The collapse of the Vienna Stock Exchange on May 9, 1873, began the Panic of 1873.
The crash followed years of rapid investment and speculation in railways, property, and newly created companies. In Austria-Hungary, optimistic expectations encouraged share buying, but many projects could not produce the profits investors expected. When prices turned down, financial institutions and investors rushed to sell.
The panic spread through Europe and then reached the United States. In America, the failure of Jay Cooke & Company in September 1873 helped trigger bank runs and a major disruption in railroad finance. The resulting downturn is often associated with the Long Depression, a period of prolonged weakness that affected several industrial economies.
The names can be confusing because “Panic of 1873” describes the financial shock, while “Long Depression” describes the extended economic aftermath in many countries. The same year also saw important market closures and banking failures, but the first dramatic break occurred in Vienna rather than New York.