The U.S. financial panic that began after Knickerbocker Trust Company suspended operations in 1907 was the Panic of 1907.
Knickerbocker Trust, then one of New York’s largest trust companies, suspended operations on October 22, 1907, after a failed attempt to corner shares of the United Copper Company undermined confidence. Depositors rushed to withdraw funds from other trusts and banks.
Financier J. P. Morgan organized private support to stabilize institutions and the wider banking system. The episode demonstrated that the United States lacked a central bank able to act as a lender of last resort. The crisis helped create political support for the Federal Reserve System, established in 1913.
The panic was not simply a stock-exchange crash. It combined speculation, bank runs, and a credit contraction. The Knickerbocker suspension became the most famous early trigger, while Morgan’s intervention became a defining example of private crisis management.