The Panic of 1873 marked the beginning of the Long Depression in the United States and Europe. The crisis began after speculative investment in railways and property collided with banking failures.
In the United States, the collapse of the investment firm Jay Cooke & Company in September 1873 helped trigger widespread fear. The firm had heavily promoted Northern Pacific Railway bonds, and its failure led to a suspension of trading on the New York Stock Exchange.
The depression that followed involved falling prices, bankruptcies, unemployment, and prolonged weakness in industrial economies. Historians debate the exact duration and naming of the downturn, but the 1873 panic is widely treated as its starting point.
It is distinct from the Panic of 1893, another major U.S. financial crisis linked to railroad speculation and banking failures. Both episodes involved railways, which is a common source of confusion.