panic of 1837 5

PANIC

OF

1837

WHEN

AND

WHERE

WHAT WAS

IT?

Began when every bank

started accepting

payment in only gold and silver coins

Financial Crisis

The Early 1930s• Expansion and prosperity

• New railroads and canals

• Millions of acres of public lands were sold by the

government.

• Paid off National Debt

• Surplus in Treasury

• Congress distributed surplus to the States

• Specie Circular issued by Andrew Jackson

ANDREW JACKSON’S IMPACT

Jackson’s economic policies

contributed to the Panic of

1837

saw the Bank of the United States as a

monopoly of the rich.

he was all about using gold and

silver coins opposed to bank

notes.

removed all of the federal government's funds from the

Bank of the U.S. and put them in

state banks which led to fall of the

Bank.

Four years before the

Bank's charter was expired

The President of the Bank put

in for a new charter but

Jackson vetoed it.

• (December 5, 1782 – July 24, 1862) in Kinderhook, New York

• Eighth President of the United States

• First President not of British descent

- He was Dutch

• President during the Panic

- President for only 5 weeks prior

• He was blamed because of his refusal to involve the government.

MARTIN VAN BUREN

ECONOM

Y• America’s first depression

- lasted 5 years

• Contributed to

the damages and

how long the

Panic lasted

INFL

ATIO

N

-

The introduction of

the inflation

of paper

money was a major

contributor to

the panic . It was caused

by the excessive

issuing of paper money by banks

without having

the reserves to back it up.

THE S

PECIE

CIRCULA

R ACT

OF 1836

Required potential

property

buyers to use specie

rather than bank

notes. Although

the use of bank notes

was easier than

carrying specie around, banks

were required to

exchange such notes for specie as

promised. A

potential property owner would simply go to

the bank and

exchange the note for specie in order to

purchase the

property.

T

HE

BANK

OF

ENGLA

ND was not

comfortable

with the increased

flow of

funds into U.S. by British

investors.

To combat this negative flow of

funds, the

bank increased its deposit rate. The

increase in

the deposit rate made it more attractive for

British

investors to invest within the UK,

therefore

pulling funds from the U.S.

Depression• First depression

• 343 out of 850 banks closed

• Five year lond depression

• Unprecedented unemployment rate

• Impact lingered till 1843