J. P. Morgan helped calm the Panic of 1907 by organizing private support for banks.
The panic began after a failed attempt to corner the shares of the United Copper Company caused runs on banks connected to the speculators. Trust companies, which faced less regulation than commercial banks, became central targets of withdrawals and suspicion.
J. P. Morgan gathered bankers in New York and used his influence, money and institutional network to coordinate emergency lending and purchases of troubled assets. He also helped decide which institutions could be supported and pressed bankers and public officials to maintain liquidity.
The episode demonstrated how heavily the United States depended on private financiers because it lacked a modern central bank. Congress later created the Federal Reserve System in 1913, providing a formal lender of last resort and a new structure for supervising and stabilizing the banking system.