The 1907 panic was the Panic of 1907, which was contained after financier J. P. Morgan organized a private rescue.
The crisis began with a failed attempt to corner shares of United Copper Company. Depositors then rushed to withdraw funds from trust companies connected to the speculators, especially the Knickerbocker Trust Company in New York. As confidence weakened, withdrawals spread through the financial system.
J. P. Morgan convened bankers, examined institutions’ finances, and helped arrange emergency lending and commitments. He also helped secure funds for New York City when the city faced difficulty refinancing short-term debt. The panic eased after coordinated private action, but the episode demonstrated the danger of relying on one powerful financier as a lender of last resort.
The Panic of 1907 helped build political support for a formal central bank. The Federal Reserve System was created in 1913, partly in response to weaknesses exposed by the panic. It was a U.S. financial crisis, distinct from the later worldwide crashes of 1929 and 2008.