Which U.S. bank’s collapse helped trigger the Panic of 1907?

The collapse of the Knickerbocker Trust Company helped trigger the Panic of 1907.

Knickerbocker Trust Company suspended operations on October 22, 1907, after a failed attempt to corner the stock of United Copper Company undermined confidence in the institution. Depositors rushed to withdraw funds, and the run spread to other trust companies and banks.

The panic threatened New York’s financial system because the United States had no modern central bank to provide emergency liquidity. J. P. Morgan organized private support, persuaded banks to cooperate, and helped stabilize the market.

The crisis exposed weaknesses in the country’s fragmented banking system. Its aftermath contributed to the creation of the National Monetary Commission and eventually the Federal Reserve System in 1913. Knickerbocker Trust was not the only institution in trouble, but its failure became the most prominent early flashpoint of the panic.