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The Panic of 1819 was the first major peacetime financial crisis in the United States<ref>Ammon, 1971, p. 462, Parsons, 2009, p. 56</ref> followed by a general collapse of the American economy persisting through 1821.<ref>Rothbard, 1962, p. 1, Wilentz, 2008, p. 205-206, p. 207, p. 217, Hofstadter, 1948, p. 50</ref><ref name="mises.org">http://mises.org/rothbard/panic1819.pdf</ref> The Panic announced the transition of the nation from its colonial commercial status with Europe<ref>Dangerfield, 1965, p. 89, Parsons, 2009, p. 59</ref> toward a dynamic economy, increasingly characterized by the financial and industrial imperatives of laissez-faire capitalism.<ref>Hammond, 1956, p. 10, Hammond, 1957, p. 365</ref>

Though driven by global market adjustments in the aftermath of the Napoleonic Wars,<ref>Ammon, 1971, p. 462, Wilentz, 2008, p. 206, p. 215, Dangerfield, 1965, p. 12-13, p. 86</ref> the severity of the downturn was compounded by excessive speculation in public lands,<ref>Rothbard, 1962, p. 12, Dangerfield, 1965, p. 82, p. 84, p. 86</ref> fueled by the unrestrained issue of paper money from banks and business concerns.<ref>Malone, 1960, p. 416-417, Wilentz, 2008, p. 206, Dangerfield, 1965, p. 87</ref>

The Second Bank of the United States (BUS), itself deeply enmeshed in these inflationary practices,<ref>Malone, 1960, p. 416, Dangerfield, 1965, p. 12-13, p. 86, Wilentz, 2008, p. 206-207</ref> sought to compensate for its laxness in regulating the state bank credit market by initiating a sharp curtailment in loans by its western branches, beginning in 1818.<ref>Ammon, 1971, p. 465, p. 466, Dangerfield, 1965, p. 82-83</ref> Failing to provide metallic currency when presented with their own bank notes by the BUS, the state-chartered banks began foreclosing on the heavily mortgaged farms and business properties they had financed.<ref>Malone, 1960, p. 416-417, Hofstadter, 1948, p. 50</ref> The ensuing financial panic, in conjunction with a sudden recovery in European agricultural production in 1817<ref>Parsons, 2009, p. 59, Ammon, 1991, online source</ref> led to widespread bankruptcies and mass unemployment.<ref>Wilentz, 2008, p. 208, p. 216, Dangerfield, 1965, p. 82, p. 84, p. 85</ref>

The financial disaster and depression provoked popular resentment against banking and business enterprise,<ref>Hammond, 1957, p. 274, p. 275-276, Dangerfield, 1965, p. 89-90</ref> and a general belief that federal government economic policy was fundamentally flawed.<ref>Wilentz, 2008, p. 251-252</ref> Americans, many for the first time, became politically engaged so as to defend their local economic interests.<ref>Hofstadter, 1948, p. 51, Malone, 1960, p. 417-418</ref>

The New Republicans and their American System <ref>Schlesinger, 1945, p. 35</ref> – tariff protection, internal improvements, and the BUS – were exposed to sharp criticism, eliciting a vigorous defense.<ref>Parsons, 2009, p. 58, p. 60</ref>

This widespread discontent would be mobilized by Democratic-Republicans in alliance with Old Republicans, and a return to the Jeffersonian principles of limited government, strict construction of the Constitution, and Southern preeminence.<ref>Schlesinger, 1945, p.115, Ammon, 1971, p. 465</ref> The Panic of 1819 marked the end of the Era of Good Feelings<ref>Malone, 1960, p. 416, Dangerfield, 1965, p. 3</ref> and the rise of Jacksonian nationalism.<ref>Dangerfield, 1965, p. 88-89, p. 103, Meyers, 1953, p. 15, Remini, 1981, p. 100</ref>


Panic of 1819 sections
Intro  Post-war European Readjustments and the American Economy: 1815 - 1818  Unregulated Banking and the Imperatives of Republican Enterprise  Resurrection of the Bank of the United States  Prelude to Panic: 1816 \u2013 1818  Responses to the Crisis  Long-term Impacts  Economic interpretations  Notes  See also  References  Further reading  External links  

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Wilentz::united    States::rothbard    Panic::hammond    Their::banks    American::parsons    State::money

The Panic of 1819 was the first major peacetime financial crisis in the United States<ref>Ammon, 1971, p. 462, Parsons, 2009, p. 56</ref> followed by a general collapse of the American economy persisting through 1821.<ref>Rothbard, 1962, p. 1, Wilentz, 2008, p. 205-206, p. 207, p. 217, Hofstadter, 1948, p. 50</ref><ref name="mises.org">http://mises.org/rothbard/panic1819.pdf</ref> The Panic announced the transition of the nation from its colonial commercial status with Europe<ref>Dangerfield, 1965, p. 89, Parsons, 2009, p. 59</ref> toward a dynamic economy, increasingly characterized by the financial and industrial imperatives of laissez-faire capitalism.<ref>Hammond, 1956, p. 10, Hammond, 1957, p. 365</ref>

Though driven by global market adjustments in the aftermath of the Napoleonic Wars,<ref>Ammon, 1971, p. 462, Wilentz, 2008, p. 206, p. 215, Dangerfield, 1965, p. 12-13, p. 86</ref> the severity of the downturn was compounded by excessive speculation in public lands,<ref>Rothbard, 1962, p. 12, Dangerfield, 1965, p. 82, p. 84, p. 86</ref> fueled by the unrestrained issue of paper money from banks and business concerns.<ref>Malone, 1960, p. 416-417, Wilentz, 2008, p. 206, Dangerfield, 1965, p. 87</ref>

The Second Bank of the United States (BUS), itself deeply enmeshed in these inflationary practices,<ref>Malone, 1960, p. 416, Dangerfield, 1965, p. 12-13, p. 86, Wilentz, 2008, p. 206-207</ref> sought to compensate for its laxness in regulating the state bank credit market by initiating a sharp curtailment in loans by its western branches, beginning in 1818.<ref>Ammon, 1971, p. 465, p. 466, Dangerfield, 1965, p. 82-83</ref> Failing to provide metallic currency when presented with their own bank notes by the BUS, the state-chartered banks began foreclosing on the heavily mortgaged farms and business properties they had financed.<ref>Malone, 1960, p. 416-417, Hofstadter, 1948, p. 50</ref> The ensuing financial panic, in conjunction with a sudden recovery in European agricultural production in 1817<ref>Parsons, 2009, p. 59, Ammon, 1991, online source</ref> led to widespread bankruptcies and mass unemployment.<ref>Wilentz, 2008, p. 208, p. 216, Dangerfield, 1965, p. 82, p. 84, p. 85</ref>

The financial disaster and depression provoked popular resentment against banking and business enterprise,<ref>Hammond, 1957, p. 274, p. 275-276, Dangerfield, 1965, p. 89-90</ref> and a general belief that federal government economic policy was fundamentally flawed.<ref>Wilentz, 2008, p. 251-252</ref> Americans, many for the first time, became politically engaged so as to defend their local economic interests.<ref>Hofstadter, 1948, p. 51, Malone, 1960, p. 417-418</ref>

The New Republicans and their American System <ref>Schlesinger, 1945, p. 35</ref> – tariff protection, internal improvements, and the BUS – were exposed to sharp criticism, eliciting a vigorous defense.<ref>Parsons, 2009, p. 58, p. 60</ref>

This widespread discontent would be mobilized by Democratic-Republicans in alliance with Old Republicans, and a return to the Jeffersonian principles of limited government, strict construction of the Constitution, and Southern preeminence.<ref>Schlesinger, 1945, p.115, Ammon, 1971, p. 465</ref> The Panic of 1819 marked the end of the Era of Good Feelings<ref>Malone, 1960, p. 416, Dangerfield, 1965, p. 3</ref> and the rise of Jacksonian nationalism.<ref>Dangerfield, 1965, p. 88-89, p. 103, Meyers, 1953, p. 15, Remini, 1981, p. 100</ref>


Panic of 1819 sections
Intro  Post-war European Readjustments and the American Economy: 1815 - 1818  Unregulated Banking and the Imperatives of Republican Enterprise  Resurrection of the Bank of the United States  Prelude to Panic: 1816 \u2013 1818  Responses to the Crisis  Long-term Impacts  Economic interpretations  Notes  See also  References  Further reading  External links  

PREVIOUS: IntroNEXT: Post-war European Readjustments and the American Economy: 1815 - 1818
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