1. The Panic of 1819 & Political Changes

2. The Panic of 1819
First major financial disaster since the ratification of the Constitution
Second Bank of the United States stopped giving out credit in an effort to control inflation
Many banks closed
Value of money deflated
Large increases in unemployment, bankruptcies, and imprisonment for debt
Most severe in the west– land speculation during postwar euphoria left many people in debt
As a result of this crisis nationalistic beliefs were shaken, political allegiances changed

3. Political Changes
Federalists had failed to adapt to the changing needs of a growing nation
Opposed the War of 1812
Presided over a secessionist convention at Hartford
Crushed in the 1816 election, ceased to be a national party and failed to elect a candidate in 1820
As the only national party, the Republicans underwent serious internal conflicts…

4. Political Changes Old Republicans New Republicans Limited government
Strict interpretation of the Constitution
Adopted more Federalist-like policies
Large army and navy
National bank was an institution originally championed by Hamilton

5. Political Changes
Political principles were severely tested and changed entirely from one decade to the next
Leaders in the Republican party would completely reverse there views on issues of tariffs, wars, and states rights
Political factions and sectional differences were becoming more and more intense…

6. ?
What was the first financial crisis our country faced since the ratification of the Constitution?
What were the immediate effects of the Second Bank refusing to offer credit to individuals and businesses?
Why did the Federalists cease to be a political party in the U.S.?
What were the fundamental differences between the “Old” and “New” Republicans?
What was becoming “more and more intense” as we continued into the mid-1800s?