The 1847 British stock-market crash associated with the collapse of railway speculation was called the Panic of 1847.
British railway shares had surged during the railway mania of the mid-1840s, encouraging heavy borrowing and ambitious infrastructure projects. When expectations weakened, railway securities fell sharply. The damage spread through banks and merchants, while failures of financial firms increased pressure on the banking system.
A key turning point came when the Bank of England’s reserves became dangerously low. The government suspended the Bank Charter Act of 1844, allowing the Bank to issue notes beyond the usual statutory limit. The panic then eased as confidence returned and the Bank’s emergency capacity became clear.
The event is sometimes described simply as a railway crash, but the broader Panic of 1847 included a banking and credit crisis. It also helped shape later debates about whether strict monetary rules should be relaxed during systemic emergencies.