 “As in the case of most‭ ’‬simple‭’ ‬plans,‭ ‬the situation soon became quite complicated(McDonald,‭ ‬p‭ ‬2‭)‬.‭”  ‬However,‭ ‬their scheme was far‭  ‬from a solution and as the nation would soon find out,‭ ‬the beginning of an even larger problem.
‎ ‏	Another one of the underlying causes of this‎  ‏situation can be seen in the mass sales of land in the western United States.  As discussed earlier,‭ ‬the federal government hoped to sell its vast territories of unclaimed land. For just‭ ‬$1.25‭ ‬per acre at a minimum of‭ ‬40‭ ‬acres of land,‭ ‬they put over‭ ‬1‭ ‬million square miles of undeveloped land so that their financial troubles could be assuaged(McDonald‭)‬.  Many citizens jumped at this opportunity to‭  ‬claim wealth and fortune,‭ ‬to form farms and industries. Speculators were the first to purchase the largest tracts of land at this price before reselling their territory to settlers at higher prices. When settlers could not afford to these prices,‭ ‬They simply borrowed money from the banks that originally had funded the federal government’s war‭; ‬these state-chartered banks in turn would ask the Bank of United States(which by the end of the war had been reinstated‭) ‬to pledge these mortgages as collateral for loans.  ‭“‬In practicality,‭ ‬the Bank of the United States was loaning the speculators‭' ‬purchase money back to the banks that the speculators themselves owned.‭”  ‬This system was a delicate balance‭; ‬should the settlers fall behind on obligations to those that sold land to them,‭ ‬which they did as prices on crops declined in‭ ‬1819‭(‬Rothbard‭) ‬,‭ ‬a domino effect would take place. Since their money would be insufficient,‭ ‬the speculator’s banks‭’ ‬payment to the United States government would also be insufficient. Americans who had been using these state banks,‭ ‬with the deflation of crop prices,‭ ‬rushed to withdraw their funds‭; ‬the state banks were already strained with pressure from the Bank of the United States,‭ ‬so with this additional factor to the situation they were unable to provide the funds.  With many unable to withdraw their own funds,‭ ‬mass panic ensued over the loss of their own funds and the reduction in the circulation of money as a result of bank failures. The Panic was on its way to full swing as the American‭  ‬financial system began to collapse. 
	With the failure of the bank funds,‎ ‏one by one the entire nation‭’ ‬s economy began to collapse. Although there were laws that required all monetary sources to be backed in gold,‭  ‬private banks tended to simply issue their own banknotes without following these requirements since they were not regulated. This fraudulent method led to further problems economically.  Depositors found that their assets were rendered worthless by the failing banks that could not obtain the funds from the banknotes. Since no one could accept notes from banks no longer functioning‭ ‬,‭ ‬the amount of circulating money dropped rapidly.  Businesses could not acquire their materials or pay their workers‭’ ‬wages,‭ ‬so widespread unemployment and trade deficits became a serious issue.