J. P. Morgan led efforts to stabilize the banking system during the Panic of 1907.
The panic began after a failed attempt to corner the stock of United Copper Company triggered runs on trust companies and other financial institutions. The crisis spread through New York’s financial system, and several banks faced dangerous withdrawals. The United States did not yet have a central bank capable of acting as a lender of last resort.
Morgan used his authority, money, and organization to gather bankers, examine institutions, and arrange emergency support. He reportedly kept key financiers working through the night while deciding which institutions could be rescued. The episode demonstrated how heavily the country depended on private intervention during a financial emergency.
The Panic of 1907 helped build political support for creating the Federal Reserve System. Congress passed the Federal Reserve Act in 1913, establishing the central bank that later took responsibility for crisis liquidity.