Panic of 1819

Essay by libbsHigh School, 12th grade December 2003

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The War of 1812 was a war fought between Britain and the United States, where the United States opposed the fact that Britain was forcing people to work on British Navy ships, blockading the European continent, and taking away many rights from them (trading rights in particular). While the United States felt they were being taken advantage of, Britain could not understand how the U.S. would not want to side with them against the French, and therefore took away these rights, blockaded, and impressed. By the end of the war, Canada had not been occupied by the United States, Washington was burned, and the Indians in the West were still strong. Therefore, the war did not really help to achieve anything very significant.

One effect of the war (during it) was that trade with foreign powers was greatly reduced, and because of this, America was forced to manufacture goods within this country.

Farm goods and land rose in price. But when the war ended and foreign imports rose, American manufacturers were facing tough competition. Another effect was that banks issuing bank notes were needed to loan money to people because of the rising prices, and when it came time for them to pay back loans to the Bank of the United States, they couldn't meet its demands, so many had to close. Therefore, combined with the new foreign trade and the financial crisis, prices of goods and food fell drastically, and for six years there was a depression (although some tariffs were imposed to protect from foreign trade and land prices did decrease for farmers).

Because of the rapid increase and then decrease in economic growth, the United States realized that anything drastic would challenge stability. Therefore, although hurried growth was tempting, it was concluded that it...