The U.S. financial crisis that began in 1837 amid bank failures, falling cotton prices, and collapsing land speculation was the Panic of 1837.
The panic began in May 1837, when banks in New York City suspended payments in gold and silver. A speculative boom in land and canals had expanded credit, while cotton prices weakened and foreign investors reduced lending. Many banks could no longer meet demands for specie, meaning hard-money payments.
President Andrew Jackson’s financial policies contributed to the setting. His Specie Circular required payment for federal land in gold or silver, while the dismantling of the Second Bank of the United States left a less centralized banking system. Martin Van Buren inherited the crisis after becoming president in March 1837.
The downturn lasted for years and caused widespread unemployment, business failures, and falling prices. The event is distinct from the Panic of 1819 and later panics such as those of 1857 and 1873.