The U.S. stock-market crash associated with the failure of Jay Cooke & Company in September 1873 is called the Panic of 1873.
Jay Cooke & Company was a major American investment bank and a leading financier of government and railway bonds. When it failed on 18 September 1873, confidence in financial institutions and railroad investments weakened sharply. The New York Stock Exchange closed temporarily as selling and uncertainty spread.
Railway expansion had encouraged heavy borrowing and speculation. Many companies depended on continuing access to credit, so a loss of confidence could quickly affect banks, construction, employment, and industrial production. The crisis was also connected to the earlier Vienna stock-market panic in May.
The Panic of 1873 helped begin a prolonged period of economic weakness in the United States. It is commonly linked to the Long Depression, although definitions of that depression’s precise dates vary. The event is sometimes confused with the Panic of 1893, another major nineteenth-century American financial crisis.