The 1873 financial crisis that helped end a period of rapid railway speculation in Europe and North America was the Panic of 1873.
The crisis began in Vienna in May 1873 after the Vienna Stock Exchange crashed, and it soon spread to other financial centers. In the United States, the failure of the banking firm Jay Cooke & Company in September 1873 triggered a major panic and helped force the New York Stock Exchange to close temporarily.
Railway companies had attracted heavy investment during an era of rapid expansion. Much of the financing depended on optimistic expectations, rising land values, and easy credit. When confidence broke, railway failures and bank distress spread through the economy.
The downturn is associated with the Long Depression, a prolonged period of weak prices and slow growth that lasted, depending on the country and definition, into the 1870s or 1890s. It is distinct from the Panic of 1893, another US crisis involving railroad failures. The 1873 panic also influenced debates about monetary standards and the role of central banking.