7. The Panic of 1837 saw a seven-year-long American economic recession begin, with as much as 25 percent of the population rendered unemployed due to the rise of interest rates
Following a period of economic expansion during the mid-1830s, in large part due to rising prices of land, cotton, and slaves in the United States, with said expansions financed by British loans, in 1836 the Bank of England increased interest rates from three to five percent. Compelled to follow suit, American banks likewise raised interest rates and decreased the availability of loans. The knock-on effect of this increase was a collapse in the price of cotton by 25 percent between February and March 1837, upon which the southern states were economically dependent. Exacerbating the situation, in 1832 President Andrew Jackson had vetoed the rechartering of the Second Bank of the United States.
With no national bank, and with state banks lending at unsafe levels, the rise in interest rates resulted in the drying up of available capital across America. On May 10, 1837, New York banks suspended redemption of promissory notes at full face value. Kickstarting a domino effect, banks throughout the nation collapsed, businesses defaulted, and thousands were rendered destitute. Lasting for a full seven years, the recession was widespread and far-reaching, with unemployment reaching levels as high as 25 percent in some regions and the American economy only recovering well into the 1840s.