The Panic of 1907 was eased after J. P. Morgan organized private bank support during a severe U.S. financial crisis.
The panic began after an unsuccessful attempt to corner the stock of United Copper Company. When the scheme failed, depositors withdrew funds from related banks, and distrust spread through the financial system. The Knickerbocker Trust Company of New York collapsed, intensifying runs on other trust companies and banks.
J. P. Morgan gathered financiers, examined institutions, and arranged loans and deposits to prevent further failures. The Treasury also supplied funds. The emergency exposed the weakness of relying on private coordination because the United States had no central bank at the time.
The crisis helped create political support for reform. The Aldrich–Vreeland Act of 1908 provided emergency currency, and the Federal Reserve System was established in 1913. The Panic of 1907 therefore directly influenced America’s modern central-banking structure.