The 1873 financial panic that began after Jay Cooke and Company failed is called the Panic of 1873.
Jay Cooke and Company, a major American bank, suspended operations in September 1873 after it could not sell enough Northern Pacific Railway bonds. The failure damaged confidence in railroad finance, an area that had attracted heavy investment and speculation. The New York Stock Exchange closed temporarily during the turmoil.
The panic spread through the United States and Europe. Bank failures, falling investment, and declining industrial activity contributed to a prolonged economic downturn. In the United States, the resulting depression is often called the Long Depression, although historians debate its exact start and end dates.
The Panic of 1873 was not simply a stock-market event. Railroad overbuilding, speculative credit, international financial connections, and the failure of the Vienna banking firm P. G. M. Bleichröder also played important roles. The episode helped shape later debates about money, banking, and regulation.