J. P. Morgan helped calm the 1907 Panic by organizing a private rescue of troubled banks.
During the panic, depositors rushed to withdraw money from banks and trust companies, while the Knickerbocker Trust Company’s failure intensified fear in New York. The United States had no central bank capable of acting as a formal lender of last resort, so private coordination became unusually important.
Morgan gathered bankers in his library and pressed them to provide funds and guarantees. He also helped arrange support for financial institutions and worked with government officials to stabilize markets. His intervention did not instantly end the crisis, but it helped prevent a wider collapse.
The episode demonstrated the risks of relying on one private banker during a national emergency. In response to the panic, Congress created the National Monetary Commission. Its work contributed to the establishment of the Federal Reserve System in 1913.