5 Worst Financial Panics in U.S. History


The Panic of 1837

After the Panic of 1819, Pres. Andrew Jackson began a fierce campaign against the Bank of the United States, the large national bank that had helped spark trouble during the financial crisis. Jackson wanted 100 percent reserve-backed banking to prevent the institutions from issuing mounds of bank notes that they couldn't cover.

He vetoed an 1832 renewal of the Bank of the United States' charter and disbanded the institution, removing the public treasury deposits and distributing them among other banks. Unfortunately, in the years following the 1819 panic, the Bank of the United States had continuously amped up the country's currency supply, contributing in part to steep inflation and spurring land speculation.

Because of this and other complex economic factors, currency depreciated and contractionary pressures returned. Prices fluctuated wildly and the banking system lost stability -- and consumer confidence -- once again. A wave of deflation followed, and panic struck people across the nation. Banks closed by the hundreds, and the country was once again mired in the throes of a depression for several years.