Which U.S. banking firm’s failure in September 1873 helped begin the Panic of 1873?

Jay Cooke & Company’s failure in September 1873 helped begin the Panic of 1873.

The prominent American investment bank suspended payments on September 18, 1873, after it could not sell enough Northern Pacific Railway bonds. The failure damaged confidence in rail finance and helped trigger a run on banks and a suspension of trading on the New York Stock Exchange.

The panic had broader causes, including speculative railway investment, excessive credit, international financial weakness, and the failure of the Vienna bank Kredit-Anstalt in May. As rail companies and banks struggled, the shock spread through the United States and Europe.

The resulting depression lasted for years and is often called the Long Depression, although historians debate how closely that label fits different countries. Jay Cooke’s collapse was therefore a catalyst within a wider financial system under strain, not the only underlying cause.