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)

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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

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