Causes
Some causes include the economic policies of President Andrew Jackson who refused to renew the charter of Second Bank of the United States, resulting in the withdrawal of government funds from that bank. Martin Van Buren, who became president in March 1837, (and later helped the panic come to an end with his system of bonds) five weeks before the Panic, was blamed for the Panic. His refusal to involve the government in the economy was said by his opponents to have contributed to the damage and duration of the Panic. Jacksonian Democrats blamed the banks' irresponsibility, both in funding rampant speculation and in introducing paper money inflation. This was caused by banks' issuing excessive paper money (unbacked by bullion reserves), leading to inflation.
Others take a different view, blaming a combination of the Second Bank of the United States, Mexico's issuance of debased copper coinage (which drove Mexican silver out of Mexican circulation according to Gresham's Law, and into America where it was legal tender), legal tender law, fractional reserve banking, and state government deficit spending, which dramatically increased the money and credit supply, decreased interest rates, and led to erroneous investment decisions before and up to 1837, according to the Austrian Theory of the Business Cycle.
Read more about this topic: Panic Of 1837