Wall Street, Great Financial Panic in 1873

The Great Financial Panic of 1873. Intersection of Nassau St. and Broad Street with Wall Street view of the Sub-Treasury, Jay Cooke & Co's Bank (corner Wall and Nassau streets) and the Western Union Telegraph Office seen from the old Drexel Building on Friday, September 19, 1873. Illustration from the Supplement to Frank Leslie's Illustrated Newspaper, October 4, 1873.

The crisis started when the stock market crashed in Europe. Investors began to sell off the investments they had in the United States. Many companies had been borrowing money, using bonds, to get the cash to build new lines in railroads, the largest non-agricultural employer in the United States. When Europeans started selling their railroad bonds, there were soon more bonds for sale than anyone wanted. The banking house of Jay Cooke & Company, that heavily invested in railroads, closed its doors on September 18. There was a rush in the New York Stock Exchange that day. It closed for ten days. Many railroads went bankrupt. In the U.S. more than 100 banks failed. The Panic of 1873 triggered a long economic recession.

In August 1890, another panic hit Wall Street, and another in 1893.