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Panic of 1837[edit]
Main article: Panic of 1837
Painting of Van Buren by Henry Inman, c. 1837–1838
The modern balaam and his ass, an 1837 caricature placing the blame for the Panic of 1837 and the perilous state of the banking system on outgoing President Andrew Jackson, shown riding a donkey, while President Martin Van Buren comments approvingly
When Van Buren entered office, the nation's economic health had taken a turn for the worse and the prosperity of the early 1830s was over. Two months into his presidency, on May 10, 1837, some important state banks in New York, running out of hard currency reserves, refused to convert paper money into gold or silver, and other financial institutions throughout the nation quickly followed suit. This financial crisis would become known as the Panic of 1837.[153] The Panic was followed by a five-year depression in which banks failed and unemployment reached record highs.[154]
Van Buren blamed the economic collapse on greedy American and foreign business and financial institutions, as well as the over-extension of credit by U.S. banks. Whig leaders in Congress blamed the Democrats, along with Andrew Jackson's economic policies,[153] specifically his 1836 Specie Circular. 