The Panic of 1893 was a national economic crisis set off by the collapse of two of the country's largest employers, the Philadelphia and Reading Railroad and the National Cordage Company. Following of the failure of these two companies, a panic erupted on the stock market. Hundreds of businesses had overextended themselves, borrowing money to expand their operations. When the financial crisis struck, banks and other investment firms began calling in loans, causing hundreds of business bankruptcies across the United States. Banks, railroads, and steel mills especially fell into bankruptcy.
Significance: The Panic of 1893 did have a significant effect, as by the close of 1893, more than 15,000 businesses and more than 640 banks were bankrupt. Large-scale strikes were frequent and often bloody. The Depression formed the backdrop for the intensely contested elections of 1894 and 1896, which both resulted in Republican landslides and the emergence of the Progressive Era.