The 1792 U.S. financial crisis sparked by William Duer’s failed speculation and a credit squeeze is called the Panic of 1792.
The crisis began after speculators, including Duer and Alexander Macomb, borrowed heavily to buy government securities. When they could not meet their obligations, confidence weakened and lenders demanded repayment. The resulting shortage of credit caused securities prices to fall sharply in New York and Philadelphia.
The newly established Bank of the United States and Treasury Secretary Alexander Hamilton helped contain the panic. Hamilton supported banks by purchasing securities and encouraging the Bank of the United States to provide liquidity. These actions helped restore confidence in the young American financial system.
The Panic of 1792 is sometimes confused with later U.S. panics because it occurred before a modern stock exchange existed. It was an early example of how leveraged speculation and forced selling could spread through financial markets.