TeachMeFinance.com - explain Jay Cooke panic
Jay Cooke panic -- So-called ; Jay Cooke & Co., a large banking
house in New York, failed September 18, 1873. A panic
followed. The Union Trust Company stopped business temporarily
(partly as a result of a defalcation of $500,000 by its
secretary) ; the Bank of the Commonwealth closed its doors
and never reopened them and numerous other financial concerns
and stock brokers went down in the crash.
At 11 o'clock on Saturday, September 20, the governing
committee of the New York Stock Exchange ordered the
exchange to be closed and it was not reopened until September
The failure of Jay Cooke & Co. was brought about by the
collapse of their effort to finance the Northern Pacific Railroad,
which was then in course of construction.
The so-called Jay Cooke panic is also generally known as
the panic of 1873.
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