The U.S. financial crisis that followed the September 1873 collapse of Jay Cooke & Company was the Panic of 1873. Jay Cooke & Company was a major investment bank that had heavily promoted railroad bonds, and its failure damaged confidence in rail finance and the broader banking system.
The panic began in an international environment already weakened by speculative railroad investment, banking stress, and the failure of the Vienna Stock Exchange in May 1873. In the United States, the New York Stock Exchange closed temporarily after the collapse, and the crisis contributed to a long economic downturn.
The Panic of 1873 is sometimes treated as the beginning of the Long Depression, although historians differ over the depression’s exact dates and severity. It should not be confused with the Panic of 1893, another major U.S. financial crisis linked to railroad failures and banking instability.