The Panic of 1819
The Panic of 1819 marked the end of the economic expansion that followed the War of 1812. It involved widespread foreclosures, bank failures, a slump in agriculture, manufacturing, and unemployment of farmers, businessmen, factory workers, artisans, mechanics, and various other skilled craftsmen.
While the language in President Monroe’s second Inaugural Address, on March 5, 1821 asserted that, the great decline in the federal revenue was a “gratifying spectacle" and nothing more than a general depression of prices. Additionally, the New York Evening Post urged legislatures not to interfere with a “natural course of events" and Representative Johnson of Virginia spoke of the crisis as if Americans were suffering from nothing more than a bad cold. His theme was “let the people manage their own affairs." The level of his laissez-faire rhetoric rose to include statements like ". . . palliatives which may suspend the pain for a season, but do not remove the disease, are not restorative of health."
The prevailing tone of the day adhered to Monroe’s strict interpretation of the crises, in which he prevailed in limiting governmental action to ensue fiscal stability as well as refusing appropriations for internal impriovements.
In the face of the burgeoning panic, Americans could only take one of two courses, either to deny that any distress existed, or face their plight with the knowledge that only their individual acts could bring about a cure.
For a closer review of the panic that ended in 1823, see the online edition of The Panic of 1819 by Murray N. Rothbard.