Yes, it is true that the tightening of credit and the sharp decrease of farm prices touched off the Panic in 1819.
The Panic of 1819 is the economic disaster characterized by the speculative balloon bursting resulting to a mass of debts behind. In the beginning of the crisis, the congress tried its best to beat and even lessen the disaster by tightening credit but tightening the credit and recalling loans only led the economy over the edge making it even more difficult to stand back.
