The U.S. market crash that began when the Ohio Life Insurance and Trust Company failed in August 1857 was the Panic of 1857.
Ohio Life’s failure exposed fraudulent financial practices and triggered a loss of confidence in banks and businesses. The panic spread rapidly through the United States, causing bank suspensions, falling securities prices, and a sharp contraction in credit.
Railway speculation had helped fuel the preceding boom, while the collapse of the New York branch of the Ohio Life firm intensified fears. The crisis also spread internationally, including to Britain and other financial centers.
The Panic of 1857 is sometimes overshadowed by the Civil War and later panics. It was nevertheless a major antebellum financial crisis, and the economic disruption contributed to political tensions in the United States before the war.