The 1837 US financial panic followed the collapse of land speculation and bank lending.
During the 1830s, expanding credit and rising land prices encouraged speculation across the United States. Banks issued large quantities of paper money, while merchants and investors relied on loans to purchase land and commodities.
President Andrew Jackson’s Specie Circular of 1836 required payment for federal land in gold or silver, reducing access to easy credit. Economic weakness in Britain also reduced demand for American cotton and tightened international finance. In May 1837, New York banks suspended specie payments, meaning they stopped converting notes into precious metal.
The resulting depression brought bank failures, business closures, unemployment, and falling prices. Martin Van Buren became president during the crisis and proposed an independent treasury system. The Panic of 1837 is distinct from the Panic of 1857, which began two decades later.