The 1873 financial panic that began after Jay Cooke & Company failed was called the Panic of 1873.
Jay Cooke & Company, a major US investment bank, suspended operations on September 18, 1873. Its failure was closely tied to heavy financing of railroads, especially the Northern Pacific Railway, and it helped trigger a collapse in confidence and a stock-market panic.
The turmoil spread through the United States and Europe. The New York Stock Exchange closed temporarily, banks failed, railroad construction slowed, and a long economic downturn followed. In the United States, the resulting depression is often called the Long Depression, although historians debate its exact duration and severity.
The panic was not caused by Jay Cooke alone. Excessive railroad speculation, international financial stress, and the failure of the European bankhaus Bankhaus von der Heydt were also important. The event helped expose the dangers of rapid, debt-funded railway expansion.