The 1893 U.S. panic that followed the collapse of the Philadelphia and Reading Railroad was the Panic of 1893.
The railroad’s failure shook confidence in heavily leveraged railway companies. Banks and businesses then faced withdrawals, falling securities prices, and tighter credit. The insolvency of the National Cordage Company added to the pressure on financial markets.
The panic developed into a broad economic depression. More than 500 banks and 15,000 businesses failed in the United States during the crisis, while unemployment rose sharply. The turmoil also intensified political arguments over the country’s monetary system and the gold standard.
The Panic of 1893 is sometimes grouped with the severe depression that followed, but the terms are not identical: the panic describes the financial breakdown, while the depression describes the prolonged economic downturn.