The first major crash in the young American securities market was the Panic of 1792.
The panic developed in March and April 1792 after aggressive speculation and efforts to manipulate securities prices. William Duer and Alexander Macomb had borrowed heavily to buy government securities and bank shares, while investors also speculated in the debt of the newly formed United States.
When confidence broke, prices fell and borrowers struggled to meet obligations. The resulting credit crisis threatened banks and merchants in New York and Philadelphia. Treasury Secretary Alexander Hamilton responded by arranging purchases of government securities and encouraging banks to provide liquidity.
The episode helped establish an early precedent for federal intervention during a financial panic. It is sometimes confused with later nineteenth-century panics, which occurred in a much larger and more industrial economy. The 1792 event took place only a few years after the U.S. Constitution and the creation of the first national financial institutions.