Panic of 1837

The Panic of 1837 was a financial crisis in the United States that began when New York banks ran out of specie on May 10, 1837, triggering a wave of bank suspensions and a depression that lasted into the mid-1840s. The panic followed speculative lending in western land, a sharp fall in cotton prices, and the contraction of credit after President Andrew Jackson's Specie Circular and his refusal to renew the charter of the Second Bank of the United States removed a national lender of last resort. More than 40 percent of American banks failed or partially failed, wages and prices fell for years afterward, and the ensuing depression became one of the most severe in the nation's antebellum history. Contemporaries divided sharply over its cause, with Democrats blaming speculative bankers and Whigs blaming Jackson's monetary policies, a partisan dispute that has echoed in later historical assessments of the era's laissez-faire banking arrangements.