The 1907 financial panic that prompted J.P. Morgan to organize a private rescue of U.S. banks was the Panic of 1907.
The crisis began after a failed attempt to corner the stock of United Copper Company. Depositors then rushed to withdraw money from trust companies, especially the Knickerbocker Trust Company in New York. Because the United States lacked a modern central bank, the panic threatened to spread through the banking system.
J.P. Morgan used his authority and personal funds to bring bankers together, inspect institutions, and arrange emergency loans. The Treasury also supplied money, but Morgan’s coordination was central to restoring confidence. The crisis exposed weaknesses in the American financial structure.
The panic helped build political support for reform. The Aldrich–Vreeland Act of 1908 created emergency currency provisions, and the Federal Reserve System was established in 1913. Morgan did not act as an official central banker; he was a private financier leading an emergency response.