The 1907 US financial crisis that prompted J. P. Morgan’s private bank rescue was the Panic of 1907.
The crisis began after a failed attempt to corner the stock of United Copper Company. Depositors then withdrew money from banks and trust companies connected to the speculators. The Knickerbocker Trust Company, one of New York’s largest trust companies, suspended operations on 22 October 1907.
J. P. Morgan gathered bankers, examined institutions, and arranged emergency loans and support. The US Treasury also supplied funds. The panic eased after several weeks, but it exposed how little formal central-bank support the United States had.
The crisis helped build political support for monetary reform. The Federal Reserve System was created in 1913, replacing the improvised private coordination that had been necessary in 1907. Morgan’s role does not mean he acted alone; other bankers and government officials also participated.