Panic of 1907
The Panic of 1907 was a New York trust-company run after a failed copper corner, stopped by a private J.P. Morgan syndicate — the crisis that created the Federal Reserve.
Definition
Trusts were less regulated than national banks and more levered into the call-money and stock-collateral complex. The Knickerbocker Trust run jumped to others. Clearing-house certificates and Morgan’s locked-room allocations were the LOLR because there was no Fed.
Why it matters
Unregulated near-banks plus a securities-credit spiral is 1907, 2008, and 2020 in different clothes. The 1913 Fed Act is the legislative scar.
Case
Call-loan rates spiked, the stock exchange nearly closed, and the Treasury deposited into New York banks. Aldrich–Vreeland emergency currency was the interim patch.
How to read it
Find the shadow bank (then: trusts). Find the collateral loop (then: stocks on call). Find who can issue emergency claims.
Key papers
Landmark references with real publisher or arXiv links — not token-overlap noise.
- The Panic of 1907Bruner, Carr · 2007 · WileyNarrative reconstruction of the trust run.