The U.S. financial crisis that began in 1837 amid bank failures and falling cotton prices was the Panic of 1837.
The crisis followed years of speculative growth in land, transportation, and cotton. President Andrew Jackson’s opposition to the Second Bank of the United States and the Specie Circular, which required payment for federal land in gold or silver, also affected the monetary system.
When British investors reduced lending and cotton prices fell, American banks faced pressure. Many suspended specie payments, meaning they stopped exchanging paper notes for gold or silver. Businesses failed, unemployment rose, and the downturn lasted for years.
The Panic of 1837 is sometimes described as a depression because its economic effects were prolonged. Martin Van Buren became president shortly before the crisis and was widely blamed politically, although international credit conditions and domestic speculation were also important.