[Footnote 1: One state, New York, was to receive $4,000,000, three states over $2,000,000, six over $1,000,000, and eight over $500,000] On January 1, 1837, the surplus was $42,468,000, which, after subtracting the $5,000,000, left $37,468,000 to be distributed. It was to be paid in four installments[1]; but only three of them were ever paid, for, when October 1, 1837, came, the whole country was suffering from a panic[2]. [Footnote 1: The days of payment were Jan. 1, April 1, July 1, and Oct. 1, 1837] [Footnote 2: Bourne's _History of the Surplus Revenue of 1837_] %345. The Panic of 1837.%--Now, when the banks in which the government surplus was kept were suddenly called on to give it up in order that it might be distributed among the states, (as they had loaned this surplus) they were all forced to call it in. More than that, they would make no new loans. This made credit hard to get. As a consequence, mills and factories shut down, all buying and selling stopped, and thousands of workmen were thrown out of employment. As everybody wanted money, it followed that houses, lands, property of every sort, was offered for sale at ridiculously low prices. But there were no buyers. In New York the distress was so great that bread riots occurred. The merchants, unable to pay their debts, began to fail, and to make matters worse the banks all over the country suspended specie payment; that is, refused to give gold and silver in exchange for their paper bills. Then the panic set in, and for a while the people, the states, and the government were bankrupt[1]. [Footnote 1: Shepard's _Van Buren_, Chap. 8.] %346. Election of Martin Van Buren; Eighth President.%--In accordance with the well-established custom that no President shall have more than two terms, Jackson [Illustration: Martin Van Buren] would not accept a renomination in 1836. So the Democratic national convention nominated Martin Van Buren and R.M. Johnson. The Whigs, as the National Republicans called themselves after 1834, did not hold a national nominating convention, but agreed to support William Henry Harrison. Van Buren was elected, and inaugurated March. 4, 1837[1]. [Footnote 1: _Ibid_., Chap. 7.] %347 The New National Debt; the Independent Treasury.%--But scarcely had he taken the oath of office when the panic swept over the country, and his whole term was one of financial distress or hard times. The suspension of specie payment and the failures of many banks and merchants left the government without money, and forced Van Buren to call an extra session of Congress in September, 1837. Before adjourning, Congress ordered the fourth or October installment of the distributed revenue to be suspended. It has never been given to the states. Congress also authorized the Secretary of the Treasury to issue $10,000,000 in treasury notes, and so laid the foundation for the second national debt, which one cause or another has continued ever since.