Which bank failure triggered the Panic of 1873 in the United States?

Jay Cooke & Company’s failure triggered the Panic of 1873 in the United States. The prominent Philadelphia banking house suspended payments on September 18, 1873, after it could no longer sell enough bonds connected with railroad financing.

Jay Cooke had been a major financier of the Union during the American Civil War and later invested heavily in railroads. Its collapse damaged confidence because rail companies had expanded rapidly, often with borrowed money and speculative expectations. The failure helped expose weaknesses throughout the banking and investment system.

The panic spread beyond the United States and contributed to a long international economic downturn sometimes called the Long Depression. The New York Stock Exchange closed temporarily for the first time in its history, from September 20 to September 29, 1873. The event is distinct from the later Panic of 1893, another major railroad-centered financial crisis.