Panic of 1792

The Panic of 1792 was a financial credit crisis that occurred during the months of March and April of 1792, precipitated by the expansion of credit by the newly formed Bank of the United States as well as by rampant speculation on the part of William Duer, Alexander Macomb and other prominent bankers. Duer, Macomb and their colleagues attempted to drive up prices of US debt securities and bank stocks, but when they defaulted on loans, prices fell causing a bank run. Simultaneous tightening of credit by the Bank of the United States served to heighten the initial panic. Secretary of the Treasury, Alexander Hamilton, was able to deftly manage the crisis by providing banks across the Northeast with hundreds of thousands of dollars to make open-market purchases of securities, which allowed the market to stabilize by May of 1792.