The 1819 U.S. financial panic was called the Panic of 1819, the country’s first widespread peacetime economic crisis.
After the War of 1812, easy credit and rising prices encouraged land speculation. The Second Bank of the United States tightened lending and demanded repayment, while falling cotton and commodity prices weakened borrowers. Banks failed, foreclosures increased, and unemployment spread across the country.
The crisis especially hurt western farmers and land buyers, who had purchased property with borrowed money. It also damaged confidence in banks and helped shape later political disputes over banking and monetary policy.
The Panic of 1819 is sometimes confused with the Panic of 1837, another major U.S. downturn. The 1819 event preceded the 1825 British panic and was closely tied to postwar credit contraction and a collapse in land values.