The U.S. financial panic that began after the failure of Ohio Life Insurance and Trust Company in 1857 was the Panic of 1857.
Ohio Life’s failure in August exposed risky lending and speculative practices. The collapse damaged confidence, and a major run on banks followed in September when the New York branch of the Ohio Life firm failed. Railroads, land companies, and other businesses were especially vulnerable because they had expanded rapidly with borrowed money.
The crisis spread beyond the United States through international financial connections. The New York Stock Exchange temporarily suspended trading, and many banks stopped redeeming deposits in specie. The downturn also harmed commerce and employment.
The panic is sometimes confused with the Panic of 1837 or the Panic of 1873. Its timing was especially significant because it occurred shortly before the American Civil War, though historians distinguish the financial crisis from the later wartime economy.