During the Panic of 1893, which U.S. railroad bankruptcy helped trigger the financial crisis?

During the Panic of 1893, the bankruptcy of the Philadelphia and Reading Railroad helped trigger the financial crisis.

The railroad, commonly called the Reading, entered receivership in February 1893 after years of debt, competition, and financial strain. Its failure undermined confidence in railroad securities and contributed to pressure on banks and investors. The panic spread through the economy as businesses failed and depositors sought cash.

The crisis also involved the collapse of the National Cordage Company, falling railroad prices, and dwindling U.S. gold reserves. The United States entered a severe depression, with high unemployment and widespread business failures. President Grover Cleveland later supported a controversial bond issue to replenish the Treasury’s gold reserves.

The Panic of 1893 is sometimes confused with the Panic of 1873, another crisis strongly associated with railroad speculation. The two events were separate, although both demonstrated how heavily the nineteenth-century economy depended on railroad finance.