The eruption of Mount Tambora in 1815 had created the Year Without a Summer , causing European agriculture to fail that year . The link between the frontier land boom and overseas markets for staple goods was dramatically revealed in 1817 , when Europe finally recovered from its post-war harvest shortages and began producing bumper crops . American planters and farmers , who had expanded production to exploit the European demand , discovered agricultural prices declining by half , even as production increased . Southwestern plantations were devastated when Britain began to increase its imports of East India cotton as a means to avoid purchasing the high-priced US cotton . India enjoyed not only a longer growing season and lower cost of freight to Britain , but also more cotton-devoted land than the entire Louisiana Purchase . Tench Coxe , a Pennsylvanian political economist and delegate to the Continental Congress , warned of the " substantial evil " exhibited in the rivalry created by foreign competition . Coxe has been dubbed by many as the " father of the American cotton industry . " Cotton value began to waver in 1818 , threatening to burst the speculative bubble . A general contraction in lending was indicated in response to these developments in Europe
Year Without a Summer
Year Without a Summer
Panic of 1819