Which San Francisco earthquake helped trigger the 1907 US banking panic?

The 1906 San Francisco earthquake helped trigger the 1907 US banking panic by creating a huge demand for insurance payouts and financial transfers.

The earthquake and fires devastated San Francisco on 18 April 1906. Insurers and banks needed to move large sums to meet claims and rebuilding costs, contributing to a flow of capital from New York and tightening money markets. The financial strain was one background factor in the panic that erupted the following year.

The immediate crisis began in October 1907 after a failed attempt to corner the stock of United Copper Company undermined confidence in several trust companies. Depositors rushed to withdraw funds, and the Knickerbocker Trust Company failed. With no modern central bank, private financiers led by J. P. Morgan organized emergency support to prevent a wider collapse.

The earthquake did not directly cause the panic, and historians identify several other forces, including a recession, restricted liquidity, and fragile trust companies. The episode helped persuade US policymakers that a central bank was needed, leading to the Federal Reserve’s creation in 1913.