The panic of 1819

Introduction

The panic of 1819 was a result of the War of 1812. That conflict altered important aspects of the economy. Manufacturing was enormously stimulated, and the difficulties in acquiring money to finance the struggle led to a proliferation of banks (sanctioned by state governments) outside of New England; the number in the country rose from 88 in 1811 to 392 in 1818. Congressional leaders responded to the financial experience of the war by chartering a new national bank, the second Bank of the United States (BUS), in 1816. At the same time foreign trade was readjusting to peacetime ...