The 1837 U.S. financial crisis that caused a prolonged economic depression was the Panic of 1837.
The crisis followed years of rapid expansion in land prices, banking, and state-sponsored development. President Andrew Jackson’s opposition to the Second Bank of the United States and his policies concerning federal deposits changed the country’s financial structure. Speculation continued while banks issued large amounts of paper money.
In 1836, the federal government required payment for public land in gold or silver through the Specie Circular. Commodity prices then weakened, British lenders reduced credit, and banks struggled to redeem their notes. New York banks suspended specie payments in May 1837, intensifying the panic.
The downturn lasted for years and produced bank failures, business closures, unemployment, and falling wages. The Panic of 1837 is sometimes described as a depression because its economic effects continued well beyond the initial market shock.