As a result of Jackson’s Specie Circular of 1836,
Martin Van Buren was elected president of the United States.
investors panicked in a rush to convert assets into cash.
the bank immediately closed.
a wave of reckless investments created an inflationary spiral.
the government accepted bank notes in payment for public lands.
The Correct Answer and Explanation is :
The correct answer is:
Investors panicked in a rush to convert assets into cash.
Explanation: The Specie Circular was an executive order issued by President Andrew Jackson in 1836, which required that the purchase of public lands be made with “specie” (gold or silver coins) rather than paper money. This was aimed at curbing land speculation, which was inflated by the easy credit offered by state-chartered banks, often backed by paper money. Jackson’s move came after the rapid increase in land purchases and speculative investments, which created an artificial boom in land prices.
When the Specie Circular was enforced, it created a sudden shift. Investors, many of whom were holding paper money, were faced with the requirement to pay in hard currency (gold or silver). This caused a panic, as many of them were unable to convert their paper money into specie. As a result, there was a rush to convert assets into cash, and people tried to withdraw their deposits from banks, which led to widespread economic instability.
The panic, combined with other factors such as the overextension of credit and the collapse of speculative ventures, contributed to the Panic of 1837. During this economic crisis, many banks failed, businesses went bankrupt, and unemployment rose sharply. This financial disaster plagued Van Buren’s presidency, who inherited the problem from Jackson.
The Specie Circular ultimately had a lasting impact, contributing to a sharp economic downturn in the late 1830s, and is often cited as one of the key causes of the Panic of 1837.
I’ll generate the image now.
Here is the historical scene depicting the panic of 1837 and the rush to convert assets into cash. This reflects the economic chaos that resulted from Jackson’s Specie Circular of 1836. Let me know if you’d like any further details or explanations!