Which U.S. banking firm’s failure helped trigger the Panic of 1873?

The failure of Jay Cooke & Company helped trigger the Panic of 1873 in the United States.

Jay Cooke & Company was a major investment bank that helped finance the Union during the American Civil War and later promoted railroad bonds. On September 18, 1873, the firm failed after investors lost confidence in its financing of the Northern Pacific Railway and related railroad speculation.

The failure contributed to a financial panic, bank runs, falling security prices, and a prolonged economic depression. The crisis was part of a broader international downturn that followed the Vienna stock-market crash earlier in 1873. Railroads, banks, and industrial businesses were especially exposed because large amounts of capital had been committed to expansion.

The Panic of 1873 is sometimes called the Long Depression’s starting point in the United States, although historians debate the precise boundaries and causes of the wider depression. It should not be confused with the Panic of 1893, another major railroad-centered crisis.