Which institution’s failure helped trigger the Panic of 1907 in the United States?

The failure of the Knickerbocker Trust Company helped trigger the Panic of 1907 in the United States.

Knickerbocker Trust, then one of New York’s largest trust companies, suspended operations on October 22, 1907. The failure followed a failed attempt to corner the stock of United Copper Company and intensified public fears about the solvency of other financial institutions.

Depositors rushed to withdraw funds from trust companies and banks. Because the United States lacked a central bank able to act as a modern lender of last resort, private financiers played a crucial role in containing the panic.

J. Pierpont Morgan organized emergency lending and helped stabilize the banking system. The crisis eventually encouraged creation of the Federal Reserve System in 1913. Knickerbocker’s failure was therefore both a market event and a major lesson about the need for institutional financial backstops.