The severe U.S. financial crisis that began in 1873 and led to a long economic depression was the Panic of 1873.
The panic followed the failure of Jay Cooke & Company on September 18, 1873. The firm had heavily promoted bonds for the Northern Pacific Railway, and concerns about railroad finance undermined confidence in banks and investments.
The New York Stock Exchange closed for ten days, an unusually dramatic response that reflected the era’s fragile financial system. Railroad failures, bank collapses, falling prices, and unemployment followed in the United States and Europe.
In the United States, the downturn became known as the Long Depression, although historians debate its exact duration and severity. The crisis is also called the Gründerkrach in Germany, where it was associated with a speculative boom and banking failures.