Panic of 1837 begins in New York City
- When
- 1836–1837
- Where
- United States; New York City
- Episodes
- 2
The Panic of 1837 began in New York City on May 10, 1837, when banks ran out of gold and silver and suspended specie payments. This crisis followed economic expansion and policy shifts, including the Specie Circular, which restricted land purchases to hard money. The resulting bank run triggered a severe economic collapse, though the full multi-year depression and political responses are outside this specific event scope.
Episodes
- Specie Circular Impact
The 1836 Specie Circular required gold and silver for land purchases, causing a price crash due to lack of hard money.
- New York Bank Run
On May 10, 1837, New York banks ran out of gold and silver, leading to the suspension of specie payments.
Background and detail
Background. The crisis had domestic and foreign origins, following economic expansion from mid-1834 to mid-1836. The Specie Circular of 1836 mandated that western lands be purchased only with gold and silver coin, not bank loans. This policy caused a real estate and commodity price crash because buyers lacked sufficient hard money to pay inflated prices, setting the stage for the panic.
Immediate Causes. The ailing economy of early 1837 led investors to panic, resulting in a bank run. The Deposit and Distribution Act of 1836 placed federal revenues in local banks, known as "pet banks," across the country. These factors contributed to the instability that culminated in the suspension of specie payments in New York City.
Outbreak in New York. The bank run came to a head on May 10, 1837, when banks in New York City ran out of gold and silver. They immediately suspended specie payments, refusing to redeem commercial paper in specie at full face value. This event marked the beginning of the financial crisis in the United States.
People involved
- New York City Banks · Financial Institutions
Sources
- Panic of 1837 Wikipedia, revision of 2026-09-16
Machine-drafted from the cited Wikipedia passages and checked by a reviewing model, not by a human editor. Every passage cites the revision it was written from; dates and places follow those passages.