Panic of 1873

The Panic of 1873 was a financial crisis that began in Vienna on 9 May 1873 and reached the United States in September 1873 with the failure of the banking house Jay Cooke and Company, which had overextended itself underwriting Northern Pacific Railway bonds. The crisis followed a decade of speculative railroad investment, silver demonetization in Germany and the United States, and economic dislocation from the Franco Prussian War, and it triggered a wave of American bank and business failures. The ensuing downturn lasted until 1879 in the United States, where unemployment peaked near 8.25 percent in 1878 and wage cuts provoked the Great Railroad Strike of 1877, and it opened two decades of stagnation in Britain later remembered as the Long Depression.