The first major U.S. financial panic of the 20th century, beginning with a 1907 run on banks and trust companies, was the Panic of 1907.
The panic intensified in October 1907 after an unsuccessful attempt to corner the stock of United Copper Company. Depositors and investors then withdrew funds from institutions connected to the scheme, spreading fear through New York’s banking system. Trust companies, which were less tightly regulated than commercial banks, became especially vulnerable.
Financier J. P. Morgan organized private rescue efforts, using his reputation and resources to stabilize banks and the stock exchange. The crisis exposed weaknesses in the United States’ fragmented financial system, which lacked a central bank capable of acting as a lender of last resort.
The panic helped build support for monetary reform. The Federal Reserve System was eventually created in 1913. The episode is distinct from the Panic of 1893 and the 1929 crash, although all three involved banking stress, falling securities prices, and public withdrawals.