J. P. Morgan helped stop the Panic of 1907 by organizing emergency loans and stock purchases.
The panic began in October 1907 after a failed attempt to corner the stock of United Copper Company. The failure spread distrust through banks and trust companies, leading depositors to withdraw funds. Several financial institutions faced runs, and the New York Stock Exchange suffered a sharp fall.
Morgan gathered bankers in his library and pressured them to provide funds to threatened institutions. He also helped arrange the purchase of Tennessee Coal, Iron and Railroad stock, easing pressure on the troubled brokerage firm Moore & Schley. The crisis eventually subsided after emergency financing was assembled.
The panic exposed weaknesses in the United States banking system and helped create support for a central bank. The Federal Reserve System was established in 1913. Morgan did not single-handedly provide every dollar, but his leadership and coordination were central to the rescue.