The U.S. financial crisis that began in 1837 after banks stopped redeeming banknotes in gold and silver was the Panic of 1837.
The panic began on 10 May 1837, when banks in New York City suspended specie payments. That meant banknotes could no longer be exchanged for gold or silver on demand. The suspension reflected depleted reserves, falling land prices, reduced cotton revenues, and international financial pressure.
The crisis produced a long depression. Banks failed, businesses closed, unemployment rose, and wages declined. President Martin Van Buren established an independent treasury system, although the economy did not recover quickly.
Historians debate the relative importance of President Andrew Jackson’s policies, including the removal of federal deposits, and international factors. The panic is therefore best understood as a combination of domestic credit excesses and wider monetary pressures.