|With the successful elimination of the National Bank, state banks rapidly increased their loans and the amount of money in circulation. From January 1835 to December 1836, the value of bank notes in circulation rose from $82 million to $120 million. The number of banks in the Union jumped from 329 in 1829 to 788 in 1837. Prices increased overall, while land speculation skyrocketed.
Jackson passed the Specie Act in 1836, allowing the sale of land only to those who could pay in gold money. Although the Specie Act dampened speculation, it did not stop it. In May 1837, a run on banks occured in Europe. This called the British bankers to call their American loans, and this decreased the price of Ameican cotton. A large cotton firm then failed in New Orleans. Prices dropped throughout the country and soon banks in New York failed. The country fell into severe depression. Employers laid off thousands of workers, and when coal supplies failed in the winter of 1838 people froze to death in the cities.