The US financial crisis that began in 1819 after falling cotton prices and tight credit was the Panic of 1819.
The crisis followed years of land and commodity speculation after the War of 1812. Banks had expanded lending, often accepting land or commodities as security. When the Second Bank of the United States tightened credit and commodity prices fell, borrowers struggled to repay loans. Cotton prices were especially important because cotton was a major export and collateral source.
Bank failures, foreclosures, unemployment, and falling land prices spread across the country. The downturn lasted several years and caused severe hardship for farmers, merchants, and workers. It also damaged public confidence in banks and intensified political arguments about the role of the national bank.
The Panic of 1819 is commonly described as the first major financial crisis in the United States. It should not be confused with the Panic of 1837, which followed a later speculative boom and helped produce another long depression.