The 1837 U.S. financial crisis that followed land speculation and collapsing cotton prices was the Panic of 1837.
During the 1830s, easy credit and booming land sales encouraged banks, merchants and settlers to take on debt. President Andrew Jackson’s Specie Circular required many federal land purchases to be paid in gold or silver, tightening credit. International pressure and falling cotton prices then weakened American banks.
On 10 May 1837, New York City banks suspended specie payments, meaning they stopped exchanging banknotes for precious metal. Bank failures and business closures spread across the country. The resulting depression lasted for years and produced widespread unemployment.
The crisis is often confused with the Panic of 1819 because both involved land speculation. The 1837 panic, however, was tied specifically to Jackson-era banking policies, specie payments and the collapse of cotton-related finance.