The severe U.S. financial crisis that began in 1819 was the Panic of 1819.
The crisis followed the end of the Napoleonic Wars, when international demand for American agricultural goods declined. Land prices and commodity prices fell, while banks tightened lending and demanded repayment. Many farmers, merchants, and land speculators could not meet their debts, producing widespread bank failures and business closures.
The Second Bank of the United States played an important role in the downturn by restricting credit after previously expanding it. The resulting contraction made the crisis especially painful in western and southern states, where land purchases and export agriculture had grown rapidly.
The Panic of 1819 is regarded as the first major peacetime financial crisis in the United States. It contributed to political anger over banks and debt, although the later Panic of 1837 became even more closely associated with Andrew Jackson’s banking policies.