In the spring of 1837, financial instability began to grip New York City, primarily due to rampant speculation in land and transportation infrastructure. Banks had significantly increased their issue of paper notes, leading to an excess of currency in circulation. However, a combination of factors, including rising interest rates, a collapse in the real estate market, and shrinking liquidity, created a volatile environment. On May 10, as confidence eroded, banks in New York City, such as the Bank of the United States, suspended payments in specie—coin currency, particularly gold and silver—effectively rendering their banknotes worthless. The decision was precipitated by fears of insolvency and the need to conserve dwindling cash reserves, as many depositors rushed to withdraw their funds.As the crisis unfolded, panic gripped depositors, causing mass withdrawals and prompting runs on banks throughout the city and eventually the nation. The inability to convert paper currency into gold aggravated the situation, leading to widespread distrust in financial institutions. Businesses failed, and unemployment rose sharply as the economy contracted. The panic reached its peak in the summer that year, spilling over into the agricultural sector and affecting trade, leading to a national economic depression that lasted until 1843. This crisis highlighted vulnerabilities in the American banking system and ultimately led to calls for banking reform and the establishment of more robust regulatory frameworks to safeguard against future financial collapses.