What was the first major U.S. financial institution to fail during the Panic of 1907?

The Knickerbocker Trust Company was the first major U.S. financial institution to fail during the Panic of 1907.

The New York trust company suspended operations on 22 October 1907 after a failed attempt to corner the stock of United Copper Company intensified doubts about its finances. A run followed, and the crisis spread through other banks and trust companies. Because trusts performed important banking functions but faced weaker reserve requirements, they were especially vulnerable to withdrawals.

Banker John Pierpont Morgan then organized private emergency support, assembling funds and persuading institutions to cooperate. The crisis eventually eased after a rescue of the Trust Company of America and other interventions, but it demonstrated the absence of a permanent U.S. central bank.

The Panic of 1907 helped create political support for the Federal Reserve System, which Congress established in 1913. Knickerbocker Trust was therefore both a failed institution and a key symbol of the banking weaknesses exposed by the panic.