The collapse of the Philadelphia and Reading Railroad helped trigger the Panic of 1893.
The railroad entered receivership in February 1893, adding to worries about overbuilding, weak investment, and fragile financing. The crisis intensified after the National Cordage Company failed in May. A wave of bank and business failures followed, while investors sold securities and confidence in the financial system deteriorated.
The panic became one of the most severe economic crises in the United States before the Great Depression. It contributed to a major depression, high unemployment, falling prices, and serious distress among farmers and industrial workers. The crisis also became entangled with debate over U.S. monetary policy and the gold standard.
The Panic of 1893 is often confused with the Panic of 1873, another crisis strongly associated with railroad speculation. The later panic was also distinct from the Panic of 1907, which helped motivate the creation of the Federal Reserve System.