3.2HIS113 - The Panic of 1819 was the first major financial...

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The Panic of 1819 was the first major financial crisis that the US economy was subjected to. This crisis situation occurred towards the end of the Era of Good Feelings in the first quarter of 19th century. The buildup of this crisis had begun with the War of 1812. In 1818, the British investors turning their attention towards the Indian subcontinent for cotton and this turned out to be a major trigger for large scale panic among the masses, which eventually resulted in economic depression in the United States. It started with drastic fall in land prices across the United States, and went for the next three years till 1822. One thing led to another, and soon enough the entire economy had come to a standstill - even before the government could figure out what was happening. Unlike the previous financial crisis which the nation was subjected to, the Panic of 1819 causes were rooted within the US economy. While the public debt of 1812 and Louisiana Purchase had its own share in causing the Panic of 1819, the most prominent cause for the same was an irresponsible banking system - with the Second Bank of the United States at its forefront, prevailing in the country during this period. In its attempt to raise money to pay off the debt which had accumulated after the War of 1812, the administration hiked the prices of goods - which, in turn, resulted in inflation. In the post-war US economy, the absence of a nationalized
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This note was uploaded on 10/16/2011 for the course HISTORY 113 taught by Professor ?? during the Spring '10 term at Thomas Edison State.

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3.2HIS113 - The Panic of 1819 was the first major financial...

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