, United States (USA) (American Colonies)
The Panic of 1819 - A combination of bad banking practices; too much land speculation and competition from Europe caused the United States to enter its first economic depression.
In 1819 a financial panic swept across the country. The growth in trade that followed the War of 1812 came to an abrupt halt. Unemployment mounted, banks failed, mortgages were foreclosed, and agricultural prices fell by half. Investment in western lands collapsed...
The panic had several causes, including a dramatic decline in cotton prices, a contraction of credit by the Bank of the United States designed to curb inflation, an 1817 congressional order requiring hard-currency payments for land purchases, and the closing of many factories due to foreign competition...
By 1823 the panic was over. But it left a lasting imprint on American politics. The panic led to demands for the democratization of state constitutions, an end to restrictions on voting and office holding, and heightened hostility toward banks and other "privileged" corporations and monopolies. The panic also exacerbated tensions within the Republican Party and aggravated sectional tensions as northerners pressed for higher tariffs while southerners abandoned their support of nationalistic economic programs...
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