The U.S. financial crisis that began in 1837 after banks suspended specie payments was the Panic of 1837. Specie meant gold or silver coin, and suspension meant that banks stopped exchanging notes for hard money.
The crisis followed years of land speculation, easy credit, and rapid expansion of state-chartered banks. President Andrew Jackson’s banking policies, including the removal of federal deposits from the Second Bank of the United States, changed the country’s financial structure. The Specie Circular also required payment in gold or silver for many federal land purchases.
When confidence weakened, banks curtailed lending and many could not redeem their notes. Businesses failed, unemployment rose, and the downturn lasted for years. The crisis is often linked to international financial problems as well as domestic policy, so it was not caused by one single event. Martin Van Buren entered office in 1837 and faced most of the panic’s immediate consequences.