J. P. Morgan helped end the 1907 U.S. banking panic by organizing a private rescue of threatened institutions.
The Panic of 1907 began after a failed attempt to corner the stock of United Copper Company. Depositors then rushed to withdraw money from trust companies, institutions that had fewer safeguards than commercial banks. The panic spread as confidence weakened and credit became scarce.
J. P. Morgan, already one of the country’s most powerful financiers, assembled bankers in his New York library and pressed them to provide funds and coordinate support. He also used his own resources and influence to stabilize several institutions. The emergency response helped prevent a broader collapse.
The panic convinced many Americans that the financial system needed a permanent lender of last resort. That political pressure contributed to the creation of the Federal Reserve System in 1913. Morgan’s role is sometimes described as a government bailout, but the rescue was primarily a private banking intervention before the Federal Reserve existed.