The Panic of 1873 helped begin the long economic downturn known as the Long Depression.
The panic started in Europe and the United States after a period of aggressive railway investment and speculative borrowing. In the United States, the failure of the banking firm Jay Cooke & Company in September 1873 triggered a loss of confidence. The New York Stock Exchange temporarily closed for the first time in its history, from September 20 to September 29.
Bank failures, falling asset prices, reduced investment, and deflation followed. The downturn affected industrial economies for years, although historians debate how long the associated depression lasted and how severe it was in different countries.
The event is sometimes confused with the Panic of 1893 because both involved railroad speculation and banking distress. They were separate crises two decades apart. The 1873 panic also helped expose the danger of financing railway expansion with excessive leverage.