Which U.S. trust company’s collapse is widely associated with the start of the Panic of 1907?

The collapse of Knickerbocker Trust is widely associated with the start of the Panic of 1907.

Knickerbocker Trust Company was one of New York’s largest trust companies when it became involved in a failed stock speculation involving United Copper. After the speculation collapsed, depositors rushed to withdraw their money, and the company suspended operations on October 22, 1907.

The suspension intensified fear throughout the financial system. Depositors began questioning other trust companies and banks, creating a chain of runs and emergency borrowing. The panic later spread beyond New York and contributed to a sharp contraction in credit and economic activity.

The company’s collapse is sometimes described as the trigger rather than the sole cause. Financial markets were already vulnerable because of speculation, interconnected institutions, and the absence of a central bank able to supply emergency funds. The crisis ultimately strengthened the case for creating the Federal Reserve.