Which investment bank’s collapse in 1873 helped start the U.S. Panic of 1873?

Jay Cooke & Company’s collapse in 1873 helped start the U.S. Panic of 1873.

Jay Cooke & Company was a major American investment bank that had financed railroads, especially Northern Pacific Railway. On 18 September 1873, it suspended payments after investors became unwilling to provide enough capital for the railroad’s expansion. The failure shook confidence in banks and securities markets.

The panic spread through the U.S. financial system, contributing to bank failures, business failures, falling investment, and a prolonged depression. The New York Stock Exchange temporarily closed for the first time in its history, from 20 September to 29 September 1873.

The crisis also had international dimensions. The Vienna Stock Exchange crash earlier that year had already damaged European financial confidence, and failures in other countries followed. The Panic of 1873 therefore formed part of a broader downturn rather than an isolated American event.