Which U.S. city’s bank failure triggered the Panic of 1907?

New York City’s banking crisis triggered the Panic of 1907.

The panic centered on New York City after an unsuccessful attempt in October 1907 to corner the stock of United Copper Company. When the scheme failed, depositors rushed to withdraw funds from institutions connected to the speculators. The run spread to trust companies, which were less tightly regulated than commercial banks.

The crisis threatened the New York Stock Exchange and the wider U.S. financial system. J. P. Morgan organized private support for banks and trusts, helping stabilize the situation. The U.S. Treasury also supplied funds, but the episode showed that the country lacked a permanent central bank capable of acting as lender of last resort.

The Panic of 1907 helped build political support for financial reform. The Federal Reserve System was created in 1913, five years later. The panic is sometimes called the Knickerbocker Crisis because the Knickerbocker Trust Company was one of the major institutions involved.