The 1893 U.S. financial panic that followed major railroad failures was the Panic of 1893.
Several large railroads, including the Philadelphia and Reading Railroad, entered bankruptcy after overexpansion and weak earnings. The failure of the brokerage firm Grant & Ward in May 1884 had earlier exposed financial fragility, but the decisive 1893 crisis intensified when the Philadelphia and Reading failed and confidence in other companies deteriorated.
Bank runs, business failures, falling commodity prices, and rising unemployment spread across the United States. The depression that followed lasted for several years and became one of the worst economic downturns of the nineteenth century.
The crisis also weakened the U.S. Treasury’s gold reserves. President Grover Cleveland eventually supported a bond issue arranged with J. P. Morgan and August Belmont to replenish the reserves. The Panic of 1893 is distinct from the Panic of 1873 and the Panic of 1907.