The Panic of 1819 was the U.S. financial crisis that followed the War of 1812 and became the country’s first major economic panic.
After the war, land speculation, easy credit, and rising cotton prices encouraged rapid expansion. The Second Bank of the United States later tightened credit and called in loans, while falling commodity prices weakened borrowers and banks. The result was widespread bank failures, foreclosures, unemployment, and falling land values.
The crisis was especially severe in western and southern states, where many people had borrowed to buy frontier land. It also contributed to political opposition toward the national bank. The Panic of 1819 is sometimes confused with the Panic of 1837, another major U.S. crisis linked to banking, land speculation, and monetary policy, but the two events were separated by nearly two decades.