Chapter 20: James Monroe and the “Era of Good Feelings.”

James Monroe is unopposed in the 1818 election and inherits a nation for the first time free from external threats to its security and able to focus on domestic issues. Commentators declare his two terms as an “era of good feelings.”

However, Monroe soon learns that “good feelings” do not rule out domestic crises.

The first comes his way in the form of a deep financial recession which runs from 1819 to 1822. The leading cause is a predictable response to the overheated war economy, fueled by the Second Federal Bank’s failure to control the expansion of credit to support speculative investments in land, agriculture and factories.

This overlaps timewise with a decline in export crop sales after bumper years in Europe, and reduced prices on imported finished goods, pressuring margins on U.S. manufacturers. As creditors of all sorts are unable to pay back their loans, bank foreclosures begin, some banks fail, and the “real value” of paper money is in doubt.