The Panic of 1873 began in 1873 and became a major international financial crisis. In the United States, the failure of the investment firm Jay Cooke and Company in September helped trigger a collapse in confidence and a suspension of trading on the New York Stock Exchange.
The panic followed an era of aggressive railway construction and speculation. Railroads required large amounts of borrowed money, and investors had assumed that continued expansion would generate reliable profits. When financing became harder to obtain and railroad earnings disappointed, investors reassessed the value of railway securities. The crisis also affected banks, businesses, and employment.
The downturn spread beyond the United States. European financial stress was connected with events including the failure of the Vienna banking firm Gebrüder Rotschild and the speculative excesses associated with railroad development. The resulting long depression is sometimes called the Long Depression, although historians debate its timing and severity. It should not be confused with the Panic of 1893, another U.S. financial crisis.