Question

What reform to voting procedures followed the Panic of 1819?
Which of the following was an economic event that led to an expansion of voting rights in the US?

Answer 1

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The Panic of 1819 was the first major peacetime financial crisis in the United States. It was followed by a general collapse of the American economy that persisted through 1821. The Panic announced the transition of the nation from its colonial commercial status with Europe toward an independent economy, increasingly characterized by the financial and industrial imperatives of central bank monetary policy, which made it susceptible to boom and bust cycles.

Though the downturn was driven by global market adjustments in the aftermath of the Napoleonic Wars, its severity was compounded by excessive speculation in public lands, fueled by the unrestrained issue of paper money from banks and business concerns.

The Second Bank of the United States (SBUS), itself deeply enmeshed in these inflationary practices, 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. Failing to provide metallic currency when presented with their own banknotes by the SBUS, the state-chartered banks began foreclosing on the heavily mortgaged farms and business properties they had financed. The ensuing financial panic, in conjunction with a sudden recovery in European agricultural production in 1817, led to widespread bankruptcies and mass unemployment. The financial disaster and depression provoked popular resentment against banking and business enterprise, along with a general belief that federal government economic policy was fundamentally flawed. Americans, many for the first time, became politically engaged so as to defend their local economic interests.[1]

The New Republicans and their American System[2]—tariff protection, internal improvements, and the BUS—were exposed to sharp criticism, eliciting a vigorous defense.