The financial panic that began with the collapse of Jay Cooke & Company in 1873 was the Panic of 1873.
Jay Cooke & Company, a major American investment bank, failed on September 18, 1873. The firm had heavily promoted bonds for the Northern Pacific Railway, and confidence broke when investors questioned the railroad’s prospects and financing. The failure helped trigger a run on other financial institutions and forced the New York Stock Exchange to close temporarily.
The panic developed during a wider international downturn linked to railroad speculation, falling commodity prices, and banking weaknesses. In the United States, the resulting depression lasted for years and brought business failures, unemployment, labor unrest, and a long decline in investment. Europe experienced related financial stress, particularly after the Vienna Stock Exchange crash earlier in 1873. The event is sometimes called the Long Depression in the United States, though historians debate how that label should be applied internationally. Its legacy included tougher scrutiny of railroads, banks, and speculative credit.