The Panic of 1873 helped inaugurate the long international downturn known as the Long Depression.
The panic began in a financial environment shaped by railroad speculation, rapid expansion of credit, and unstable investment practices. In the United States, the failure of the banking firm Jay Cooke & Company in September 1873 helped trigger a wider crisis. The New York Stock Exchange closed temporarily, and failures spread through banks, railroads, and businesses. Europe also experienced severe financial disruption, especially after the Vienna Stock Exchange crash earlier that year.
The resulting downturn included falling prices, business failures, unemployment, and prolonged weakness in several industrial economies. Historians debate the exact boundaries and causes of the Long Depression, and the term can refer to different periods depending on the country. This panic is distinct from the Panic of 1893 and the Panic of 1907, which were later U.S. crises. It also predates the Federal Reserve, founded in 1913, so there was no modern central bank available to manage the emergency.