Panic of 1907

Overview

The Panic of 1907 was a severe US financial crisis that began in October 1907, triggered by a failed attempt to corner the market in United Copper Company stock and the subsequent collapse of the Knickerbocker Trust Company, then New York's third-largest trust.[1] With no central bank to act as lender of last resort, the response fell to private financier J.P. Morgan, who convened the country's leading bankers at his private library, examined their books, and personally pressured them into pledging the funds needed to stem the panic.[1][2]

The episode's dependence on the ad hoc judgment of one powerful private individual exposed the fragility of a monetary system with no institutional lender of last resort, and directly spurred the reform movement that produced the Federal Reserve Act, signed into law in December 1913, with the twelve regional Federal Reserve Banks opening the following year.[2]

In the Land-Cycle Literature

Georgist writers on the roughly 18-year land-and-credit cycle treat 1907 as one of the historical peak years in the recurring boom-bust sequence. Akhil Patel's The Secret Wealth Advantage lists 1907 among the documented US real-estate cycle peaks (alongside 1888, 1926, 1973, 1990, and 2008), a dating broadly consistent with other cycle researchers.[3] On this reading, the panic is read as the credit-and-banking-crisis face of a land-price peak rather than a purely monetary accident — though the wiki notes this periodicity claim is contested (see cycles are driven by credit, not land).

See Also

• The 18-Year Land Cycle — the cycle framework in which 1907 is treated as a peak year
• Boom-Bust Cycle — the general concept
• Patel, The Secret Wealth Advantage (book) — the source dating 1907 as a documented cycle peak
• The 2008 Financial Crisis — a later node in the same cycle sequence, resolved by a central bank rather than a private banker

Sources

1. "Panic of 1907," Wikipedia — used for the triggering United Copper stock-corner attempt, the Knickerbocker Trust collapse, and the basic chronology. Wikipedia
2. "The Panic of 1907," Federal Reserve History (a joint project of several Federal Reserve Banks) — used for J.P. Morgan's role organizing the private bailout and the direct causal link to the Federal Reserve Act of 1913. federalreservehistory.org
3. Akhil Patel (2023), The Secret Wealth Advantage, Appendix (pp. 336–337) — used for 1907 as a documented US real-estate cycle peak year. wiki summary