The U.S. financial panic that began in 1819 after a sharp contraction in bank lending and land prices was the Panic of 1819.
It was the first major peacetime financial crisis in the United States. The crisis followed the end of the War of 1812, a boom in land speculation, and rapid expansion of state-chartered banks. When the Second Bank of the United States tightened credit, many borrowers could no longer meet their obligations.
Falling cotton and other commodity prices worsened the downturn. Banks foreclosed on farms and businesses, while unemployment and bankruptcies increased. The panic is often connected to the broader depression that lasted into the early 1820s.
It is sometimes confused with the Panic of 1837, another U.S. banking crisis driven by land speculation and credit contraction. The 1819 panic came nearly two decades earlier and helped shape American arguments about banking regulation and debt relief.