The Specie Circular (Coinage Act) was an executive order issued by U.S. President Andrew Jackson in 1836 and carried out by President Martin Van Buren. It required payment for public lands be in gold and silver specie.
It was an immediate reaction to growing concerns about excessive speculation of land after Indian Removal. Most of this speculation was being done with "soft money"; Jackson issued this order to protect the settlers who were being forced to pay greatly inflated land prices with devalued paper currency. However, as a result of this action, paper money became instantly devalued. This, in turn, caused large amounts of specie (hard money) to be moved to the west to pay for land transactions when it was needed by eastern banks. Specie was already short in the East because the British government restricted the transfer of specie to the United States, which caused the Panic of 1837. This shortage in specie led to a fall in cotton prices, for cotton was used as collateral in most American loans, which required specie. Because of it loans were much harder to acquire, cotton became devalued, and the whole US economy suffered as a result. The Specie Circular made this economic panic worse.
The order contributed to the Panic of 1837.
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