Which New York trust company collapsed in 1907, helping spark the Panic of 1907?

The Knickerbocker Trust Company collapsed in 1907, helping spark the Panic of 1907.

The company suspended operations on October 22, 1907, after a failed attempt to manipulate the stock of United Copper Company damaged confidence in its leadership. Depositors rushed to withdraw funds, and the run spread to other trust companies and banks in New York.

Trust companies performed banking functions but were subject to fewer reserve requirements than traditional commercial banks. That structure left parts of the financial system vulnerable when depositors demanded cash at the same time. The panic threatened the New York money market and caused sharp pressure on stock prices.

Financier J. P. Morgan organized private support to stabilize banks and trusts, illustrating how heavily the system depended on individual intervention. The crisis helped build political support for a central bank, and the Federal Reserve System was created in 1913. The Knickerbocker episode is therefore linked both to a stock-market panic and to major U.S. banking reform.