The collapse of Jay Cooke and Company helped trigger the Panic of 1873.
Jay Cooke and Company was a major U.S. investment bank that had financed railroads, especially the Northern Pacific Railway. When the firm failed in September 1873, confidence in railroad securities and banks deteriorated rapidly. The New York Stock Exchange closed temporarily as the financial shock spread.
The panic was part of a broader international downturn often called the Long Depression. Overbuilding, falling railroad profits, speculative investment, and tight credit all contributed. The crisis affected Europe as well as the United States, although historians debate the exact boundaries and severity of the depression that followed.
The event is sometimes confused with later U.S. panics because all involved bank failures and stock-market declines. Its distinctive association is the failure of Jay Cooke and Company and the railroad-finance collapse of 1873.