The financial crisis triggered in part by the collapse of the Knickerbocker Trust Company was the Panic of 1907.
The panic began after a failed attempt to corner the stock of United Copper Company. Depositors then rushed to withdraw funds from trust companies, institutions that had grown rapidly but held fewer immediately available reserves than traditional banks. The failure of Knickerbocker Trust in October 1907 intensified the run.
Banker J. P. Morgan helped organize emergency lending and restore confidence, working with other financiers and government officials. The episode exposed weaknesses in the United States banking system, which lacked a central bank capable of acting as a lender of last resort. The Federal Reserve System was created in 1913, several years after the panic, partly in response to these vulnerabilities.