The severe U.S. financial crisis that began with widespread bank failures and deflation in 1819 is called the Panic of 1819.
It was the first major financial crisis in the United States after the War of 1812. A sharp decline in cotton and other commodity prices reduced borrowers’ ability to repay loans, while banks tightened credit and called in mortgages. The Second Bank of the United States also pursued policies that restricted lending.
The panic caused bankruptcies, falling land prices, unemployment, and foreclosures, especially in western and southern states. It is often confused with the Panic of 1837, which followed a later credit expansion and a collapse in confidence during Martin Van Buren’s presidency. The crisis helped intensify political opposition to concentrated banking power.