The 1837 U.S. financial crisis caused by collapsing land speculation and widespread bank failures was the Panic of 1837.
The crisis began in May 1837 when New York banks suspended payment in gold and silver. Speculative purchases of western land, unstable banking practices, falling cotton prices, and international financial pressure had weakened the economy. The suspension meant that banks could no longer reliably exchange paper notes for specie.
The downturn produced a severe depression that lasted for several years. Businesses failed, unemployment rose, and many banks and state-chartered financial institutions collapsed. President Martin Van Buren’s administration rejected a federal bailout and later supported the creation of an independent treasury system.
The Panic of 1837 is distinct from the Panic of 1857, which was linked to failures involving railroads and the Ohio Life Insurance and Trust Company. It is also often discussed as part of the economic consequences of the banking policies of Andrew Jackson’s presidency.