The tightening of credit and sharp decrease in farm prices led to the Panic of 1819.
The Panic of 1819 was the first major financial crisis in the United States. It was caused by a combination of factors including overspeculation in land, a drop in demand for American goods overseas, and a tightening of credit by the Second Bank of the United States. This led to a sharp decrease in land prices, bankruptcies, and a general economic depression that lasted for several years.
The Panic of 1819 had a profound impact on American politics and economics. It led to the emergence of new political parties, including the Democratic Party, and a greater emphasis on economic regulation and government intervention in the economy. It also had a significant impact on the development of the American West, as many farmers and settlers were forced to leave their land and move westward in search of new opportunities.