The 1873 financial crisis that began a prolonged depression in the United States and Europe was the Panic of 1873.
The panic followed speculative expansion in railroads, property, and finance. In the United States, the failure of the investment firm Jay Cooke & Company in September 1873 helped trigger a banking crisis and a suspension of trading on the New York Stock Exchange. European markets were also affected, especially after the collapse of Vienna’s stock-market boom earlier that year.
The resulting downturn is often called the Long Depression. It included falling prices, business failures, unemployment, and years of weak investment. The label can be confusing because some historians reserve “Great Depression” for the crisis beginning in 1929, while others use “Long Depression” for the late nineteenth-century slump.
The panic also exposed the risks of railroad overbuilding and highly leveraged speculation. Recovery was uneven, and financial stress returned in later panics, including those of 1884 and 1893.