During the 1907 U.S. financial panic, which trust company’s collapse helped trigger the crisis?

The Knickerbocker Trust Company’s collapse helped trigger the Panic of 1907 in the United States.

On October 22, 1907, depositors withdrew about $8 million from Knickerbocker Trust after its president, Charles T. Barney, became associated with a failed speculation involving the United Copper Company. The run forced the institution to suspend operations, intensifying fear across New York’s financial system.

The panic had begun earlier as credit conditions tightened and a speculative attempt to corner United Copper shares failed. Knickerbocker was one of New York’s largest trust companies, so its failure made investors question the stability of similar institutions. Banks became reluctant to lend, and withdrawals spread.

J. P. Morgan organized emergency support from bankers and persuaded the U.S. Treasury to provide funds. The crisis exposed the weaknesses of the American banking system and helped build political support for the Federal Reserve, which was created in 1913. Knickerbocker Trust did not itself cause every part of the panic, but its failure became the best-known early symbol of the run.