The severe 1873 financial downturn that triggered a long depression in Europe and North America was the Panic of 1873.
The panic followed a period of rapid railway construction, property speculation, and easy credit. In the United States, the failure of the investment firm Jay Cooke & Company in September 1873 helped trigger a loss of confidence. The New York Stock Exchange closed temporarily, an unusual step that reflected the seriousness of the crisis.
The downturn spread internationally. Germany and Austria had also experienced speculative expansion, and financial stress moved across interconnected markets. The resulting period is often called the Long Depression, although historians debate its exact dates and whether it should be compared directly with the Great Depression.
The phrase “Long Depression” can cause confusion because economic conditions varied by country and sector. The Panic of 1873 refers specifically to the financial crisis that helped begin the prolonged downturn, not to every recession of the late nineteenth century.