The Panic of 1873 helped end the railway investment boom and trigger the Long Depression.
The panic began in the United States after the investment bank Jay Cooke and Company failed on September 18, 1873. The firm had heavily promoted bonds for the Northern Pacific Railway, and its collapse undermined confidence in railroad finance. The New York Stock Exchange closed for the first time in its history, from September 20 to September 29.
The crisis spread through financial markets in the United States and Europe. Railroads failed, banks and businesses collapsed, and unemployment rose. In the United States, the resulting prolonged period of weak growth is often called the Long Depression, although historians differ over its exact dates and severity.
The panic also exposed the risks of rapid railway expansion financed by speculation and debt. It is sometimes confused with the Panic of 1893, another major U.S. financial crisis that also involved railroad failures and bank distress.