The Panic of 1907 prompted J.P. Morgan to organize a private rescue of the U.S. banking system.
The crisis began after a failed attempt to corner the stock of United Copper Company. Depositors then withdrew funds from institutions connected to the scheme, and distrust spread to trust companies and banks. The Knickerbocker Trust Company, one of New York's largest trust companies, failed after a run in October 1907.
J. Pierpont Morgan brought bankers together in New York and used his influence and money to help provide liquidity. The Treasury Department also supplied funds. This response helped prevent an even broader collapse, but it highlighted the weakness of a banking system without a permanent central bank.
The panic helped build political support for the Federal Reserve System, which Congress created in 1913. It is distinct from the Panic of 1893 and the Panic of 1873, although all were major U.S. financial crises. The 1907 episode also influenced later debates about the concentration of financial power in private hands.