The 1837 Cotton Bubble That Broke America's Banks

In this episode of The Economic History Podcast, Lucas and Luna explore how a speculative mania for cotton and land in the 1830s led to the Panic of 1837, one of America's worst depressions. They focus on the role of President Andrew Jackson's Specie Circular — an 1836 executive order demanding gold or silver for federal land purchases — which triggered a credit crash. Lucas explains how the bubble inflated on British cotton demand and loose state banks, then popped when the Bank of England raised rates. Luna highlights parallels to modern asset bubbles, including the 2008 housing crash. Specific numbers: land sales skyrocketed from $2.5 million in 1832 to $25 million in 1836, then collapsed to $3 million in 1837. By 1839, 40% of U.S. banks had failed. The episode closes with a reflection on whether government intervention or laissez-faire is the better lesson. #PanicOf1837 #AndrewJackson #SpecieCircular #CottonBubble #BankingHistory #EconomicBubbles #LandSpeculation #MartinVanBuren #SecondBankOfTheUS #Depression #MonetaryPolicy #LaissezFaire #GovernmentIntervention #USHistory #Economics #FinancialCrisis #HistoryLesson #FexingoBusiness Keep every episode free: buymeacoffee.com/fexingo