The 1857 financial crisis that began with the Ohio Life Insurance and Trust Company collapse is called the Panic of 1857.
Ohio Life’s failure in August 1857 exposed questionable railroad and land investments, helping trigger a wider loss of confidence. The collapse came after years of rapid expansion tied to railroads, western land speculation, and easy credit. When confidence broke, banks restricted lending and businesses failed.
The panic affected the United States and disrupted international finance, although its effects varied by region. A famous event associated with the crisis was the suspension of specie payments by many banks, meaning they stopped exchanging banknotes for precious-metal money. The panic is distinct from the later Panic of 1873, which was closely linked to railroad financing and the failure of Jay Cooke & Company.