Panic of 1837

Andrew Jackson was the president for eight years. Martin Van Buren was elected president after Jackson. Van Buren was not as popular. He was clever and smart. He would need those skills to get through the trouble ahead of him.

When Jackson was president, he had fought a battle over the Bank of the United States. Jackson did not like the bank. He was successful in closing it. This success led to trouble for the country.

Van Buren had only been in office for two months when the nation faced an economic crisis. After Jackson closed the bank, state banks could lend as much money as they wanted to. More and more people started to apply for loans. The state banks printed more paper money for the loans.

This paper money was not supported by gold or silver. Inflation grew quickly. This meant that that money wasn't worth as much. One dollar could not buy as much as it could a couple of months before.

Jackson saw this problem before he left office. He knew that something needed to be done. In 1836, Jackson issued the Specie Circular. This act said that the government would only take gold or silver to buy federal land.

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