The Panic of 1873 began after the Vienna Stock Exchange crash and spread across Europe and the United States.
On May 9, 1873, the Vienna Stock Exchange suffered a major collapse, an event remembered in German-speaking countries as the Gründerkrach. The crash followed years of speculative investment and rapid railway and property development. Financial failures soon spread through interconnected European markets.
The United States experienced its own severe financial shock later in 1873. Jay Cooke & Company, a major financier of railroad construction, failed in September, contributing to a suspension of trading on the New York Stock Exchange. Railroad bankruptcies and contraction of credit then helped produce a long economic depression.
The panic’s causes were international and complex. Excessive railway speculation, falling asset values, banking problems, and monetary changes all played roles. Some histories call the U.S. downturn the Long Depression, although the term and its starting date are debated.