Which institution’s collapse helped spark the Panic of 1907 in the United States?

The collapse of the Knickerbocker Trust Company helped spark the Panic of 1907 in the United States.

Knickerbocker Trust, then one of New York’s largest trust companies, faced a run after financier F. Augustus Heinze became associated with a failed attempt to corner the shares of United Copper Company. Depositors withdrew funds rapidly, and the institution suspended operations on October 22, 1907.

The failure intensified public distrust of other banks and trust companies. J. P. Morgan organized emergency support, gathered private funds, and helped stabilize the banking system while the Treasury supplied additional liquidity. The panic exposed the weakness of a financial system that lacked a formal central bank.

The episode is sometimes confused with the later creation of the Federal Reserve. The Panic of 1907 was a major reason reformers supported a central banking system, but the Federal Reserve was not established until 1913.