Vienna’s stock exchange crash in 1873 gave its name to the Panic of 1873’s initial financial shock.
The Vienna Stock Exchange crashed on May 9, 1873, a day remembered as Gründerkrach, or founders’ crash. The collapse followed a period of speculative expansion in Austria-Hungary, especially after the economic boom surrounding the 1873 Vienna World’s Fair. Investors had bid up shares and property prices, while credit expanded rapidly.
Financial contagion soon reached Germany and the United States. In America, the failure of Jay Cooke & Company in September 1873 helped trigger a banking panic and the closure of the New York Stock Exchange for several days. The resulting depression lasted for years in many countries.
The Panic of 1873 is therefore not simply an American event. Its international character reflected increasingly connected capital markets, railways, banks, and industrial investment during the nineteenth century.