The severe downturn that followed 1873 railroad speculation is known as the Long Depression.
The crisis began with financial panics in Europe and the United States, including the failure of the Vienna bank Krach and the collapse of Jay Cooke & Company in the United States. Railroad construction had attracted heavy investment, and many companies depended on continued borrowing and rising asset values. When confidence failed, credit contracted and businesses struggled.
The Long Depression lasted from the 1870s into the 1890s, although its timing and severity differed between countries. Prices generally fell, industrial production slowed in some regions, and unemployment and labor conflict increased. The United States experienced the Panic of 1873 and a major recession, while Britain endured a long period of weak growth.
The term can cause confusion because the downturn was not uniformly depressed everywhere or every year. Some industries, including steel and electrical manufacturing, expanded during parts of the period. Historians therefore debate its exact dates and whether “depression” should be understood as a price decline, an output crisis, or both.