Which company’s collapse in October 1907 helped trigger the Panic of 1907 in the United States?

The collapse of the Knickerbocker Trust Company helped trigger the Panic of 1907 in the United States. Knickerbocker Trust, then one of New York’s largest trust companies, failed after a speculative attempt to corner the stock of United Copper Company went wrong.

The failed scheme damaged confidence in the trust sector. Depositors began withdrawing funds, and a run on Knickerbocker Trust became a central early event in the panic. Other financial institutions and businesses came under pressure as credit tightened and investors sold securities.

The crisis is closely associated with banker John Pierpont Morgan, who organized emergency support with other financiers and helped stabilize the banking system. The New York Stock Exchange also suffered a major decline, while interest rates and call-loan rates rose sharply.

The panic exposed weaknesses in the U.S. financial system, which had no modern central bank. Its aftermath helped build political support for the Federal Reserve System, created in 1913. Knickerbocker Trust is sometimes mistaken for a commercial bank, but it was a trust company, a financial institution that accepted deposits and made loans while operating under different rules.