The Panic of 1893 was a major U.S. financial crisis that caused severe stock-market declines, bank failures, and a prolonged depression.
The crisis began after the collapse of the Philadelphia and Reading Railroad and intensified when the National Cordage Company failed. Investors and depositors became alarmed, while doubts about the federal government’s silver policy weakened confidence in the dollar and the banking system.
More than 500 banks failed during the crisis, according to commonly cited historical estimates, and unemployment rose sharply. Railroad bankruptcies were especially important because railways had attracted huge amounts of borrowed money and investment. The downturn also affected Europe and international capital flows.
The Panic of 1893 is distinct from the Panic of 1873 and the Panic of 1907. It was not one isolated exchange session but a broad financial contraction that lasted through much of the 1890s.