Panic of 1837

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Key

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The Economy

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Panic of 1837

How were the banks involved?

Subtopic

banks in New York City suspended specie payments

Bank of England raised interest rates from 3 to 5 percent

New York banks raised interest rates and scaled back on lending

state-chartered banks in the West and South relaxed their lending standards

What was it?

Businesses closed

Profits, prices and wages went down while unemployment went up

Finanical crisis in the US

Banks collapsed

Unemployment may have been as high as 25% in some areas

What did Andrew Jackson do as a result?

Vetoed the bill to recharter the Second US bank

Issued the Deposit and Distribution Act of 1836

Removed government funds from the banks

Never renewed the charter of the Second US bank

Issued the Specie Circular

What impact did it have?

the panic unleashed a wave of riots and other forms of domestic unrest

the United States withdrew from international money markets

Cotton Belt felt the worst of it because crop prices fell

Out of 850 banks in the United States, 343 closed entirely and 62 failed partially

whole nation felt affects

How did it start?

domestic and foreigh affairs

due to economic expansion

banks suspended specie payments

prices of cotton, land, and slaves rose sharply

New York banks raised rates and scaled back on lending