J. P. Morgan helped create a private pool of bankers to support the U.S. financial system during the Panic of 1907.
The panic began after an unsuccessful attempt to corner the stock of United Copper Company. Depositors then withdrew money from trust companies, especially the Knickerbocker Trust Company in New York. Because the United States lacked a central bank, the crisis threatened to spread through the banking system.
Morgan gathered bankers, examined institutions, arranged emergency loans, and used his own library as a meeting place during the negotiations. His intervention helped stop a wider collapse, although the rescue highlighted how dependent the country was on one private financier.
The Panic of 1907 became an important argument for monetary reform. The Federal Reserve System was created in 1913, giving the United States a central institution intended to provide liquidity and reduce the need for improvised rescues led by individual bankers.