What law required public lands to be purchased with hard currency, contributing to economic instability?

The Specie Circular law is recognized for requiring that public lands be purchased only with gold and silver, rather than with paper money. This legislation was enacted in 1836 during the presidency of Andrew Jackson. The intent behind the law was to curb rampant speculation in land purchases that had been exacerbated by easy credit and paper currency, which led to land inflation.

By mandating payment in hard coins, the law aimed to stabilize the real estate market, but it inadvertently caused significant economic instability. As people had to convert their paper money into gold or silver, it led to a decrease in land sales. This restriction also contributed to a broader economic downturn and was one of the factors leading to the Panic of 1837. The repercussions of this law were wide-reaching, affecting banks, businesses, and the broader economy, as fewer transactions meant less liquidity overall in the markets.

In summary, the Specie Circular law is correctly identified as the law that mandated public land purchases in hard currency, which significantly contributed to economic instability during that period.