J. P. Morgan became the central private-sector figure in organizing the response to the Panic of 1907.
The panic began after a failed attempt to corner the stock of United Copper Company helped trigger runs on trust companies and banks. The crisis spread through financial markets in October 1907, while the United States had no modern central bank to provide emergency liquidity.
Morgan convened bankers in New York, examined institutions’ assets, and pressed them to supply funds and coordinate rescue measures. He also helped secure support for the Trust Company of America and other threatened institutions. The effort helped prevent a still wider collapse, although the economic contraction remained severe.
The panic helped persuade many U.S. policymakers that the financial system needed a permanent lender of last resort. The Federal Reserve System was created in 1913, five years after the crisis.