The Panic of 1857 is often described as the first worldwide economic crisis.
The crisis began in the United States after the failure of the Ohio Life Insurance and Trust Company in August 1857. The collapse damaged confidence in banks and railroads, whose securities had attracted heavy speculation. The failure of the SS Central America, carrying gold from California, further strained financial conditions.
The panic spread beyond the United States through international credit and trade connections. British banks faced pressure, and financial disturbances reached parts of Europe and Latin America. The resulting recession was severe, although its length and effects varied by country.
The crisis is sometimes confused with the later Panic of 1873, which also involved railroads and international finance. The 1857 panic is distinctive because historians commonly identify it as the first crisis to transmit rapidly through an increasingly interconnected world economy.