J. P. Morgan helped organize the rescue of the U.S. banking system during the Panic of 1907.
The panic began after a failed attempt to corner the stock of United Copper Company triggered runs on banks and trust companies. The crisis spread because the United States had no central bank capable of quickly supplying emergency liquidity.
Morgan brought leading bankers and financial institutions together in New York. They agreed to provide funds, support vulnerable institutions, and help stabilize the Knickerbocker Trust Company crisis, although the company itself ultimately failed. Morgan also helped arrange the financing needed to prevent a broader collapse.
The episode strengthened arguments for a central bank. In 1913, the United States created the Federal Reserve System, partly to provide a more reliable mechanism for handling future financial panics.