Editing James Monroe (section)

====Panic of 1819====

At the end of his first term of office, Monroe faced an economic crisis known as the [[Panic of 1819]], the first major depression to hit the country since the ratification of the [[United States Constitution|Constitution]] in 1788.{{sfn|Cunningham|1996|p=81}} The panic stemmed from declining imports and exports, and sagging agricultural prices<ref name="JM:DA"/> as global markets readjusted to peacetime production and commerce in the aftermath of the War of 1812 and the [[Napoleonic Wars]].{{sfn|Ammon|1971|p=462}}{{sfn|Wilentz|2004|pp=208, 215}} The severity of the economic downturn in the U.S. was compounded by excessive [[speculation]] in public lands,<ref>{{cite book|last=Rothbard|first=Murray|year=1962|
title=The Panic of 1819: Reactions and Policies|page=12|publisher=Columbia University Press|location=New York|url=http://mises.org/rothbard/panic1819.pdf}}</ref>{{sfn|Dangerfield|1965|pp=82, 84, 86}} fueled by the unrestrained issue of paper money from banks and business concerns.{{sfn|Wilentz|2004|p=206}}{{sfn|Dangerfield|1965|p=87}} 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.<ref>{{harvnb|Unger|2009|pp=296–297}}</ref> As a result, cuts had to be made to the state budget in the following years, primarily affecting the defense budget, whose growth to over 35% of the total budget in 1818 had already shocked the conservative republicans.<ref>{{Harvnb|Ammon|1971|pp=470–471}}</ref> Monroe's fortification program survived the cutbacks unscathed for the time being, while the target size of the standing army was reduced from 12,656 to 6,000 in May 1819. The next year, the budget for reinforcing and expanding the forts was reduced by over 70%. By 1821, the defense budget had shrunk to $5 million, about half of what it had been in 1818.<ref name=":11">{{Harvnb|Hart|2005|pp=76–78}}</ref>

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.{{sfn|Cunningham|1996|pp=83–84}} 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.{{sfn|Cunningham|1996|pp=84–86}} Congress would not raise tariff rates until the passage of the [[Tariff of 1824]].{{sfn|Cunningham|1996|p=167}} The panic resulted in high unemployment and an increase in bankruptcies and foreclosures,<ref name=JM:DA/>{{sfn|Dangerfield|1965|pp=82, 84, 85}} and provoked popular resentment against banking and business enterprises.{{sfn|Dangerfield|1965|pp=89–90}}<ref>{{cite book|last=Hammond|first=Bray|year=1957|title=Banks and Politics in America, from the Revolution to the Civil War|url=https://archive.org/details/bankspoliticsina0000hamm|url-access=registration|
publisher=Princeton University Press|location=Princeton}}</ref>