The first major financial crisis in the United States was the Panic of 1819.
The crisis followed the economic expansion that came after the War of 1812. U.S. banks had extended substantial credit, particularly for land purchases, while rising commodity prices encouraged further borrowing. When international conditions changed and cotton prices fell, borrowers struggled to repay loans.
Banks tightened credit and called in loans, causing business failures, foreclosures, and falling land prices. The Second Bank of the United States, which had been chartered in 1816, pursued stricter policies that intensified the pressure on state banks and debtors.
The Panic of 1819 helped shape American debates about banking, paper money, and public debt. It is distinct from the Panic of 1837, which occurred after a later credit expansion and a different set of political and monetary disputes.