Hitting the Buffers: The 1873 railway bust that broke one of America’s greatest financiers

冲撞缓冲器:1873年铁路泡沫破裂,打破了一位美国最伟大金融家的事业

Behind the Money

2026-04-29

53 分钟
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Every now and then a new technology comes along that changes everything – electricity, computers, potentially AI. In mid-19th-century America, that technology was the steam locomotive. It knitted the US economy together, driving the nation’s industrialisation during the Gilded Age. But along the way, it also caused one of the biggest financial crises in American history. FT Alphaville editor Robin Wigglesworth tells his co-host, FT columnist Gillian Tett, the story of the great railway bubble that ended in the Panic of 1873. It’s also the story of the spectacular rise and fall of Jay Cooke, the greatest banker of his day, who lost a fortune betting on a railroad that would eventually span the North American continent – just not in time to repay its debts. Robin and Gillian discuss what lessons the financier’s fate holds for the investors gambling on today’s AI boom. Credits: New York Times Archive, Otto Herschan Collection/Hulton Archive/Getty Images, Hulton Archive/Getty Images Further reading: Jay Cooke: Financier of the Civil War, by Ellis Paxson Oberholtzer (1907) Jay Cooke's gamble: the Northern Pacific Railroad, the Sioux, and the Panic of 1873, by M John Lubetkin (2006) Railroaded: The Transcontinentals and the Making of Modern America, by Richard White (2012) Pop! Why Bubbles Are Great For The Economy, by Daniel Gross (2007) A Fabulous Debt: The Epic Story of How Bonds Built the Modern World, by Robin Wigglesworth (2026 – forthcoming) To enjoy future episodes, be sure to subscribe to The Story of Money wherever you get your podcasts, also on the show's dedicated YouTube channel here:  Hosts: Gillian Tett and Robin Wigglesworth Producer: Lulu Smyth Senior Producers: Michela Tindera and Laurence Knight  Executive Producers: Flo Phillips and Manuela Saragosa Original music and sound design: Breen Turner Broadcast engineers: Bianca Wakeman and Petros Giuompasis Podcast Development: Laura Clarke FT Global Head of Audio: Cheryl Brumley Video editor: Josh Divney at Podcast Discovery Read a transcript of this episode on FT.com Hosted on Acast. See acast.com/privacy for more information.
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  • Jay Cook & Co. Had three main branches.

  • In New York, he had his own partners that were very able, but they literally just ran out of money.

  • They didn't have enough money to meet their own obligations.

  • So the New York partners summoned all the big counterparties among the big brokerage houses and investment banks on Wall Street

  • and say, look, if we do n't have a million dollars by 10 a.m.

  • We're dead.

  • Wow.

  • Yeah.

  • That's where you get the spooky music and dramatic music into the movie.

  • It is the moment, really.

  • It electrified everybody.

  • This was not a small bank.

  • This was like a J.P. Morgan or a Goldman Sachs out of the blue suddenly saying, we're dead.

  • Today on the story of money, what happens when an exciting new technology fuels an investment bubble?

  • Attracting a huge amount of money that eventually stages a spectacular burst.

  • Now, we could be talking about the present-day AI boom,

  • but in fact, we 're going to bring you a story that took place 150 years ago.

  • It's about the technology that first knitted the US economy together, financed by an unprecedented accumulation of debt.

  • Vast fortunes were made as the market built up a head of steam before hitting the buffers in one of the biggest

  • financial panics in Wall Street history.