The first major U.S. stock-market panic associated with the 1873 financial crisis was the Panic of 1873. In the United States, the crisis became acute after the failure of Jay Cooke & Company on September 18, 1873.
Jay Cooke had helped finance railroads, and its collapse undermined confidence in railroad securities and related banks. The New York Stock Exchange closed temporarily on September 20, 1873, as fear and selling spread through the financial system.
The panic was part of a larger international downturn that began with financial stress in Europe, including the collapse of the Vienna stock market in May 1873. In the United States, railroad overbuilding, speculative financing, and tightening credit contributed to a prolonged depression.
The crisis is sometimes confused with later panics because nineteenth-century financial disturbances were frequently named by year. The Panic of 1873 is especially important because it exposed how dependent banks, railroads, and securities markets had become on one another.