Which financial institution’s collapse 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, suspended operations on October 22, 1907. The suspension followed a failed attempt to corner the stock of United Copper Company and a run by depositors who feared for the institution’s solvency. Because trust companies held deposits and made investments outside the traditional national-bank system, their problems spread anxiety through financial markets.

The panic intensified as depositors withdrew funds from other banks and trusts. Financier J. P. Morgan organized private support and emergency measures to stabilize the banking system. The episode exposed weaknesses in the U.S. financial structure and helped build political support for the Federal Reserve System, created in 1913.

Knickerbocker was a trigger, not the sole cause. Speculation, limited reserves, institutional interconnections, and public distrust had already made the system vulnerable.