The 19th-century crash that followed the failure of Jay Cooke & Company in September 1873 was the Panic of 1873.
Jay Cooke & Company, a major U.S. investment bank, suspended payments on September 18, 1873. The firm had financed railroad expansion and could not sell enough Northern Pacific Railway bonds to meet its obligations. Its failure helped trigger a banking panic and the closure of the New York Stock Exchange for several days.
The crisis spread internationally and contributed to a long period of economic weakness often called the Long Depression. Railroad overbuilding, speculative finance, falling prices, and banking problems all played roles. Germany and Austria had also experienced financial stress earlier in 1873.
The event is sometimes confused with the Panic of 1893, another severe U.S. financial crisis involving railroad failures. The 1873 panic is especially associated with Jay Cooke’s collapse and the railroad-finance problems of the post–Civil War era.