5 May 1893: The Panic of 1893 hits Wall Street

On May 5, 1893, often called Industrial Black Friday, stock prices collapsed on the New York Stock Exchange after the failure of overextended companies such as National Cordage. Railroads had borrowed heavily and banks soon followed them into trouble. The panic turned into one of the worst depressions in US history, with hundreds of banks and thousands of businesses failing and unemployment soaring for years.

The lesson: Leverage built in good times becomes the fuel for panic when the cycle turns.