The first phase of this development of the new Northwest was ended in 1837, when the general panic brought confusion to speculation throughout the United States. For four years the sanguine hopes of the frontier had led to large purchases of public lands, to banking schemes of wildest extravagance, and to railroad promotion without reason or demand. The specie circular of 1836 so deranged the currency of the whole United States that the effort to distribute the surplus in 1837 was fatal to the speculative boom. The new communities suffered for their hopeful attempts. When the panic broke, the line of agricultural settlement had been pushed considerably beyond the northern and western limits of Illinois. The new line ran near to the Fox and Wisconsin portage route and the west line of the Black Hawk purchase. Milwaukee and Southport had been founded on the lake shore, hopeful of a great commerce that might rival the possessions of Chicago. Madison and its vicinity had been developed. The lead country in Wisconsin had grown in population. Across the river, Dubuque, Davenport, and Burlington gave evidence of a growing community in the country still farther west. Nearly the whole area intended for white occupation by the Indian policy had been settled, so that any further extension must be at the expense of the Indians' guaranteed lands. On the eve of the panic, which depopulated many of the villages of the new strip, Michigan had been admitted. Her possessions west of Lake Michigan had been reorganized as a new territory of Wisconsin, with a capital temporarily at Belmont, where Henry Dodge, first governor, took possession in the fall of 1836. A territorial census showed that Wisconsin had a population of 22,214 in 1836, divided nearly equally by the Mississippi. Most of the population was on the banks of the great river, near the lead mines and the Black Hawk purchase, while only a fourth could be found near the new cities along the lake. The outlying settlements were already pressing against the Indian neighbors, so that the new governor soon was obliged to conduct negotiations for further cessions. The Chippewa, Menominee, and Sioux all came into council within two years, the Sioux agreeing to retire west of the Mississippi, while the others receded far into the north, leaving most of the present Wisconsin open to development. These treaties completed the line of the Indian frontier as it was established in the thirties.