The 1907 U.S. financial panic stopped after J. P. Morgan organized emergency private lending.
The crisis began in October 1907 when an attempt to corner United Copper shares failed. The failure damaged confidence in brokerage firms and trust companies, causing depositors to withdraw cash. The Knickerbocker Trust Company, then one of New York’s largest trust companies, collapsed after a run.
J. P. Morgan assembled bankers in his library and directed loans, asset purchases, and support for threatened institutions. The panic exposed weaknesses in the U.S. banking system, which lacked a central bank able to act as a lender of last resort. Congress responded with the Aldrich–Vreeland Act of 1908, and the Federal Reserve System was created in 1913. The Panic of 1907 is sometimes confused with the separate Panic of 1893, another severe U.S. banking crisis.