Which U.S. railroad’s failure helped spark the Panic of 1893?

The Philadelphia and Reading Railroad’s failure helped spark the Panic of 1893.

The Philadelphia and Reading Railroad, commonly called the Reading Railroad, entered receivership in February 1893. Its collapse exposed the financial strains affecting American railroads, which had borrowed heavily to expand during a period of intense competition and speculation.

The panic became a wider banking and stock-market crisis. The failure of the National Cordage Company in May 1893 added to the pressure, while runs on banks and concerns about the government’s gold reserves worsened confidence. Hundreds of banks and businesses failed, unemployment rose, and the United States entered a severe depression.

The railroad’s name can be confusing because the company was not the only major railroad failure associated with the crisis. The Northern Pacific Railway had failed in 1893 as well, but the Reading Railroad’s receivership is commonly identified as an early catalyst. The Panic of 1893 also became entangled with the debate over silver and the gold standard, which shaped U.S. politics and monetary policy during the depression.