The U.S. stock-market downturn that followed railroad failures and bank runs in 1893 was the Panic of 1893.
The panic began when the Philadelphia and Reading Railroad declared bankruptcy in February 1893, intensifying concern about heavily indebted rail companies. The collapse of the National Cordage Company in May helped trigger a broader loss of confidence. Investors sold securities, banks faced withdrawals, and many businesses failed.
The crisis became a severe economic depression in the United States. It also affected Europe because international investors held American railroad securities. The federal government’s gold reserves fell sharply, contributing to a political dispute over monetary policy.
The Panic of 1893 is sometimes confused with the Panic of 1873, another crisis strongly connected with railroad speculation. The later Panic of 1907 was a separate banking crisis that led to the creation of the Federal Reserve System.