The 1907 US financial crisis during which the Knickerbocker Trust Company failed was the Panic of 1907.
The crisis followed an unsuccessful attempt in October 1907 to corner the shares of United Copper Company. When the speculation failed, depositors questioned related banks and trust companies. Knickerbocker Trust, then one of New York’s largest trust companies, experienced a run and suspended operations on October 22, 1907.
J. P. Morgan organized private rescue efforts by persuading banks and financiers to provide liquidity. His intervention helped prevent a broader collapse, although the panic still caused sharp market declines, bank runs, and a contraction in credit. The episode revealed that the United States lacked a central bank capable of acting as a consistent lender of last resort.
The crisis directly influenced the creation of the Federal Reserve System in 1913. It is sometimes confused with the Panic of 1893, another major US banking crisis, but the Knickerbocker Trust failure specifically belongs to 1907.