The 1873 crisis that followed the collapse of Jay Cooke & Company was the Panic of 1873. Jay Cooke & Company, a major American investment bank, failed in September 1873 after it could not sell enough bonds connected with the Northern Pacific Railway. The failure undermined confidence in banks and railroads.
The panic began in the United States and spread internationally, contributing to a prolonged period of weak economic growth. In the United States, the resulting downturn is often called the Long Depression, although economic historians differ over the exact dates and severity of the depression. Railroad construction slowed, firms failed, and unemployment increased.
The crisis also contributed to major changes in American finance and politics. The New York Stock Exchange temporarily closed for the first time in its history, remaining shut for about ten days. The Panic of 1873 is not the same event as the Panic of 1893, which also involved railroad failures but occurred two decades later.