Discuss the Panic of 1819

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The Answer is During the first half of the nineteenth century, the United States became a more market-driven society, with increasingly rapid communications and transportation. At the same time, Americans were on the move, settling western lands and building railroads to connect the new settlements with eastern cities. The South was booming as well, becoming Europe's principal supplier of cotton. With these developments, many Americans felt they were destined to reap continued economic success.Such optimism did not last. In 1819, global demand for American agricultural production (particularly cotton)plummeted, in part because of Europe's recovery after the end of the Napoleonic Wars in 1815. At the same time, the Second Bank of the United States tightened credit, due to fears about overinvestment in factories and land. With fewer people buying American goods and with credit tightened, the United States entered its first major economic depression. Land values tumbled across the nation, and the demand for goods and foodstuffs slackened. All but two banks south and west of Pennsylvania failed. Thousands of people declared bankruptcy or were sentenced to debtors' prison.The Panic of 1819 deeply affected the average American. Farmers in the West were particularly hard pressed. Having bought their farms on credit, many could not make their payments, and banks foreclosed the loans. In desperation, people turned to their state governments, demanding financial assistance during these tough times. In Kentucky and other states, voters agitated in vain for the government to declare a moratorium on the collection of debts. In general, Americans began to feel that the government should protect its constituents from economic disaster and, more importantly, from the topsy-turvy nature of a market-based economy.

Discuss the Panic of 1819

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