The 1893 United States stock-market crash was part of the Panic of 1893, a major banking and railroad crisis. The failure of the Philadelphia and Reading Railroad was an important early event in the panic.
Railroads had borrowed heavily during a period of rapid expansion. When railroad earnings weakened, investors questioned whether companies could repay their debts. The collapse of the Philadelphia and Reading, followed by the failure of other railroad firms, damaged confidence in banks and securities markets.
The crisis led to widespread bank failures, business closures, unemployment, and declining prices. A related run on gold reserves forced the federal government to seek emergency assistance from financiers led by J. P. Morgan. The panic also contributed to political conflict over monetary policy, especially the debate between supporters of the gold standard and advocates of silver currency.