The Panic of 1893 was a U.S. financial crisis marked by widespread bank and railroad failures.
The downturn developed after years of railroad expansion, debt accumulation, and speculation. The failure of the Philadelphia and Reading Railroad in February 1893 damaged confidence, while the collapse of the National Cordage Company intensified pressure on banks and investors. Runs on banks spread, and many institutions suspended payments.
A major issue was uncertainty over the nation’s monetary standard. The Sherman Silver Purchase Act required the federal government to buy large quantities of silver, but doubts about the government’s gold reserves weakened confidence in the dollar. President Grover Cleveland later supported repeal of the act to help stabilize the currency.
The panic produced severe unemployment and business contraction. It also helped strengthen the Populist movement and made monetary policy a central issue in the 1896 presidential campaign. The crisis is distinct from the Panic of 1907, which later helped motivate creation of the Federal Reserve.