what caused the panic of 1837?

Answer 1

recession caused by president Jackson's drastic movement of federal bank deposits to state and local banks
led to relaxed credit policies and inflation
recession lasted into the 1840s

Answer 2

What Caused The Panic Of 1837

Answer 3

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RE:
what caused the panic of 1837?

Answer 4

"The Panic of 1837 was built on a speculative fever. The bubble burst on May 10, 1837 in New York City, when every bank stopped payment in specie (gold and silver coinage). The Panic was followed by a five-year depression, with the failure of banks and record high unemployment levels."

Answer 5

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The Panic was built on a speculative fever. The bubble burst on May 10, 1837 in New York City, when every bank stopped payment in specie (gold and silver coinage). The Panic was followed by a five-year depression, with the failure of banks and record high unemployment levels. Purported causes include the economic policies of President Andrew Jackson who created the Specie Circular by executive order and also refused to renew the charter of Second Bank of the United States, resulting in the withdrawal of government funds from that bank. Martin Van Buren, Jackson's hand-picked heir apparent, who became President in March 1837, five weeks before the Panic engulfed the young republic's economy, was blamed for the Panic. His refusal to involve the Government in the economy was said by some to have contributed to the damages and duration of the Panic. Of course, the initial Government intervention in the market had inadvertently been part of the cause of the problem, and further intervention might or might not have been useful. Democratic Jacksonians blamed bank irresponsibility, both in funding rampant speculation and by introducing paper money inflation. This was caused by banks issuing excessive paper money, leading to inflation. Within two months the failures in New York alone aggregated nearly $100,000,000 in value. "Out of 850 banks in the United States, 343 closed entirely, sixty-two failed partially, and the system of State banks received a shock from which it never fully recovered." [1] A central banking cushion of any sort might have prevented some local failures. A few large local banks, like the Suffolk Bank of Boston, acted like central banks, lending reserves to other banks, and alleviated the effects of the Panic of 1837 in New England. Although Van Buren did not engender the Panic of 1837, he was harshly judged (and failed to be re-elected) because he was ideologically committed to keeping the government out of banking regulation, a resolve that many economic historians feel extended the effects of the Panic (while others consider his approach to have minimised potentially destructive interference), which was not over until 1843. Van Buren even kept Jackson's Secretary of the Treasury, Levi Woodbury. Economist Milton Friedman explains (1960 p 10): The banking panic of 1837 was followed by exceedingly disturbed economic conditions and a long contraction to 1843 that was interrupted only by a brief recovery from 1838 to 1839. This Great Depression is particularly interesting for our purposes. It is the only depression on record comparable in severity and scope to the Great Depression of the 1930s, and its monetary concomitants largely duplicate those of its later mate. In both, a substantial fraction of the banks in the United States went out of existence through suspension or merger --around one quarter in the earlier and over one-third in the later contraction--and the stock of money fell by about one-third. There is no other contraction that even closely approaches this dismal record. In both cases, erratic or unwise governmental policy with respect to money played an important part. gatita_63109

Answer 6

Recessions, like wars, have been an integral part of United States history. Shortly after our War of Independence, the nation witnessed the first in a series of depressions -- dislocations that have caused this country tremendous economic havoc. Following the panic of 1785, another slump ensued, and then another. In 1837, however, the young nation endured its most serious depression yet.


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Answer 7

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Answer 8

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