J. P. Morgan helped calm the Panic of 1907 by organizing private bank support and emergency lending.
The panic began after an attempt to corner the stock of United Copper Company failed. Depositors then rushed to withdraw money from trust companies, especially the Knickerbocker Trust Company in New York. Because the United States lacked a modern central bank, private financiers and banks played a crucial stabilizing role.
Morgan brought bank presidents and other financial leaders together, inspected institutions, arranged loans, and committed his own resources. His intervention helped prevent a wider collapse, although the panic caused major disruption and a sharp decline in market confidence.
The crisis also exposed weaknesses in the American banking system. In response, Congress created the National Monetary Commission, whose work contributed to the establishment of the Federal Reserve System in 1913. Morgan is therefore linked both to the rescue and to the reforms that followed.