[89]

Panic of 1819
Two years into his presidency, Monroe faced an economic crisis known as the Panic of 1819, the first major depression to hit the country since the ratification of the Constitution in 1788.[93] The panic stemmed from declining imports and exports, and sagging agricultural prices[90] as global markets readjusted to peacetime production and commerce in the aftermath of the War of 1812 and the Napoleonic Wars.[94][95] The severity of the economic downturn in the U.S. was compounded by excessive speculation in public lands,[96][97] fueled by the unrestrained issue of paper money from banks and business concerns.[98][99] Monroe lacked the power to intervene directly in the economy, as banks were largely regulated by the states, and he could do little to stem the economic crisis.[100]
Before the onset of the Panic of 1819, some business leaders had called on Congress to increase tariff rates to address the negative balance of trade and help struggling industries.[101] As the panic spread, Monroe declined to call a special session of Congress to address the economy. When Congress finally reconvened in December 1819, Monroe requested an increase in the tariff but declined to recommend specific rates.