The U.S. financial panic that began in 1819 and became the country’s first major peacetime depression was the Panic of 1819.
The crisis followed rapid land speculation, easy bank credit, and the economic disruption that came after the War of 1812. When commodity prices fell and the Second Bank of the United States tightened credit, banks called in loans and many borrowers could not pay. Land prices collapsed, businesses failed, and unemployment increased.
The panic was especially severe in western and southern states, where land purchases and agricultural exports had expanded quickly. It also damaged public confidence in banks and intensified political criticism of the Second Bank. Recovery was gradual and uneven rather than immediate.
The Panic of 1819 is distinct from the Panic of 1837, which followed another period of speculation and banking instability. It predates the better-known late-nineteenth-century crashes and is often treated as the first major financial crisis in U.S. history.