The Panic of 1837 began in the United States in 1837.
The panic followed years of rapid land speculation, easy credit, and expansion of banking activity. President Andrew Jackson’s policies, including the removal of federal deposits from the Second Bank of the United States, changed the country’s financial structure. The Specie Circular of 1836 also required many land purchases to be paid for in gold or silver.
A downturn in cotton prices and tightening credit in Britain placed additional pressure on American banks and businesses. In May 1837, New York banks suspended payment in specie, meaning they stopped redeeming banknotes in gold or silver. The financial shock spread across the country.
The depression that followed lasted for years and brought bank failures, business closures, falling prices, and widespread unemployment. The crisis is sometimes confused with the Panic of 1819, an earlier American financial collapse, but 1837 is the defining start year for this episode.