On Oct. 17, 1907, panic began to spread on Wall Street after two men tried to corner the copper market. In the months preceding the panic, the stock market was shaky at best; banks and securities firms were contending with major liquidity problems.
By mid-October, Wall Street was paralyzed; for days, there were runs on several large banks. Millions of dollars were withdrawn, and banks closed their doors. New York City was on the brink of bankruptcy. By 1908, there was a severe but short-lived recession. The man who saved the day was J.P. Morgan, who brought together leading financiers and banks to bail out the ailing market.
That was all in the days before a centralized banking system — and the Federal Reserve — were created to prevent widespread financial catastrophes.
Sean Carr, director of Corporate Innovation Programs at the Darden Graduate School of Business Administration at the University of Virginia, co-authored The Panic of 1907: Lessons Learned from the Market's Perfect Storm, with Darden Dean Robert Bruner. Carr talks with Robert Siegel.
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