The 1819 United States financial crisis that followed a wave of bank failures was the Panic of 1819.
The crisis was the first major peacetime financial crisis in the United States. After the War of 1812, land speculation, easy credit, and rapid expansion encouraged banks and borrowers to take on substantial risks. The Second Bank of the United States later tightened credit, while falling cotton prices reduced farmers’ ability to repay loans.
Bank failures, foreclosures, and unemployment spread through much of the country. Farmers and businesses that had purchased land at high prices were especially vulnerable when prices declined. The downturn also intensified political arguments about banking, debt relief, and the role of the federal government.
The Panic of 1819 is sometimes confused with the Panic of 1837, another major American crisis driven partly by land speculation and banking problems. The earlier panic helped shape American distrust of concentrated banking power and influenced later debates over the national bank.