The U.S. financial panic that followed the 1907 failure of New York’s Knickerbocker Trust Company was the Panic of 1907.
The crisis began in October 1907 after a failed attempt to corner the stock of United Copper Company caused depositors to rush several trust companies. The collapse of Knickerbocker Trust, then one of New York’s largest trust companies, intensified the panic and damaged confidence in the banking system.
Financier J. P. Morgan organized private-sector support, persuaded banks to provide emergency funds, and helped stabilize the New York financial system. The episode exposed weaknesses in the United States’ decentralized banking structure and contributed to the creation of the Federal Reserve System in 1913.
The Panic of 1907 is sometimes confused with the earlier Panic of 1893 or the 1929 Wall Street Crash. Unlike those episodes, its immediate trigger was a failed stock speculation and a run on trust companies.