Panic Of 1837 Essay

The Panic of 1837 was one of the first major economic crisis in U.S. history. As banks started to grow across the country, the opposition to them also grew, as well as their economic difficulties. It started with President Jackson’s influential idea that the banking system diminished the power of the people and created social class division. As President Jackson strongly enforced his opposition to the banking system, he started retiring all funds that went to banks, as well as refusing its renewal and exchanging paper money for gold and silver. Although there were people who were opposed to the banking system and the value of paper money, interrupting its system led to an economic disaster that caused bankruptcies as well as increased unemployment.

For instance, in “Panic of 1837” (Campbell), it is explained that because of the money deflation the bank’s “confidence evaporated” as “banking and insurance stocks fell.” As explained in the article, all of the regulations from the government caused banks to lose savings and with that go bankrupt, leading to more than one hundred backs to close. Because of the great amounts of money lost, many other related industries started to decay such as agriculture as food products’ prices rose, causing riots among the population as they demanded more accessible prices to be able to eat enough. As an example, Campbell states that because of the withdrawal of other international banks as they refused to be associated with the American banks caused “plantations to be unable to cultivate their crops.” With the demands from the growing American population for goods but with rising prices, farmers found themselves in debt and with difficulties selling their products. Despite farmers trying their best to maintain the agricultural economy, the crisis of banks directly affected their progress as paper money value deflated and also affected employment

For example, in “The Significance Of The Panic Of 1837” (Beckett) it is stated that unemployment mostly affected those in “areas where manufacturing was present.” The factories were forced to close and declare themselves bankrupt as their paper money was now worthless and they did not have enough gold or silver to pay back. Despite unemployment being present, the numbers were not as high as from other economic crises in American history, yet it directly caused banks to close as they no longer were able to count on paper money and refused to use gold and silver as a solution to it. As an example, the article also explains how the economic catastrophe characterized by debts, and unemployment, completely “devastated the US economy.” The financial disaster did not count the help of the Legislature as President Martin Van Buren, who was left with the crisis by Jackson, decided that the government would not get involved. The refusal of the government to support the people prolonged the disaster, making it last six years but the country only recovered until the late 1940s and the economy slowly recovered with the help of migrants from all over the