THE SURPLUS.--After the debt was extinguished a surplus still remained, and was greatly increased by a sudden speculation in public lands, so that by the middle of 1836 the government had more than $40,000,000 of surplus money in the banks. What to do with the money was a serious question, and all sorts of uses were suggested. But Congress decided that from the surplus as it existed on January 1, 1837, $5,000,000 should be subtracted and the remainder distributed among the states in four installments. [15] THE ELECTION OF VAN BUREN.--When the time came to choose a successor to Jackson, a Democratic national convention nominated Martin Van Buren, with Richard M. Johnson for Vice President. The Whigs were too disorganized to hold a national convention; but most of them favored William Henry Harrison for President. Van Buren was elected (1836); but no candidate for Vice President received a majority of the electoral vote. The duty of choosing that officer therefore passed to the United States Senate, which elected Richard M. Johnson. THE ERA OF SPECULATION.--On March 4, 1837, Van Buren [16] entered on a term made memorable by one of the worst panics our country has experienced. From 1834 to 1836 was a period of wild speculation. Money was plentiful and easy to borrow, and was invested in all sorts of schemes by which people expected to make fortunes. Millions of acres of the public land were bought and held for a rise in price. Real estate in the cities sold for fabulous prices. Cotton, timber lands in Maine, railroad, canal, bank, and state stocks, and lots in Western towns which had no existence save on paper, all were objects of speculation. [Illustration: NEW YORK MERCHANT, 1837.] PANIC OF 1837.--Money used for these purposes was borrowed largely from the state banks, and much of it was the surplus which the government had deposited in the banks. When, therefore, in January, 1837, the government drew out one quarter of its surplus to distribute among the states, the banks were forced to stop making loans and call in some of the money they had lent. This hurt business of every sort. Quite unexpectedly the price of cotton fell; this ruined many. Business men failed by scores, and the merchants of New York appealed to Van Buren to assemble Congress and stop the further distribution of the surplus. Van Buren refused, and the banks of New York city suspended specie payment, that is, no longer redeemed their notes in gold and silver. Those in every other state followed, and a panic swept over the country. [17]