Which trust company’s collapse helped spark the Panic of 1907 in New York?

The collapse of the Knickerbocker Trust Company helped spark the Panic of 1907 in New York.

Knickerbocker Trust, then one of New York’s largest trust companies, faced a run after its president, Charles T. Barney, became associated with a failed attempt to manipulate the stock of United Copper. Depositors withdrew funds rapidly, and the institution suspended operations on October 22, 1907.

The failure intensified a broader loss of confidence in banks and trust companies. J. P. Morgan organized private support for threatened institutions and helped stabilize the banking system. The crisis exposed the absence of a United States central bank capable of acting as a lender of last resort.

The Panic of 1907 eventually contributed to the creation of the Federal Reserve System in 1913. It is sometimes confused with the 1901 panic linked to Northern Pacific stock, but the later crisis centered on trust-company runs, credit contraction, and the near-collapse of several major financial institutions.