J. P. Morgan's rescue of threatened banks is most associated with ending the Panic of 1907. Morgan convened bankers in New York, examined institutions' assets, and pressured them to provide emergency loans and clearing support.
The crisis began after a failed attempt to corner United Copper shares caused runs on Knickerbocker Trust and other trust companies. Depositors demanded cash, but the institutions held many assets that could not be sold quickly. Morgan committed his own funds and organised a coordinated private rescue when no U.S. central bank existed.
The panic convinced many policymakers that the United States needed a permanent lender of last resort. Congress created the National Monetary Commission, whose recommendations helped lead to the Federal Reserve Act of 1913. Morgan's role was crucial, but Treasury Secretary George Cortelyou and New York bankers also supplied liquidity.