The Panic of 1873 was the financial panic that helped begin the Long Depression after the failure of Jay Cooke & Company.
Jay Cooke & Company, a major American investment bank, suspended operations on September 18, 1873. The firm had invested heavily in railroad finance, and doubts about railroad profitability and credit conditions weakened confidence. The failure contributed to a broader banking and market panic.
The New York Stock Exchange closed temporarily for the first time in its history, remaining shut for ten days. Railroad companies failed, bank lending contracted, and unemployment increased. In the United States, the downturn lasted for years, although historians debate its exact timing and whether “Long Depression” is the best label for the entire period.
The crisis also reflected international financial problems, including the collapse of the Vienna stock market earlier in 1873. It is sometimes confused with the Panic of 1893, another major American financial crisis. The 1873 panic showed how railroad speculation, bank leverage, and interconnected credit markets could transmit losses across an economy.