The 1907 crisis that prompted J.P. Morgan to organize private support for threatened U.S. banks was the Panic of 1907.
The panic began in October 1907 after an unsuccessful attempt to corner the stock of United Copper Company. When the scheme failed, depositors rushed to withdraw funds from trusts and banks connected to the speculators. The collapse of the Knickerbocker Trust Company intensified fears across New York and then the wider United States.
J.P. Morgan gathered bankers in his library and used his reputation, money, and influence to stabilize institutions and the stock market. The episode exposed how heavily the American financial system depended on one powerful private banker because the country had no modern central bank. Congress later created the National Monetary Commission, helping lead to the Federal Reserve Act of 1913.
The Panic of 1907 is sometimes called the Knickerbocker Panic, but that name refers especially to the trust-company failure that helped spread it.