US History

Expansion and Reform (1801-1861)

This collection uses primary sources to explore the Panic of 1837.

A letter from the cashier at Mohawk Bank in Schenectady, New York to William Hayes about a deposit to his account, 1834.

William Hayes was a land speculator, or someone who bought and sold land for profit, near present-day Peoria, Illinois. Mohawk Bank was located in Schenectady, New York, near where Hayes had lived earlier in his life. This letter from Mohawk Bank cashier D. Boyd to Hayes illustrates how banking practice took place largely on paper, rather than through the exchange of “real” currency. 

Transcription:

Mohawk Bank 
Sch[enectad]y Feb[ruar]y 21st, 1834

Dear Sir, 

Mr. Thomas Alexander was here this day and deposited in this Bank Three hundred and Thirty Dollars to your Credit, Money rec[eived]d by him on a Mortgage and requested us to forward a Certificate of deposit to you which I now enclose to you. Almost any Bank in your Country will give you the money on this certificate by your endorsing it--Your friends in this part of the world are all in health__

Yours very sincerely-- 
D. Boyd, Cash[ier]

Mr. Wm. Hays 
Fort Clark 
Peoria 
Illinois

A five-dollar bill issued by Kirtland Safety Society Bank of Kirtland, Ohio, 1837.

The Kirtland Safety Society Bank was founded in November 1836. Like many local banks during the 1830s, it issued its own notes, like this one, to serve its customers. However, the bank issued notes totaling far more money than it actually had in specie—gold and silver—in its vaults. Kirtland Safety Society Bank collapsed during the financial crisis of 1837 because it could not honor the currency and loans it had issued in only a few short months of existence. Notes like this one, representing money from a failed bank, are called obsolete or broken bank notes.

A revolving table tool designed to calculate interest rates, 1839.

This revolving interest table, designed by C.M. Riley in 1839, allowed people to easily calculate interest owed on amounts between one and five thousand dollars over a period of one to thirty days or two to twelve months. When European banks raised interest rates on their loans to banks throughout the US, local banks responded by raising interest rates for their borrowers. This cycle contributed to the Panic of 1837.

An excerpt from *Sylvester's Bank Note and Exchange Manual*, 1833

Issued by the publisher and former exchange broker S. J. Sylvester, this pamphlet was designed to help “business men generally” identify the difference between legitimate and fraudulent bank notes. As local banks proliferated throughout the country and their currency circulated in other states and cities, it was critical for those outside a local community to determine whether a bank’s currency could be trusted.

Excerpts from *The Pocket Cambist*, a guide for exchanging currency between countries, 1836.

A cambist is a person whose job is exchanging money or a manual with guidance for exchanging money of different national currencies. In the 1830s, the US was part of a vast system of international trade and financial exchange dominated by England as the global financial power.

A political cartoon representing negative public opinion and political opposition to the agenda of President Andrew Jackson, circa 1832.

The question of renewing the charter for the Bank of the United States was a central issue in the election of 1832. In this cartoon, various people roast Andrew Jackson, including a female figure representing justice and Jackson’s political opponents (left to right) Senator Henry Clay, Senator Daniel Webster, William B. Preston, Bank of the United States president Nicholas Biddle, and an unknown man. The figures in the foreground represent former Secretary of the Treasury William Duane and Jack Downing, a popular anti-Jacksonian fictional character. A figure representing Vice President Martin Van Buren exits at the top right. Ultimately, President Jackson vetoed the recharter of the nation’s bank despite its passage in Congress. Jackson accelerated the demise of the Bank of the United States by removing the federal government’s money and redistributing it among local, state-chartered banks.

A political cartoon issued in July 1837 that depicts a New York City street scene demonstrating the impact of the Panic of 1837.

This print illustrates the impact of economic recession in a commercial district of New York City. In the background, each business or institution and group of people interacting there suggests different ways that the recession affected the economy of the city and its residents. In the river, a ship sits idle; the almshouse and Bridewell, a debtors’ prison, are visible on the far shore. The people, goods, and signage shown in the foreground offer a more detailed view of the impact of the panic, such as a mother and child trying to negotiate a mortgage with a banker.

An excerpt from an 1834 pamphlet with arguments from New York businessmen about effects of removing federal money from the national bank.

This document records the minutes and resolutions of a group of businessmen from New York City’s second ward, which is in lower Manhattan, just north of the Wall Street financial district.

An 1841 token alluding to “hard times,” or the Panic of 1837, and targeting the policies of President Van Buren.

This is one of several “hard times” copper coins that were minted during the Panic of 1837. These coins were unofficial currency and often offered political messages about the state of the economy. One side of this coin (left) alludes to Martin Van Buren’s metallic currency “experiment.” The other side (right) anticipates the next presidential administration, presuming that it would be led by Whig Party leader Daniel Webster. Webster was ultimately not the Whig Party’s choice for the 1840 nomination; they selected William Henry Harrison, who won, but died soon after taking office. 

A receipt for the sale of twenty four bales of cotton sold on behalf of Aaron Spell, March 25, 1836.

This document and the following document are receipts for cotton sold on behalf of cotton planter Aaron Spell on two separate occasions, one before the panic, in 1836, and one during the panic, in 1840. On this receipt, the numbers in columns represent bale numbers and weights. The total weight is then multiplied by the price paid per pound of cotton, in this case seventeen cents per pound for the first group of fifteen bales, and sixteen cents per pound for the second group of nine bales. Varying sale prices may suggest that some of the cotton was better quality than the rest. The notes at the bottom of the receipt detail additional charges deducted from the total sale price, such as shipping, storage, insurance, and broker’s fees.

Transcription:

Sale 24 Bales Cotton by order and for account of Aaron Spell Esq.

Sold N N Wilkinson 
A Spell	

[Column 1 top] 
Bale 7; Weight: 440 
Bale 28; Weight 434 
Bale 14; Weight 406 
Bale 10; Weight 412 
Bale 4; Weight 492 
Bale 23; Weight 400 
Bale 17; Weight 433 
Bale 9; Weight 400 
Bale 16; Weight 378 
Bale 21; Weight 425

[Column 2 top] 
Bale 18; Weight 454 
Bale 2; Weight 423 
Bale 13; Weight 430 
Bale 8; Weight 430 
Bale 15; Weight 423

4223 [+] 2160 [=] 6383 @ 17¢ [=] $1085.11 
(Total weight from column 1 top plus total weight from column 2 top)

[Column 1 bottom] 
Bale 20; Weight 421 
Bale 19; Weight 420 
Bale 1; Weight 382 
Bale 25; Weight 411 
Bale 3; Weight 416		

[Column 2 bottom] 
Bale 26 / Weigt 420 
Bale 24 / Weight 406 
Bale 5 / Weight 455 
Bale 2 / Weight 407

2050 [+] 1688	[=] 3738 @ 16¢ [=] $598.08 
(Total weight from column 1 bottom plus total weight from column 2 bottom)

[Sum of sale prices from top and bottom columns =] $1683.19

Charges

Paid freight at $1.25 per bale...$30.00 
[Paid] River Insurance on $70 “[per bale]” [at] ¾% [+] Pol[???] $1...13.60 
[Paid River Insurance agent] fire @ ¼% [of $1683.19]... 4.21	 
[Paid] Drayage Storage Labor and Weighing @ 50 ¢ [per bale]...12.00 
Commission 2 ½...42.08 	 
[Sum of Charges =] 101.89

Net Proceeds Dollars $1581.30 
E + OE Due in cash 5 April 
New Orleans	26 March 1836 for Leigh Maddux & C.

M. Conway

A receipt for the sale of thirty bales of cotton sold on behalf of Aaron Spell, February 9, 1840.

This document and the preceding document are receipts for cotton sold on behalf of cotton planter Aaron Spell on two separate occasions, one before the panic, in 1836, and one during the panic, in 1840. The numbers in columns on this receipt represent the weight of each of the thirty bales of cotton. The total weight is then multiplied by the price paid per pound of cotton, in this case seven and a half cents per pound. The notes at the bottom of the receipt detail additional charges deducted from the total sale price, such as shipping, storage, insurance, and broker’s fees. This receipt also includes a short note to Mr. Spell added by the cotton broker, Mr. Mount.

Transcription:

Account Sales of 30 Bales Cotton received by Steamer Vicksburg, from Manchester, Miss from Charles & Mount Esqs. and sold for account and risk of Mr. Aaron Spell of Holmes County, Mississippi -- 

1840 
Feb[ruar]y 3	Sold to Kohn, Daron & Co. [c/o] Schmidt and Holland, Brokers

A.S. 30 Bales, weighing

[Column 1] 
427 
386 
445 
418 
418 
445 
461 
420 
427 
412 
Sum of column 1: 4259

[Column 2] 
375 
410 
422 
407 
472 
406 
396 
410 
386 
397 
Sum of column 2: 4081

[Column 3] 
382 
410 
395 
420 
394 
413 
423 
422 
365 
394 
Sum of column 3: 4018

Total weight: 4259 [+] 4081 [+] 4018 [=] 12358 @ 7 ½ ¢ [=] 	$926.85

Charges 
P[ai]d Freight on above at $2 per Bale...$60 
[Paid] River Insurance, valued $1200 @ 1% + pol: 75¢...12.75 
[Paid] Weighing 10¢ per Bale...3.00 
[Paid] Drayage @ 12½ ¢ [per Bale]...3.75 
[Paid] Brokerage for selling ¼% on $926.85...2.32 [Total Charges]	81.82 
[Sale price minus total charges] $845.03

Errors Accepted, New Orleans, 4 Feb[ruar]y 1840 
A.M. Nathan

[Page 2] 
Mr. A. Spell 
1840 4 Feb[ruar]y

In Acct. With A.M. Nathan 
By [???] of 30 Bl Cotton...$845.03 
less paid [account] bill charges to C.E. Mount... 18.00 
[Equals] $827.03

Eight hundred and twenty seven 03/100 Dollars 
To his credit in acct. 
New Orleans, 4th Feb[ruar]y 1840 
A.M. Nathan

Dear Sir, 
Have just returned from New Orleans and have seen Mr. Nathan who expects you to send him forty bales more, I assured him you would do all you could, and he has given me a regular power of attorney & I am fully authorised to give you any instruction you may [illegible].

You will see your cotton only sold for 7 ½ ¢, I sold mine at the same. It is still declining - if you have any in store let me know if any to send down, do it forth-with, as it will decline further. Do you know Mr. Coates’ intentions?

Sincerely y[ou]r fr[ien]d, 
[A.W.E.?] Mount 
[Bmton?] 9th Feb[ruar]y 1840 
P.S. I enclose your [bill & such] I paid [Robin? & Allen?] before I could get the cotton.

A court document recording the settlement of a debt owed by Lancaster McNay through the transfer of five enslaved women and girls, 1839.

During the Panic of 1837, as currency lost value and lenders requested payments, many people found themselves in debt with no way to pay their creditors, which sometimes resulted in the seizure of their property. This writ, or document, from the county court of Lawrence County, Alabama, authorizes the sheriffs of the state to collect a debt owed by a man named Lancaster McNay to Horatio D. Newcombe and Ezra Webb. The notation on the reverse side of the document records what was seized to settle McNay’s debt of $169.74 ¾. In this document, *teste* means the witnessing or concluding of a clause or writ (a court document) and *levy* means to collect by legal authority or to seize property.

Transcription:

The State of Alabama 
Lawrence County

To any sheriff of the state of Alabama; -- [GREYTING?]

We command you, that of the goods and chattels, lands and tenements of Lancaster C. McNay, late of your community, you cause to made the sum of one hundred and fifty dollars and 75 cents, which Horatio D. Newcombe and Ezra Webb copartners in trade under the name + style of H D Newcombe & Co. lately in our County Court of Lawrence County have recovered against the said Lancaster C. McNay for debt, also the sum of Eighteen dollars and 99 ¾ cents which to the said H D Newcombe & Co in the same court were adjudged for their damages which they have sustained as well by reason of the detention of the said debt, as for their costs in that behalf expended; whereof the said Lancaster C. McNay is convicted as appears to us of record; and that you have said moneys before the Judge of our said County Court on the third Monday in July next, to render to the said H D Newcombe & Co of their debt, damages and costs aforesaid.-- And have you this writ at the office of the Clerk of said Court three days previous to the third Monday in July next. 1839

Witness Wiley Gallaway Clerk of our said Court, at office the 12th day of February 1839 and of the Independence of the United States of America, the sixty-3rd year.

Issued the 12th day of February 1839

Wiley Gallaway CLERK

TESTE	 BILL OF COST

[Column 1]

CLERK’S FEES
Issuing Writ 	
Cop of Writ 
Entering Sheriff’s return - .12 ½ 
Docketing cause - .12 ½ 
Filing Declaration 
Entering appearance of party	- .25 
Issuing Subpoena 
Entering continuance 
Entering Order of Court - .25 
Trial, Swearing July Witnesses and recording verdict -.62 ½ 
Entering up Judgement - .18 ¾ 
Issuing Execution - .50 
Recording acknowledgement of satisfaction of Judgement,	- .12 ½ 
Making complete final record, - .50 
Taing cost and copy - .50 
[Total fees from Column 1] $3.18 ¾ 

Teste Wiley Gallaway Clerk

[Column 2] 
Clerk’s fees brought forward - $3.18 ¾ 
Attorney’s fee, - 2.00 
Jury Tax

SHERIFF’S FEES.

Serving Writ 
Returning Writ in Sheriff’s Office, 
do. do. Clerk’s do. 
Leaving Cop with defendant 
Taking Bail Bond, assigning and returning the same, 
Summoning Witness 
Empanelling Jury 
Returning Fi. Fa- in Sheriff’s Office -.12 ½ 
do. do. Clerk’s do. - .12 ½ [Total of these two lines] .25 
Half Commission for levying, 
Taking delivery Bond. 						
[Total fees from column 2] $5.43 ¾ 


[Reverse - Center]

2565 
HD Newcombe & Co vs. Fi Fa / C176 
Lancaster C. McNay

Debt - $150.75 
Dam $13.56 
Cost $5.43 ¾ 
[Total] $169.74 ¾ 

[Judgt?] Jan 21 1839

Rec[eive]d Feb. 16th 1839 
[Levied and not[e?] time] 
to sell July 12th 1839 
D F W Valliant, Sh[eri]ff 
Peters attn.

[Reverse - left perpendicular text]

Levied an five	Negroes (to wit) Mariah, a yellow woman and her three children [vis.?] Cintha, Mary & Jane and girl named Ann about 13 years old also one sorrel Horse saddle and bridle 
June 13th 1839 D F W Valliant, Sh[eri]ff

Questions

1. What can you infer from [*The Pocket Cambist*](https://dp.la/primary-source-sets/sources/1528) about the United States’ role in the global economy during this period? The guide shows slightly different exchange rates for US currency than for currency from different states and regions. What does this suggest about the state of the US banking system in the early 1830s?
2. Use the receipts for Aaron Spell’s cotton sales in [1836](https://dp.la/primary-source-sets/sources/1533) and [1840](https://dp.la/primary-source-sets/sources/1534) to identify the price per pound of cotton before and during the Panic of 1837. What does the note on the 1840 receipt reveal about the forecast for cotton sales? Consider the people and businesses that may have been directly or indirectly involved in this transaction, such as the cotton planter Aaron Spell, his brokers in New Orleans, the crew that shipped the cotton down the Mississippi River, and the enslaved laborers who likely grew and picked that cotton. How do you imagine each of these individuals or groups might have been impacted by the change in price? 
3. Using the [letter to William Hayes](https://dp.la/primary-source-sets/sources/1524), the [Kirtland Safety Society Bank currency](https://dp.la/primary-source-sets/sources/1525), and [*Sylvester’s Bank Note and Exchange Manual*](https://dp.la/primary-source-sets/sources/1527), consider the advantages and risks of exchanging funds entirely on paper, without the transfer of “real” money. In what ways is this system similar to or different from how banking is conducted today?
4. What do the [political cartoon](https://dp.la/primary-source-sets/sources/1529) depicting Andrew Jackson on the barbecue and the [“hard times” token](https://dp.la/primary-source-sets/sources/1532) about the policies of Martin Van Buren suggest about the political dimension of the Panic of 1837? How do these sources suggest the crisis influenced political rivalries and shaped party politics?
5. Do a close reading of the [political cartoon illustrating New York City ](https://dp.la/primary-source-sets/sources/1530) at the outset of the Panic. Based on the businesses, individuals, signage, and allegorical elements depicted in the image, what can you infer about the impact of the Panic of 1837 on New Yorkers? What class(es) does the artist portray as most affected by the crisis? What factors or political actors do you think the artist blamed for the crisis?
6. Use the [court document about Lancaster McNay’s debt](https://dp.la/primary-source-sets/sources/1535) to consider the impact of excessive debt on people’s lives. What does the document suggest about the ways in which financial difficulties affected more than just the lender and the borrower?
7. What arguments did the [New York businessmen](https://dp.la/primary-source-sets/sources/1531) of the second ward use to blame Jackson and his veto of the Bank of the United States for the economic crisis?

Activity

Ask students to conduct outside research about the financial crisis of 2008 to 2009, including finding primary sources such as political cartoons and news articles and/or conducting interviews with friends or family members. In small groups, have students work together to share resources and compare this recent recession to the Panic of 1837, using the sources in this set and their knowledge. Students should consider questions such as who was most severely impacted, what were the causes, who was to blame, and what was the role of the federal government in each case. Students may also explore parallels between the primary sources they find and the items in this set. For example, students might look for subprime mortgage advertising from the early 2000s to complement the [Kirtland Safety Society Bank currency](https://dp.la/primary-source-sets/sources/1525).

Using their analyses of 1837 and 2008, and the primary sources from this set and their research, ask each group to create and present a guide to avoiding economic recession. These guides could be shared as presentations, posters, or through creative expression, such as a dramatization or song/rap/spoken word interpretation.

Teaching Guide: Exploring the Panic of 1837

Resources

1. “[Panic of 1837](http://www.ohiohistorycentral.org/w/Panic_of_1837),” Ohio History Central. 
2. “[Nineteenth Century Banking and the Financial Panic of 1837](http://www.josephsmithpapers.org/articles/financial-panic-of-1837),” The Joseph Smith Papers.  
3. “[Martin Van Buren: Domestic Affairs](https://millercenter.org/president/vanburen/domestic-affairs),” Miller Center at University of Virginia.  
4. [*Checks and Balances*](http://www.moaf.org/exhibits/checks_balances/andrew-jackson/index) exhibition, “Andrew Jackson,” Museum of American Finance. 

Overview

The Panic of 1837 was a major recession in the US economy that began in the spring of 1837 and lasted until the mid-1840s. During the “panic,” also referred to as “hard times,” hundreds of banks collapsed, currency lost value as prices soared, and farmers, merchants, and business owners across the country suffered severe financial losses or ruin. 

In the early 1830s, US banks and American merchants relied heavily on trade with England and financing from British banks. In 1832, President [Andrew Jackson](https://dp.la/primary-source-sets/sets/jacksonian-democracy) vetoed the rechartering of the Bank of the United States—and to speed its demise, redistributed federal funds among smaller state banks across the country. The lack of a national bank meant little national standardization or oversight of banking practices. Hundreds of new banks opened in cities and towns across the country; many of them printed paper currency and made loans that far exceeded the value of gold and silver coinage, or specie, in their vaults. State governments, land speculators, and entrepreneurs took advantage of this financial climate by taking out loans to fund infrastructure projects, start new businesses, and buy federal land in the West as well as recently evacuated Indian land. Most of these transactions took place using various paper currencies and documentation, relying on all participants’ confidence that those documents could be redeemed for “real” money.

In 1836, however, British banks started to pull back on lending to the US. In that same year President Jackson issued the Specie Circular, an executive order mandating that federal land be purchased with specie, not paper currency. In the spring of 1837, the bubble burst. As people tried to cash in their paper money, overextended banks closed their doors and many collapsed entirely, leaving their customers with worthless currency. The panic also had political ramifications, as the Whig and Democratic parties were quick to blame each other for the financial crisis and use it as political ammunition.

This set uses primary sources to explore the financial practices that contributed to the Panic of 1837 and the impact of the crisis on America’s politics, economy, and people.

English

The Panic of 1837

panic-1837_03_a560e20356ccefb5a5d9e8a86fb32823.jpg

Courtesy of National Museum of American History, Kenneth E. Behring Center via Smithsonian.

Riley, C.M., “Patent Revolving Interest Table,” Digital Public Library of America, https://dp.la/item/a560e20356ccefb5a5d9e8a86fb32823.

A revolving table tool designed to calculate interest rates, 1839.

Cite this item

Tips for Students

Item 3 of 12 in the Primary Source Set The Panic of 1837