The 1819 panic was caused by the Second Bank of the United States,which called on the state banks to redeem their notes in order to acquire $4 million in specie to pay the borrowing that had been undertaken in Europe in 1803 to finance the Louisiana Purchase.

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The Panic of 1819 was caused by a variety of factors including the contraction of credit by the Second Bank of the United States in an effort to control inflation, not specifically to acquire specie for the Louisiana Purchase borrowing. The Louisiana Purchase was financed in 1803, well before the Panic of 1819, and its financing did not directly trigger the panic.

The 1819 Panic Was Caused by the Second Bank of the United