New York banks stopped exchanging banknotes for gold and silver. British banks became concerned about speculation in America and tightened credit. Their investors demanded repayment of the debts. Cotton exports, which generated much of the nation’s foreign earnings, collapsed. The Panic of 1837 was now in full swing. It upended daily life on the streets of Lower Manhattan into the 1840s.

On the evening of December 16, 1835, the temperature fell fast, and high winds whipped across downtown Manhattan. A night watchman in the Financial District smelled smoke and found it at the intersection of Exchange and Pearl Streets. The fire spread from a large warehouse and tore through Lower Manhattan. Frigid winds stoked the fire. Thick ice covered the East River, the primary water source. Water in the hoses froze.