Panic Of 1837 Causes

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International Causes and Effects of the Panic of 1837 Introduction In most United States’ history books, the Panic of 1837 may only take up to a page to cover. The summary of those couple paragraph could be summed up in President Andrew Jackson not renewing the charter for the Bank of the United States leading to the loss of confidence in the United States economy. When asked about the history regarding the Panic of 1837, Peter Temin, economic historian and Gray Professor Emeritus of Economics at MIT, wrote, “Despite its universal acceptance, this story will not stand close scrutiny; it is negated by the extant data of the 1830’s” (Monaco, 2014). According to Temin, it is necessary to look at complex international situations in which the United…show more content…
This was caused by imports of silver from Mexico and partially by imports of gold from Europe. It is worth noting that the United States had been importing silver and gold from these countries, respectively, and sending these over to China for imports. What had changed during the Jackson Presidency was Britain’s introduction of opium grown in their Asian subsidiaries to the Chinese market. With opium being as addictive as it is, the Chinese needed a way to pay the British to feed their addiction. With Americans selling large quantities of cotton to the British, bills of exchange claims began to grow, making cotton importers in England responsible for paying the United States’ cotton producers. The United States realized that they no longer had to ship gold and silver over to China, but instead substituted the bills of exchange. This gave the Chinese a great way to pay for their opium: the British opium merchants received their payment promises from the British cotton importers. This resulted in the Mexican silver being imported into the United States began to grow within the United States’ monetary base (Sylla, 2001). About this, Temin wrote, “It would not be too misleading to say the Opium War was more closely connected to the American inflation than the Bank War between Jackson and Biddle” (Sylla,…show more content…
Had this been the only cause, foreign importers would have stopped buying American over-priced products causing a specie outflow from the United States. This was not the case, because foreign investors, especially British investors, were infatuated with potential returns from the United States’ bonds, stocks, and other investor opportunities in the United States. Because of this, foreign investors were willing to overlook the United States’ trade deficit to keep the boom going longer than it should have naturally (Sylla,

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