The Panic of 1873 was the U.S. financial panic that helped produce a long international economic depression.
The panic began in September 1873 after the failure of the investment firm Jay Cooke & Company. The firm had heavily promoted Northern Pacific Railway bonds, and concerns about railroad finance spread through banks and investors. The New York Stock Exchange closed temporarily during the resulting turmoil.
The crisis was part of a broader international downturn often called the Long Depression. Falling railroad investment, deflation, bank failures, and industrial weakness affected the United States and several European economies for years.
It is important not to confuse this event with the Panic of 1893, another severe U.S. crisis involving railroad failures and banking stress. The 1873 panic is especially associated with Jay Cooke’s failure and the collapse of railway speculation.