The U.S. stock-market panic that began in 1837 after banks stopped redeeming paper notes in gold and silver was the Panic of 1837. On May 10, 1837, banks in New York City suspended specie payments, meaning they would no longer exchange banknotes for precious-metal coin on demand.
The suspension followed years of land speculation, easy credit, unstable banking, and political changes affecting federal deposits. President Andrew Jackson’s Specie Circular had required payment for public land in gold or silver, while the collapse of cotton prices weakened American borrowers and banks.
The panic quickly became a broad depression. Businesses failed, unemployment rose, and banks across the United States suspended convertibility. The downturn lasted for years, although its intensity varied by region and sector.
The event is sometimes confused with later panics because it involved both banking distress and falling securities prices. Its name refers to the year in which the payment suspension triggered the acute phase, not to a single exchange session. Martin Van Buren inherited the crisis after becoming president in March 1837.