Panic of 1837
1837 – 1843
The Panic of 1837 was greatly fueled by the down-trodden confidence that the American people had at the time for paper currency, which was just becoming prevalent around this time in the U.S. This caused a huge downturn in the American economy as banks failed and confidence plummeted.
Speculation markets were drastically affected, because American banks had basically stopped paying in gold and silver coinage, and were moving toward paper and other sources of currency. So, when people realized they would receive paper money instead of their actual gold and silver, they panicked.
Confidence in the American Banks spiraled to the point where many of them failed. This downturn showed how confidence in the bank can play a vital role in uplifting or dragging down the economy of any country. Confidence of consumers and workers plays more of a role than most people might think.