The U.S. financial crisis of 1893 that caused widespread bank failures and helped bring down the Reading Railroad was the Panic of 1893.
The panic began after the Philadelphia and Reading Railroad declared bankruptcy in February 1893. Investors became increasingly worried about railroad finances, bank reserves, and the nation’s gold supply. The failure of the National Cordage Company in May intensified the fear, contributing to a broad market sell-off and a wave of bank and business failures.
The crisis produced severe unemployment and deflation in the United States. More than 500 banks failed during the depression that followed, while railroad bankruptcies disrupted transportation and investment. The panic is sometimes confused with the Panic of 1873, another major railroad-centered financial crisis, but the two occurred two decades apart. The Panic of 1893 also helped make the money question—especially the debate over gold and silver—a central issue in U.S. politics.