The severe U.S. financial crisis that began in 1893 after major railroad failures was the Panic of 1893.
The panic followed the collapse of the Philadelphia and Reading Railroad in February 1893 and the bankruptcy of the National Cordage Company in May. These failures weakened confidence in banks and businesses, prompting depositors to withdraw funds and investors to sell securities. The crisis contributed to a major contraction in the U.S. economy.
A key pressure was the debate over silver-backed currency. The Sherman Silver Purchase Act of 1890 required the federal government to buy large quantities of silver, and concerns about the nation’s gold reserves intensified financial uncertainty. The panic eventually led President Grover Cleveland to support repealing that act.
The Panic of 1893 is sometimes confused with the later Panic of 1907, which also involved bank runs and a sharp loss of confidence. The 1893 crisis helped begin a severe depression that lasted for several years and caused widespread unemployment and business failures.