New York City was the epicenter of the Panic of 1837. Today, it is still the economic bull’s eye of the United States.
The city is the hub of financial markets: finance, real estate, media, technology and other industries. As an economic center of global interest, it hosts Wall Street, the New York Stock Exchange and Nasdaq.
What happens in that metropolis affects the entire country and negative events are felt throughout the world.
Several factors led up to the Panic of 1837 which culminated in a long depression.
Political fights followed President Andrew Jackson into the White House.
1832: President Andrew Jackson refused to renew the charter of the Second Bank of the United States. He was at odds with the bank’s president, Nicholas Biddle. In 1836, in an effort to decentralize the banking system, funds were moved from the Second Bank of the U.S. to private banks, known as “pet banks.” These were Jackson-loyal state banks—pets of his.
Hard currency left New York City and was moved throughout the country—out West to state banks.
As a result, there was no longer any regulation over small banks, as there had been when the Second Bank of the U.S. was in power. These small banks were loose with loans and credit. The outlying banks printed extra money and paper currency became devalued. Inflation rose.
Personal differences and feuds must be settled amicably by elected government officials who are in positions to serve the people.
The stock market on Wall Street in New York City sank, causing more businesses to shut their doors. The real estate market lost its value as well. Farmers lost their farms.
The world was flat even in the 1830s. The United States was part of international trade. When American banks began to have trouble, these foreign banks and investors required payment in stable monies. The U.S. banks felt the pinch again.
Just prior to the Panic of 1837, there was an economic boom with reverberations pinging globally. China increasingly purchased opium from the British in trade for tea, silk and commodities. China also traded with the United States and paid in precious metals. This created a boom and boosted speculation. Credit was expanded in the United Kingdom and the United States by banks for trade with China.
A large portion of the United States’ expansion west was financed by British credit. When England began its own depression, and the Bank of England saw its gold and silver depleted, it tightened its lines of credit.
July 1836, President Andrew Jackson signed an executive order known as the Specie Circular, which forced payment for public lands to be made only in gold or silver. The U.S. government sold these former Native American lands to individuals who were often settlers out West. This cut down on the usage of paper money and caused it to lose value. The order helped lead to a credit crunch and the economic panic by investors.
President Jackson did pay off the national debt by selling the West; however, the means led to a bad end. Poor presidential economic decisions affect the nation negatively.
Cotton was sold to Britain, for its textile industry. It was grown on the backs of slaves in rural America’s South. Britain paid little for cotton as the British also had rising food costs and loss of incomes.
In 1836-1837, the South’s cotton producers defaulted their loans after the market was flooded with an abundance of the material from up-and-coming Egyptian and Indian growers. Cotton had lost its value.
In the same time period in the United States, wheat crops were attacked by Hessian flies, lowering the amount of grain production. This occurred during two growing seasons, thus, it raised the staple’s price.
In February 1837, a flour riot occurred in New York City; the cost of flour, a basic staple, skyrocketed from approximately $6.00 a barrel to $12.00 a barrel.
Other needed items like meat and coal for heating, rose in cost as well. Further riots were held in Baltimore, Albany and Boston.
New York City had seen tremendous population growth, due to European immigration, causing the cost of housing to rise.
300,000 New Yorkers were already unemployed. People were feeling desperate. 3,000 to 4,000 rallied together. A warehouse was broken into and flour barrels were removed to the street. Police and the National Guard were called out.
When society is experiencing financial hardship, leaning toward fear, unrest can break out.
The Flour Riot touched off the Panic of 1837. Throughout the country, citizens ran to their banks, demanding hard money for their paper currency. An economic crisis began.
A riot over necessities can lead to instability.
May 1837, banks in New York City ran out of gold and silver.
These banks had close to $100 million in losses. Around the country, banks permanently shut their doors.
Inflation and prices rose. Stocks fell. Even several states defaulted.
This led to a global financial crisis.
The economic depression lasted for almost seven years. The downward change led to further division between the North and the South, which eventually led to the Civil War.
The Panic was real. The poor and the working classes felt its ramifications the most. Children born in the 1840s were smaller than those born in the 1820s and early 1830s. (Economic Historian)
Families lost their savings. Renters were evicted. Homelessness became prevalent.
There was no government assistance. Many fell into poverty and hunger was quite common.
Faith-based charities fed the poor. Collective charities worked together by fund-raising, creating bread lines, soup kitchens, and setting up further distribution sites.
Why did Christians give food away to the hungry? They are directed to do so. The Savior, Jesus said, “For I was hungry and you gave me something to eat.” (Matthew 25:35)
Believers know that their source of income and food is not in themselves or in any man, but in God, who is their provider.
“Our Community Table” You matter. Helping others begins with just one person.
The Scripture states, “Do not put your trust in princes, in human beings, who cannot save.” (Psalm 146:3)
These are biblical principles by which Christians must live.
Today’s faith-based charities that are successful rely on unity. With unity, there is God’s favor. Zechariah wrote, “So I pastured the flock doomed to slaughter, therefore also the afflicted of the flock. And I took for myself two staffs: the one I called Favor, and the other I called Union; so I pastured the flock.” (Zechariah 11:7)
Jesus prayed, “And the glory which You gave Me I have given them, that they may be one just as We are one: I in them, and You in Me; that they may be made perfect in one, and that the world may know that You have sent Me, and have loved them as You have loved Me.” (John 17:22-23)
Jesus died so that His church, His people would be unified. Unity is obedience to the Lord.
History is cyclical. Food prices are rising. Inflation is occurring. Problems are happening in the global economic world of trade. The United States is divided. One leader blames the other. And the poor are suffering. Many of these are children.
The churches in every city must meet, organize and address these issues. It is not necessary to ask priests and pastors to lead this work. Regular people are what is needed.
Our Community Table (OCT) is a lay ministry of hundreds of people from 20 churches in Martin County, Florida. They are the helping hands of retirees, teens, working men and women, mothers, grandparents, and fathers. Together, they have fed the needy rural church 1800-1900 meals weekly for five years. Expecting growth in food insecurity, they pray and ask the Lord for help as needed. The OCT ministry is a national model for reaching the hungry.
History is cyclical, Wall Street, leading individuals and entrepreneurs are not what men must rely upon. Jesus is the pathway to life. Jesus is the Life!
Please share this through social media, particularly with other believers and in your local church.
(C) Kelly Jadon, 2025
