Which financial institution’s failure intensified the 1907 U.S. stock-market panic?

The Knickerbocker Trust Company’s failure intensified the 1907 U.S. stock-market panic.

The New York trust company suspended operations on October 22, 1907, after a failed attempt to corner United Copper shares damaged confidence in its finances. Depositors rushed to withdraw money from other trusts, and the panic spread through financial markets.

The crisis exposed the United States’ lack of a central bank capable of supplying emergency liquidity. Banker J. P. Morgan organized private support, including funds to stabilize banks and the New York Stock Exchange. The panic eventually eased, but the episode demonstrated the fragility of the banking system.

The crisis is sometimes described simply as a stock-market crash, although it was also a severe banking panic. Its aftermath helped lead to the creation of the Federal Reserve System in 1913.