The 1893 U.S. financial crisis that caused widespread bank failures and a severe railroad-sector collapse was the Panic of 1893.
The crisis developed after railroad overexpansion, falling confidence, and the failure of the Philadelphia and Reading Railroad. The collapse of the National Cordage Company added to fears about corporate and banking weakness. Investors converted assets into gold, placing additional pressure on the U.S. Treasury’s reserves.
More than 500 banks and around 15,000 businesses failed during the depression associated with the panic, according to commonly cited historical estimates. Unemployment rose sharply, and industrial output weakened. The downturn also contributed to labor unrest, including the Pullman Strike of 1894.
The Panic of 1893 is sometimes confused with the Panic of 1873 because both involved railroads. They were separate crises, occurring two decades apart, and the 1893 emergency had its own combination of railroad failures, gold concerns, and banking stress.