Which U.S. financial company’s 1907 failure helped trigger the Panic of 1907?

The Knickerbocker Trust Company’s failure helped trigger the Panic of 1907.

On October 22, 1907, depositors withdrew funds from Knickerbocker Trust in New York after a failed attempt to corner the stock of United Copper. The trust company could not meet the withdrawals and suspended operations, causing depositors and investors to question the stability of other financial institutions.

The panic spread through bank runs and a shortage of available credit. J. P. Morgan organized private support for banks and trust companies, helping prevent an even wider collapse. The crisis also affected the New York Stock Exchange and exposed weaknesses in the U.S. banking system, which lacked a central bank capable of supplying emergency liquidity.

The Panic of 1907 contributed to the creation of the Federal Reserve System in 1913. Knickerbocker Trust was therefore not the only institution involved, but its collapse became the most visible early trigger. J. P. Morgan’s role is a related fact, not the name of the failed trust company.