The U.S. financial panic that led J. P. Morgan to organize a private banking rescue was the Panic of 1907.
The panic began after an unsuccessful attempt to corner shares of the United Copper Company. The failure spread through trust companies and banks, causing withdrawals and a severe liquidity shortage. The Knickerbocker Trust Company collapsed in October, intensifying public fear.
J. P. Morgan assembled leading financiers in New York and used his influence and funds to stabilize institutions, arrange loans, and support threatened banks. The episode demonstrated how dependent the United States was on private coordination during a nationwide financial emergency.
The panic helped build political support for a central bank. The Federal Reserve System was created in 1913, providing a permanent institution intended to supply liquidity and reduce the chance that one private financier would have to manage a crisis alone.