The 1792 financial crisis that prompted Alexander Hamilton to create the first U.S. market-support measures was the Panic of 1792.
The panic struck in March and April 1792 after rapid speculation in securities issued by the new United States government. Speculators, including William Duer, borrowed heavily to buy government debt, while rumors and attempted market manipulation undermined confidence. Falling prices made it difficult for borrowers to repay loans, threatening banks and merchants in New York and Philadelphia.
As Treasury secretary, Hamilton responded by arranging government purchases of securities and encouraging banks to provide liquidity. His actions helped stop the collapse and established an early example of federal intervention in a financial crisis. The episode is sometimes confused with the Panic of 1796–1797, which had different immediate causes and spread more broadly through Atlantic credit markets.
The panic was important because it exposed the fragility of America’s young financial system only a few years after the Constitution took effect. It also strengthened Hamilton’s role in shaping national financial policy.