The 1837 U.S. financial crisis that caused widespread bank failures and a prolonged depression was the Panic of 1837.
The crisis followed years of speculative lending, particularly in land and cotton. President Andrew Jackson’s policies, including the removal of federal deposits from the Second Bank of the United States and the Specie Circular, contributed to tighter credit conditions. The collapse of cotton prices and problems in British financial markets added pressure.
Banks suspended specie payments, meaning they stopped redeeming paper notes for gold or silver. Businesses failed, construction slowed, and unemployment rose. The resulting depression lasted until about 1843, although its effects varied across regions.
The panic is sometimes attributed solely to Jackson, but historians generally identify several interacting causes, including international credit conditions, commodity speculation, and domestic banking instability. Martin Van Buren took office in March 1837 and faced the crisis almost immediately.