Panic of 1837
How did it start?
New York banks raised rates and scaled back on lending
prices of cotton, land, and slaves rose sharply
banks suspended specie payments
due to economic expansion
domestic and foreigh affairs
What impact did it have?
whole nation felt affects
Out of 850 banks in the United States, 343 closed entirely and 62 failed partially
Cotton Belt felt the worst of it because crop prices fell
the United States withdrew from international money markets
the panic unleashed a wave of riots and other forms of domestic unrest
What did Andrew Jackson do as a result?
Issued the Specie Circular
Never renewed the charter of the Second US bank
Removed government funds from the banks
Issued the Deposit and Distribution Act of 1836
Vetoed the bill to recharter the Second US bank
What was it?
Unemployment may have been as high as 25% in some areas
Banks collapsed
Finanical crisis in the US
Profits, prices and wages went down while unemployment went up
Businesses closed
How were the banks involved?
state-chartered banks in the West and South relaxed their lending standards
New York banks raised interest rates and scaled back on lending
Bank of England raised interest rates from 3 to 5 percent
banks in New York City suspended specie payments
Subtopic