The severe U.S. financial crisis that began in 1819 after postwar credit expansion was the Panic of 1819.
The crisis followed the economic expansion that came after the War of 1812. Banks had issued substantial credit, land prices rose, and many buyers borrowed to purchase western property. When commodity prices fell and banks tightened lending, debtors struggled to repay loans and land values dropped.
The Second Bank of the United States contributed to the contraction by restricting credit and demanding repayment from state-chartered banks. Bank failures, foreclosures, unemployment, and business closures followed across the country.
The Panic of 1819 is often described as the first major peacetime financial crisis in the United States. It also intensified political criticism of banks and influenced later debates over federal economic policy.