18371776 Club
New York banks refuse gold; every institution in the city suspends specie payments
Commercial paper is now worthless at face value across Manhattan, and no floor is yet in sight for a crisis spreading from Mississippi cotton fields to counting houses.
On May 10, 1837, every bank in New York City ran out of gold and silver and refused to redeem commercial paper at face value — the moment a slow-building financial crisis became a national catastrophe. Over the next seven years, more than 40 percent of American banks failed, wages and prices collapsed, and unemployment spread from the cotton fields of Mississippi to the counting houses of Manhattan. The depression that followed would not be matched in severity until the 1930s…
