1. Chapter 9

2.  Federalist policy – sell land in 640 acres lots  1796 – at $2.00/acre w/ 1 year to complete payment  Attractive to speculators  Jefferson/Republicans – sought to get the land in the hands of real farmers  1800: 320 acres at $2/acres; 4 years to pay  1804: 160 acres at $1.64; 1820:80 acres at $1.25; 1832: 40 acres  Most land bought originally by speculators

3.  Second Bank of U.S.  Added to money supply  Stimulated private bank creation  Farmers borrowed to purchase land from speculators  Crew cash crops to pay off debts  Often exhausted the soil, and had to move on

4.  Issued bank notes redeemable for specie (gold and silver coins)  Issued more notes than deposits of specie  Collapse of British cotton market  33 cents/pound to 14 cents/pound  Merchants couldn’t pay their debt, b/c Britain demanded specie  Merchants sought to exchange bank notes for specie  led to a run on the banks  State banks called in loans to obtain specie  National Bank also called in loans in specie and sought redemption of bank notes  Banks collapsed; foreclosures; lawsuits for debt payment

5.  Debtor relief laws (almost all were unconstitutional)  Western states  Postponed foreclosures  Restricted liquidation sales  Closed state banks to creditors  Forced creditors to accept bank notes  Some states outlawed all but state controlled banks  The crisis led to demands for expansion of voting rights  * voter participation rose from 27% (1824) to 80 % (1840)

6.  In contrast to Jeffersonian resistance to the risks of capitalism, the court sided with capitalistic commerce  Dartmouth v. Woodward – inviolability of contracts (charters)  Sturgis v. Crowninshield – struck down very liberal bankruptcy laws  Gibbons v. Ogden – prevented states from interfering in competitive elements of the market

7.  Increase in voters  Increase in participation in elections  Movement toward national conventions for picking candidates  “Jeffersonian” Republicans found their own candidate – Andrew Jackson

8.  1825 – Treaty of Indian Springs – Creek lands in Georgia and Alabama  Southern states pressured Indians to move  1830 – Indian Removal Act  1831 – Cherokee Nation v. Georgia  1832 – Worcester v. Georgia  1838 – Trail of Tears