The 1907 U.S. financial crisis stabilized by J. P. Morgan’s private intervention was the Panic of 1907.
The panic began after an unsuccessful attempt to corner the stock of United Copper Company. Depositors then withdrew funds from banks connected to the failed speculation, and fear spread to trust companies. The Knickerbocker Trust Company, one of New York’s largest trust firms, suspended operations on October 22, 1907.
J. P. Morgan organized emergency loans and persuaded other financiers to provide support. He also helped coordinate the rescue of troubled institutions and worked with New York City officials when the city faced a cash shortage. The crisis eased after several weeks, but it exposed weaknesses in the United States financial system.
The Panic of 1907 helped build political support for a central bank. The Federal Reserve System was created in 1913, six years after the panic, to provide a more systematic lender of last resort.