The Panic of 1873 was the financial crisis that began in the United States after Jay Cooke & Company collapsed.
Jay Cooke & Company, a major investment bank, failed in September 1873 after it could not sell enough bonds connected with Northern Pacific Railway financing. The failure triggered a panic, bank runs, and a suspension of trading on the New York Stock Exchange. The crisis spread internationally and contributed to a prolonged economic downturn often called the Long Depression.
Railway speculation, excessive borrowing, and monetary pressures also contributed to the crisis. The name can cause confusion because Europe experienced related financial turmoil around the same time, including the Vienna stock-market crash earlier in 1873. In the United States, however, Jay Cooke’s failure is the event most directly associated with the Panic of 1873.