One of the Important reasons for the 1836 Specie Circular was the uncontrolled land speculation in the West. Real estate speculation was funded by increased availability of credit from the Second Bank of the United States and new, reckless frontier banks. State banks were chartered for the express purpose of extending credit to speculators. The number of banks more than doubled between 1812 and 1819. The Banks were unregulated and began to issue massive amounts of bank notes. The bank notes were not backed by gold and silver. This led to the Panic of 1819.
