The Specie Circular is a fascinating piece of economic history that influences both monetary policy and the understanding of financial institutions. As educators, one crucial responsibility is to ensure that our students understand the past and can learn from its events to better understand the world today. This article will guide you through teaching students about the Specie Circular and its importance in American history.
What is the Specie Circular?
The Specie Circular was an executive order given by President Andrew Jackson in 1836, which mandated that all land sales made by the United States be paid for in gold or silver coinage (specie). This decision aimed to curb excessive land speculation and prevent rampant inflation, as it limited the use of paper money for this particular economic activity.
Historical Context
To help your students understand the historical context of the Specie Circular, it’s essential to discuss some key events that led up to Jackson’s decision:
The Second Bank of the United States: The Bank served as a centralized institution responsible for printing paper money and providing loans for economic growth. However, many saw it as corrupt and an abuse of power by a select few.
Wildcat Banks: As a result of dissatisfaction with the Second Bank, private banks (nicknamed Wildcat Banks) sprung up across the country, issuing their banknotes. This led to an expansion of credit and ultimately inflation.
Land speculation: Many people took advantage of easy credit provided by these banks to buy federal land on credit, hoping to sell it later at a profit. This contributed to a speculative bubble in land prices.
Key Teachings
To teach your students about the Specie Circular effectively, consider these key points:
Economic cause-and-effect relationships: Show your students how the Second Bank’s perceived corruption led to Wildcat Banks’ establishment and consequent land speculation—ultimately culminating in the Specie Circular.
Monetary policy: Explain the role of gold and silver as a stable form of currency during this time, and how the Specie Circular aimed to stabilize the economy by limiting the use of paper money.
Consequences and impact: Discuss the consequences of this policy, including the Panic of 1837 – a financial crisis sparked by the sudden contraction of credit due to Jackson’s actions.
Classroom Activities
To engage your students further while teaching about the Specie Circular, consider incorporating these classroom activities:
Group discussions: Encourage your students to discuss how different monetary policies can impact an economy. This activity will allow them to think critically about modern-day fiscal policy and historical examples.
Role play: Assign roles of various stakeholders affected by the Specie Circular, such as President Andrew Jackson, land speculators, and private bank owners. This will help your students empathize with different perspectives and promote debate on the consequences of economic decisions.
Timeline creation: Have your students research other notable economic events in U.S. history and create a timeline that showcases their interconnectedness.
Teaching about the Specie Circular is important for understanding American economic history, and helping your students grasp essential concepts in monetary policy and its effects on broader society. By incorporating these key teachings and engaging classroom activities, you’ll be ensuring your students walk away with a deeper appreciation for how past decisions shape our present-day world.
