Day Two; The Panic of 1907

Now that we have covered the previous central banks, lets get into the precursors of the Federal Reserve Act of 1913.

The Panic of 1907 was meticulously designed. Out of a failure to corner the market on the stocks of United Copper, the banks who funded this push and associate banks were subjected to a run on the banks.

Wikipedia states that “The panic may have deepened if not for the intervention of financier J. P. Morgan, who pledged large sums of his own money, and convinced other New York bankers to do the same, to shore up the banking system. At the time, the United States did not have a central bank to inject liquidity back into the market.”

In my own understanding, I read this quite differently, as J. P. Morgan had much to gain out of this ordeal.

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