J. P. Morgan organized emergency financing during the Panic of 1907 to help prevent the New York Stock Exchange from closing.
The Panic of 1907 began after a failed attempt to corner the shares of United Copper Company. The failure damaged confidence in trust companies and banks, leading to withdrawals, falling securities prices, and a severe liquidity shortage in New York.
J. P. Morgan brought bank leaders and other financiers together, examined institutions’ assets, and helped arrange loans and deposits. He also supported a plan to rescue the troubled brokerage firm Moore & Schley and helped secure funds for New York City.
The episode demonstrated how dependent the U.S. financial system was on private coordination during a crisis. Its aftermath strengthened support for a central bank, contributing to the creation of the Federal Reserve System in 1913.