Business history is a vital resource for success. It allows people to understand the past in order to adapt for the future. October 17th, 1907 marked a big event that contributed to history. The panic of 1907, which today is more commonly known as the Knickerbocker Crisis or the 1907 Banker Crisis, occurred on this day. The Panic of 1907 marked a day of financial crisis and chaos. It happened in consequence of many reasons concerning the market and it had a major impact on the United States economy. The Panic of 1907 was a fiscal crisis in which the New York Stock Exchange fell drastically. It started in the middle of October and lasted about three to six weeks. During that time, there was no federal deposit insurance and therefore it resulted …show more content…
It was specifically triggered by the failure to corner the copper market, or gain control of a majority of the stocks in this market, by the United Copper Company. This involved F. Augustus Heinze, the owner of United Copper, his brother Otto, Charles W. Morse, a prominent banker, and Charles T. Barney, the president of the Knickerbocker trust company. “Financial men were disposed to believe that the accommodation furnished by him, directly and indirectly, to Charles W. Morse, was responsible for this withdrawal from the Knickerbocker Trust Company,” also according to The New York Times. The collapse of the Knickerbocker Trust Company implemented fear in city's trusts as regional banks withdrew reserves from banks in New York City. People from across the nation at the same time then withdrew money from their regional banks causing complete chaos. The economy was already weak before the crises. The stock market was also weak and many securities firms and banks were having trouble with liquidity problems. Another factor that caused this panic was that “trust companies handling wills and estates -- firms long synonymous with safe investment -- exploited legal loopholes and became wild speculators in the stock market. When those investments soured, the collapse of the trusts threatened the financial system.” Speculating is an extreme measure of the market and it almost collapsed because of it. Depositing became a risky transaction and therefore caused panic and improper judgment of