The severe 1873 financial panic that helped trigger a long global depression is known as the Panic of 1873.
The panic began in Europe and the United States amid speculative railway investment, expanding credit, and fragile banking conditions. In the United States, the failure of Jay Cooke & Company on September 18, 1873, undermined confidence because the firm had heavily financed Northern Pacific Railway projects.
The New York Stock Exchange closed temporarily on September 20, 1873, for the first time in its history. The downturn spread through banking, railroads, manufacturing, and employment. The resulting depression lasted for years, though historians debate its exact duration and whether “the Long Depression” should be treated as a single worldwide episode.
The panic is sometimes linked too narrowly to one railroad failure. European financial stresses and earlier speculative excesses were also important. The crisis contributed to bank failures and deflation on both sides of the Atlantic.