The Panic of 1819 is widely regarded as the first major financial crisis in the United States.
The crisis followed the end of the War of 1812 and a sharp expansion of bank lending, land speculation, and cotton exports. When commodity prices fell and the Second Bank of the United States tightened credit, many state banks suspended specie payments. Businesses failed, land prices collapsed, and unemployment rose.
The panic was especially severe in western and southern states, where speculative land purchases had been financed with easy credit. Foreclosures forced many settlers and investors into bankruptcy, while the downturn also hurt manufacturers and merchants in the East.
The Panic of 1819 is sometimes confused with the Panic of 1792, an earlier but shorter credit crisis associated with Alexander Hamilton's financial system. It also differs from the Panic of 1837, which followed another large expansion of banking and land speculation.