The Panic of 1907

"e;Before reading The Panic of 1907, the year 1907 seemed like a long time ago and a different world. The authors, however, bring this story alive in a fast-moving book, and the reader sees how events of that time are very relevant for today's financial world. In spite of all of our advances, including a stronger monetary system and modern tools for managing risk, Bruner and Carr help us understand that we are not immune to a future crisis."e; Dwight B. Crane, Baker Foundation Professor, Harvard Business School "e;Bruner and Carr provide a thorough, masterly, and highly readable account of the 1907 crisis and its management by the great private banker J. P. Morgan. Congress heeded the lessons of 1907, launching the Federal Reserve System in 1913 to prevent banking panics and foster financial stability. We still have financial problems. But because of 1907 and Morgan, a century later we have a respected central bank as well as greater confidence in our money and our banks than our great-grandparents had in theirs."e; Richard Sylla, Henry Kaufman Professor of the History of Financial Institutions and Markets, and Professor of Economics, Stern School of Business, New York University "e;A fascinating portrayal of the events and personalities of the crisis and panic of 1907. Lessons learned and parallels to the present have great relevance. Crises and panics are as much a part of our future as our past."e; John Strangfeld, Vice Chairman, Prudential Financial "e;Who would have thought that a hundred years after the Panic of 1907 so much remained to be written about it? Bruner and Carr break significant new ground because they are willing to do the heavy lifting of combing through massive archival material to identify and weave together important facts. Their book will be of interest not only to banking theorists and financial historians, but also to business school and economics students, for its rare ability to teach so clearly why and how a panic unfolds."e; Charles Calomiris, Henry Kaufman Professor of Financial Institutions, Columbia University, Graduate School of Business

"Before reading The Panic of 1907, the year 1907 seemed likea long time ago and a different world. The authors, however, bringthis story alive in a fast-moving book, and the reader sees howevents of that time are very relevant for today's financial world.In spite of all of our advances, including a stronger monetarysystem and modern tools for managing risk, Bruner and Carr help usunderstand that we are not immune to a future crisis."Dwight B. Crane, Baker Foundation Professor, HarvardBusiness School"Bruner and Carr provide a thorough, masterly, and highlyreadable account of the 1907 crisis and its management by the greatprivate banker J. P. Morgan. Congress heeded the lessons of 1907launching the Federal Reserve System in 1913 to prevent bankingpanics and foster financial stability. We still have financialproblems. But because of 1907 and Morgan, a century later we have arespected central bank as well as greater confidence in our moneyand our banks than our great-grandparents had in theirs."Richard Sylla, Henry Kaufman Professor of the History ofFinancial Institutions and Markets, and Professor of EconomicsStern School of Business, New York University"A fascinating portrayal of the events and personalities of thecrisis and panic of 1907. Lessons learned and parallels to thepresent have great relevance. Crises and panics are as much a partof our future as our past."John Strangfeld, Vice Chairman, Prudential Financial"Who would have thought that a hundred years after the Panic of1907 so much remained to be written about it? Bruner and Carr breaksignificant new ground because they are willing to do the heavylifting of combing through massive archival material to identifyand weave together important facts. Their book will be of interestnot only to banking theorists and financial historians, but also tobusiness school and economics students, for its rare ability toteach so clearly why and how a panic unfolds."Charles Calomiris, Henry Kaufman Professor of FinancialInstitutions, Columbia University, Graduate School of Business

Foreword: Within a Fraction of Disaster viiAcknowledgments xiiiPrologue xvIntroduction 1Chapter 1 Wall Street Oligarchs 7Chapter 2 A Shock to the System 13Chapter 3 The "Silent" Crash 19Chapter 4 Credit Anorexia 29Chapter 5 Copper King 37Chapter 6 The Corner and the Squeeze 43Chapter 7 Falling Dominoes 51Chapter 8 Clearing House 57Chapter 9 Knickerbocker 65Chapter 10 A Vote of No Confidence 71Chapter 11 A Classic Run 77Chapter 12 Such Assistance as May Be Necessary 83Chapter 13 Trust Company of America 89Chapter 14 Crisis on the Exchange 97Chapter 15 A City in Trouble 105Chapter 16 A Delirium of Excitement 115Chapter 17 Modern Medici 121Chapter 18 Instant and Far-Reaching Relief 127Chapter 19 Turning the Corner 135Chapter 20 Ripple Effects 141Lessons Financial Crises as a Perfect Storm 151Reflections on the Centennial: The Subprime Crisis Commencing in 2007 173Appendix A: Key Figures after the Panic 189Appendix B: Definitions 199References 205Notes 217About the Authors 253Index 255