The failure of the Ohio Life Insurance and Trust Company in 1857 helped trigger the Panic of 1857.
Ohio Life suspended payments in August 1857 after hidden financial problems were discovered. The failure damaged confidence in banks and railroad investments, and panic spread through financial markets. The New York branch of Ohio Life had been closely connected to speculative railroad financing, which made the shock especially important.
The crisis soon affected banks across the United States. On October 13, 1857, banks in New York suspended convertibility of deposits into specie, meaning customers could no longer freely exchange bank claims for coin. Railroad failures, falling land values, and declining trade worsened the downturn.
The panic was international rather than purely local. Financial distress reached Britain and other economies, although the American banking system was particularly vulnerable because it consisted of many state-chartered banks with varying standards. The crisis ended relatively quickly compared with later depressions, but it contributed to economic instability before the American Civil War. It is sometimes confused with the Panic of 1837, another major U.S. financial crisis.