The Panic of 1873 began in the United States after the failure of Jay Cooke & Company in September 1873.
Jay Cooke & Company was a major bank involved in financing railroads, especially the Northern Pacific Railway. When confidence in the firm collapsed, the New York Stock Exchange closed temporarily for the first time in its history. The panic then developed into a prolonged depression across the United States and Europe.
The crisis had multiple causes rather than one isolated failure. Railroad overbuilding, speculative investment, banking instability, and monetary disputes all mattered. In Europe, the Vienna Stock Exchange crash of May 1873 was an important earlier shock, and Germany's rapid expansion after the Franco-Prussian War also fed speculation.
The period is sometimes called the Long Depression, although historians debate how that label should be applied. It should not be confused with the Great Depression of the 1930s, which followed a different set of events.