Which U.S. market panic began after Jay Cooke and Company failed in September 1873?

The Panic of 1873 began after Jay Cooke and Company failed in September 1873.

Jay Cooke and Company was a major American investment bank that had helped finance the Northern Pacific Railway. When investors lost confidence in the railway’s prospects, the bank could not meet its obligations and suspended operations on September 18, 1873.

The failure triggered a run on other financial institutions and helped close the New York Stock Exchange temporarily. The panic spread beyond the United States, contributing to a prolonged international depression. Falling railway investment, bank failures, deflation, and weak demand affected businesses and workers for years.

The event is sometimes confused with the Vienna market crash that also occurred in 1873. The Vienna crash helped initiate a European financial crisis, while Jay Cooke’s failure was the key American trigger. The resulting downturn is often called the Long Depression, although historians differ over its exact dates and severity in different countries.