The Panic of 1873 helped end the post-Civil War railroad speculation boom in the United States.
Railroads expanded rapidly after the Civil War, attracting heavy investment and encouraging speculative financing. In September 1873, the major banking firm Jay Cooke and Company failed after it could not sell enough bonds connected with the Northern Pacific Railway.
The failure triggered bank runs, a suspension of trading on the New York Stock Exchange, and a severe contraction in credit. Railroad companies failed in large numbers, construction slowed, and unemployment rose. The crisis spread internationally and contributed to a long period of weak prices and economic activity often called the Long Depression.
The event is sometimes confused with the later Panic of 1893, another U.S. banking and railroad crisis. The 1873 panic is also historically linked to Germany and Austria, where financial stress had already appeared earlier that year.