In the early 1830s, the United States experienced a short period of expansion and a prosperous economy. Land sales, new taxes, such as the tariff of 1833, and newly built railroads brought a lot of money to the government; never before in the history of the country has the government experienced a surplus from its national bank. By 1835, the government was able to accumulate enough money to pay off its national debt. Much of the country was pleased with this newly accumulated wealth, but President Jackson, before leaving office in 1836, issued what is known as a Cash Circular. Many local and state governments liked to save cash, or gold and silver, and use paper money to handle transactions. President Jackson, in his Specie Circular, declared that the Treasury was no longer authorized to accept paper money as payment for the sale of land and the like. Most, if not all, of the country did not like this and as a result many banks restricted credit and stopped lending. The effects of Jackson's Specie Circular took effect in 1837, when Martin van Buren became president. All the investors became frightened and, in 1837, tried to withdraw all their money at once. Soon after, unemployment and riots broke out in many cities, and continued expansion of the railroad ceased. The impact of the panic was profound. The entire nation was affected by panic, particularly in Connecticut, New Jersey, and Delaware, which experienced the most tension in their merchant districts. New York alone reported a loss of almost $100,000,000 in two months. However, the South suffered even more than the East. The panic caused a renewed interest in various crops in Virginia, North Carolina and the South...... middle of paper ...... an Buren said he would keep the circular on Jackson species. Within a week, on May 10, the Panic of 1837 broke out in New York, with banks refusing to redeem for cash. It turned out that no bank had any hard cash. Van Buren and his successor, President William Henry Harrison, were unable to resolve the depression. On June 8, 1840, a bill was passed in the Senate providing for the repeal of the Independent Treasury Act. The bill passed the House and signed by newly elected Whig President Tyler. Although the victorious Whigs repealed the Independent Treasury in 1841, they were unable to replace it with a national bank. Relaunched in 1846 by a new Democratic administration, the independent Treasury remained in operation until the creation of the Federal Reserve in 1913. Works Cited http://lehrmaninstitute.org/history/Andrew-Jackson-1837.asp