The first major financial crisis in the United States is commonly called the Panic of 1819.
The crisis followed the economic expansion that came after the War of 1812. Banks had issued abundant credit, especially for land purchases, while rising commodity prices encouraged further speculation. When prices fell and banks tightened lending, borrowers defaulted and many banks suspended payments.
The Second Bank of the United States contributed to the contraction by demanding repayment and limiting credit. Land prices dropped, businesses failed, and unemployment rose. The downturn was particularly severe in western and agricultural regions, where debt and land speculation were widespread.
The Panic of 1819 is often confused with the Panic of 1837, another major American crisis linked to banking and land speculation. The 1819 episode came earlier and helped shape lasting debates over central banking, debt relief, and the role of government in the economy.