copious issues of
paper money, and the career of extravagance proceeded. The internal
trade of the country had never been so prosperous.

The era of good times came to a sudden end in 1819 when the nation was
visited by a disastrous money panic. Nearly all the specie had been
shipped abroad, and large sums of paper money had been issued, much of
it on credit of a questionable nature. The general commercial expansion
following the war had led to extensive speculation all over the
country. When the new United States Bank suddenly began a vicious and
relentless campaign against all other banks of issue in an ill-advised
effort to force them immediately to a specie basis, loans were called
in everywhere, the circulation was greatly contracted, prices fell,
manufacturers and merchants were unable to meet their obligations,
factories shut down, mercantile firms went into bankruptcy, banks
closed their doors, and business everywhere was completely prostrated.
To make matters worse, the export price of the great "money crop,"
cotton, fell from 32 cents in 1818 to 17-1/2 cents in 1820. The
provision market of the western farmers was greatly injured and thus
planter, farmer, merchant, manufacturer and banker all succumbed before
the general catastrophe.

The panic gave a sharp check to extravagance and speculation,
importations declined, prices were readjusted and business soon began
to recover. By 1823, the country seemed to have been restored to its
former prosperous state and manufacturing in particular was more active
than it had been at any time since the war.

Notwithstanding the revival of manufacturing and domestic trade, the
farmers of the grain states found themselves in distressing
circumstances. The Ohio Valley was yielding a product far in excess of
the demands that existed and each year found a large amount of
unmarketable grain left in the fields and granaries. Many foreign
nations refused admittance to American food products and though the
grain-growing capacity of the United States had increased sixfold since
1790, the annual exports of grain, meat and flour were but little more
than the average for the five years from 1790 to 1795. The plantations
of the South were drawing much of their subsistence from the northern
farms, but they were unable to absorb more than a small fraction of the
tremendous surplus that was seeking a market.

Agricultural interests sought urgently for relief. Since there was no
fore