The Panic of 1819 was the first major peacetime financial crisis and depression in the United States.
The crisis followed the economic expansion that came after the War of 1812. Banks issued large amounts of credit, land prices rose, and cotton exports supported optimism. When commodity prices fell and the Second Bank of the United States tightened lending, borrowers struggled to repay debts.
Land prices collapsed, banks failed, and unemployment and foreclosures increased. Farmers and businesses were especially affected in western and southern states, where speculation and borrowing had been widespread.
The panic is sometimes confused with the Panic of 1837, another major U.S. crisis linked to bank failures and falling prices. The 1819 downturn was earlier and helped shape public suspicion of banks and concentrated financial power.