The severe U.S. financial crisis that began in 1893 and caused a major stock-market collapse was the Panic of 1893.
The panic developed after the failure of the Philadelphia and Reading Railroad and growing concern about railroad finances, bank reserves, and the U.S. government’s gold holdings. Investors lost confidence, banks failed, and businesses reduced lending and production. The crisis became one of the worst economic depressions the United States had experienced up to that time.
The New York Stock Exchange suffered a major decline, while railroad companies were especially vulnerable because of heavy borrowing and overbuilding. Unemployment rose sharply, and the depression contributed to widespread labor unrest, including the Pullman Strike of 1894.
The Panic of 1893 is often confused with the Panic of 1873, which preceded it by two decades and was associated with the collapse of Jay Cooke & Company. It also came before the Panic of 1907, which later helped inspire U.S. banking reforms.