During the Panic of 1907, J. P. Morgan personally coordinated the rescue of threatened U.S. banks and trust companies.
The panic began after an unsuccessful attempt to corner the stock of United Copper Company. The failure damaged confidence in brokerage firms and trust companies, especially because the United States had no modern central bank to provide emergency liquidity. Depositors and investors rushed to withdraw funds, producing a dangerous shortage of cash.
Morgan gathered bankers in New York and used his reputation, money, and library as a meeting place for negotiations. He pressed institutions to provide funds, arranged support for the Knickerbocker Trust Company and other firms, and helped stabilize the financial system. The crisis eventually encouraged creation of the Federal Reserve System in 1913.
Morgan is sometimes confused with his son, J. P. Morgan Jr., who became a major banker later. The 1907 rescue is associated principally with the elder Morgan, whose intervention made him a central figure in U.S. financial history.