The first result of the removal of the deposits was very different from what Jackson had expected. At this time there was active speculation in Western lands. Men who had a little spare money bought Western lands. Those who had no money in hand, borrowed money from the banks and with it bought Western lands. Now it happened that many of the "pet banks" were in the West. The government's money, deposited with them, tempted their managers to lend money more freely. This, in turn, increased the ease with which people could speculate. Jackson saw that unless something were done to restrain this speculation, disaster would surely come. So he issued a circular to the United States land officers. This circular was called the Specie Circular, because in it the President forbade the land officers to receive anything except gold and silver and certain certificates in payment for the public lands.

The national debt had now all been paid. The government was collecting more money than it could use for national purposes. And it was compelled to keep on collecting more money than it could use, because the Compromise Tariff made it impossible to reduce duties any faster than a certain amount each year. No one dared to disturb the Compromise Tariff, because to do so would bring on a most bitter political fight. The government had more money in the "pet banks" than was really safe. It could not deposit more with them.

A curious plan was now hit upon. It was to loan the surplus revenues to· the states in proportion to their electoral votes. Three payments were made to the states. Then the Panic of 1837 came, and the government had to borrow money to pay its own necessary expenses. Before this occurred, however, Jackson was no longer President. In his place was Martin Van Buren, his Secretary of State, who had been chosen President in November, 1836.