The Panic of 1907 was halted after J. P. Morgan organized private support for troubled banks and trust companies.
The crisis began after a failed attempt to corner shares of the United Copper Company triggered a run on the Knickerbocker Trust Company in New York. Depositors withdrew funds from other institutions, and the panic spread through financial markets. The United States then had no central bank capable of acting as a modern lender of last resort.
J. P. Morgan convened bankers, examined institutions, and helped arrange emergency financing. The Treasury also supplied funds, but the episode demonstrated how dependent the financial system was on private coordination. The panic contributed to political support for monetary reform and the creation of the Federal Reserve System in 1913. It is sometimes confused with a regular stock-market correction, but the defining features were bank runs, trust-company failures, and a severe liquidity shortage.