Economic and Political Crises

As America’s regions developed distinct economies in the 1810s, they became more, not less, dependent on each other. Western farmers needed manufactured goods from the North; northern manufacturers needed raw cotton from the South; southern planters needed food crops from the West. The growth in trade required the expansion of commercial institutions such as banks, which forged economic links across the United States. This economic integration stimulated the economy, but interdependence also made the nation more vulnerable when financial crises hit. The panic of 1819, the nation’s first severe recession, brought economic growth to an abrupt halt. At the same time, when Missouri applied for statehood in 1819, it set off the first serious national debate over slavery.