Proposed Remedies
Proposed remedies included:
- increase of tariffs (largely proposed by Northern manufacturing interests).
- reduction of tariffs (largely proposed by Southerners, who believed free trade would stimulate the economy and increase demand).
- monetary expansion; i.e., restriction or suspension of specie payment.
- rigid enforcement of specie payment.
- restriction of bank credit.
- direct relief of debtors.
- public works proposals.
- stricter enforcement of anti-usury laws.
In the event, President Monroe, interpreting the economic crisis in the narrow monetary terms then current, limited governmental action to economizing and ensuring fiscal stability. He acquiesced in suspension of specie payments to bank depositors, setting a precedent for the Panics of 1837 & 1857. Although he agreed to the need for improved transportation facilities, he refused to approve appropriations for internal improvements without prior amendment of the Constitution. Monroe would aid the economy with laws like the Land Act of 1820 and the Relief Act of 1821.
By 1823, the panic had ended.
Read more about this topic: Panic Of 1819
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