panic of 1837 5
TRANSCRIPT
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