bag, and to his surprise was asked three times the former price for it. Upon his expostulating, the vendors told him, that the demand for them by the farmers and other people who brought their produce to market, and who used them to put their specie in, was so great, that they could hardly supply them.